Expanding Medicaid likely would help Irma Garcia. The 25-year-old Allentown resident is single and works part time as a nursing assistant for a local hospice. As a part-timer, she isn't offered health insurance and she doesn't qualify for Medicaid under the current stringent income rules.
So when she developed an eye problem last month, she did what hundreds of thousands of uninsured Pennsylvanians do every year — she went to the emergency room. The first treatment didn't work, so Garcia went to another hospital. By the time it was over, she had racked up $3,500 in bills that she can't afford to pay.
It's not her only hospital bill this year. Garcia suffers from depression and because she couldn't afford medication, her condition worsened and she landed in Sacred Heart Hospital's behavioral health unit. She is awaiting that bill.
Corbett, Garcia said, is holding out on the Medicaid expansion because he doesn't know what it's like to be working without health coverage. "If he was in our shoes, I think he would feel differently," she said. "He doesn't know what it's like to work really, really hard and then have nothing."
To qualify for Medicaid, an individual has to have a temporary disability and earn no more than $11,490 a year. A qualifying family of three cannot earn more than $19,530 a year.
If Medicaid is expanded, all single adults under age 65 who earn up $15,857 and three-person households with incomes up to $26,344 would qualify. Those not qualifying will have to shop for private insurance on the exchange. Some will qualify for subsidies to help them pay the premiums.
Obamacare was intended to slow the rising cost of U.S. health care, the most expensive in the world. One of the ways to meet that objective is to reduce Medicare payments to hospitals. Those payments were supposed to be offset by expanding Medicaid, which would reduce the amount of free care hospitals provide.
But the U.S. Supreme Court ruled that the federal government could not force states to expand Medicaid. The ruling turned the mandate into an option.
In its latest report, the Henry J. Kaiser Family Foundation, a California nonprofit that studies health-care reform, said 23 states, including Washington, D.C., were moving forward with Medicaid expansion, 20 have opted not to expand it and eight, including Pennsylvania, were still considering it.
Hospitals in states that do not accept expansion will face a double hit: lower Medicare reimbursements and less revenue from Medicaid.
"No expansion means that hospitals will continue to absorb $1 billion-plus annually in uncompensated care costs," said Roger Baumgarten, director of media relations for the Hospital & Healthsystem Association of Pennsylvania.
Locally, those costs continue to rise at big and small providers. Lehigh Valley Health Network hospitals in 2010 spent $14 million on charity care alone. Last year, that figure rose to $24 million. At Easton Hospital, uncompensated care, including charity care and unpaid patient bills, reached $17 million last year.
Meanwhile, expansion would bring Sacred Heart an estimated $1 million-$2 million in additional revenue, said President and CEO John Nespoli.
There's another cost to businesses in states that don't expand Medicaid.
According to an analysis by Jackson Hewitt Tax Service, businesses in those states will pay higher taxes because under Obamacare, employees who qualify would get a tax credit to help them subsidize private insurance premiums. Employers with 50 or more full-time workers would have to pay a tax that the government would use to help cover those subsidies.
Employers in Pennsylvania could have to pay between $56.6 million-$85 million a year in additional charges to cover employees who would have qualified for expanded Medicaid, it said.
A political battle
In a Feb. 5 budget address and the letter to Sebelius, Corbett said Medicaid already was busting the budget and was expected to cost the state an additional $400 million in the coming year. In the letter, he said Medicaid was broken, and that for expansion to work, the federal government had to grant states the ability to mange their Medicaid offerings on an individual basis and to make sure enrollees have jobs.
"To ensure a path to independence, there also must be appropriate incentives for participants to seek and retain employment," the letter stated.
Democratic Sen. Vince Hughes of Philadelphia, who favors expansion, said Corbett should be focused on Pennsylvania's needs, not how the federal government operates. Expansion would cover low-income adults who already have jobs, Hughes said, so he does not know why Corbett would mention employment in his letter.