In his budget message Tuesday, Gov. Tom Corbett said he rejected the expansion of the Medicaid program under the federal Affordable Care Act.
Detractors criticized the move, saying it denies the state's health care sector needed funds, since it would reject federal funding that would come with the expansion.
Medicaid is the joint federal-state insurance program for the poor. The Medicaid expansion exposed a divide in the health care deliver system: Hospitals and doctors are generally supportive of insuring more people while operators of nursing homes who are under-reimbursed by Medicaid for care they deliver are skeptical of expansion of the program that fails to cover their costs.
Corbett has held that the state should avoid expanding entitlements unless it can afford them going forward into the future.
Soon after the budget was released, Corbett sent a letter to Kathleen Sebelius, secretary of Health & Human Services calling for reforms of the program, saying the high cost precludes the state from expanding the program as required unless the state has more flexibility administering the program.
Under the Medicaid expansion, states will receive 100 percent federal funding for the first three years, phasing down to no less than 90 percent federal funding in subsequent years, according to a U.S. Department of Health & Human Services website.
Geisinger Health System spokeswoman Wendy K. Wilson said the hospital system supports expanded coverage and access to health service regardless of ability to pay. The uninsured often put off preventative care, possibly aggravating their condition until it become an emergency that is more expensive to treat.
"We already absorb the cost of charity care for patients who don't have public insurance and the hospital is not reimbursed for that," she said. "Insuring some of those people allows them to take advantage of preventative care."
Michael Kelly, of Senior Health Care Solutions, operator of four skilled nursing facility and seven assisted living center, said Corbett is trying to buy time to assess the complete fiscal impact the Medicaid expansion.
Kelly is not bullish on expanding Medicaid access. He said Medicaid reimbursement does not cover the cost of providing the care. Nursing homes would make up the loss by securing cash or private insurance clients. Even Medicare reimbursements have been cut.