Pennsylvania lawmakers are weighing rising Medicaid costs and federal pressure as they look at the state’s Human Service budget this week.

Just over 3 million Pennsylvanians are enrolled in medicaid— over 120,000 in our viewing area.

The federally mandated program gives health insurance  to low income individuals. This includes people like senior citizens, individuals with disabilities, working adults whose job does not offer health insurance, and around 1.4 million children/young adults under the age of 21.

Discussions were tense during budget hearings in the House on Tuesday and in the Senate today.

“It's a big budget. $21 billion budget request. You know, $2 billion more than we were just one year ago,” Rep. Jim Struzzi said, the Republican appropriations chair.

$2 billion would be a 10% fund increase for the department. Most of human service funds— around 79%— go towards Medicaid expenses. Last fiscal year, the appropriations for those programs went in the red. This was due to things like Inflation and a more sick medicaid population (who required more medical services, which increased spending).

Pennsylvania is spending more money than it brings in through revenue each year. Department Human Services is the largest vacuum of funds, and Republican lawmakers regularly critique the department over concerns of waste, fraud, and abuse.

“We still have to provide for those needs, though, but we also have to look again at are we delivering the most efficient products and services that we can within human services?” Struzzi said.

In today’s hearing, Secretary Val Arkoosh maintained that other factors (like inflation and demand for services) are the driving force behind increasing budgets.

“I can’t say no,” Arkoosh said, in one dialogue exchange this afternoon. “I understand where you’re coming from, but I can’t say no to serving eligible Pennsylvanians."

“Are there services or entitlements that should be repealed?” Sen. Greg Rothman said, pushing a line of question on how the department could operate if lawmakers balanced Pennsylvania’s budget. 

Conversations over state policy today were complicated by looming federal cuts.

“The proposed cuts in Congress, in the resolution passed by the House, would be the largest cuts to Medicaid in history,” Kyle Fisher said, a managing attorney at the Pennsylvania Health Law Project.

The current U.S. House resolution calls for $880 billion fund cuts to programs overseen by the Energy & Commerce Committee over the next 10 years. While there are other programs controlled by the committee that could be cut from as well, some are exceedingly popular (like social security and Medicare for seniors). Other programs are not large enough to provide substantial cuts. 

The federal government spent around $580 billion on Medicaid in 2024. If Medicaid got all the proposed cuts, spread over the next 10 years, it could roughly average a 15% decrease in federal funding each year.

State lawmakers would be left to decide how to make up the difference.

“The particular ways in which the program will be cut would fall on state politicians and policymakers. That's not going to be determined at the federal level,” Fisher said.

Medicaid expenses are split between states and the federal government. In Pennsylvania, the federal government pays for 56% of Medicaid costs. The commonwealth picks up the other 44% of the bill (this ratio is different for every state and changes year to year).

In the 2010s, to pair with the Affordable Care Act, Congress also expanded Medicaid eligibility to individuals with low incomes who work, but whose job does not offer health insurance. The federal government pays for 90% of Medicaid costs for expansion enrollees.

Federal lawmakers have proposed reversing Medicaid expansion. Other ideas have included adding work requirements to Medicaid or capping funds. 

Around 750,000 Pennsylvanians are enrolled in Medicaid right now because of those expansions. Less Medicaid funding is spent on working adults (as a population, they often seek care less and seek less expensive care).

On the other end of the spectrum, seniors and individuals with disabilities make up about 27% of the state’s Medicaid population but account for around 80% of Medicaid spending.

If the state faced 15% in federal fund losses, would lawmakers choose to limit services for seniors and people with disabilities? Or if federal funds were specifically cut for Medicaid expansion populations (working adults), would state lawmakers continue through and pull health insurance from that group?

“These type of cuts would be catastrophic… to either our ability to cover our fellow Pennsylvanians,” Rep. Arvind Venkat (D) said. “Or to the taxes of every Pennsylvanian, if we were to try and make up the difference. To the tune of billions of dollars.”

The GOP held Congress is expected to send a budget to President Donald Trump to sign before a potential government shutdown on March 14. Current drafts show Medicaid cuts will be part of the final product.

As Pennsylvania lawmakers wrestle over a $2 billion fund increase request, more hard choices loom in the horizon.

Republicans say the time has come for audits and to embrace the tight belt.

Democrats are asking constituents to call their Federal congress members.