Budget Hearing Includes Focus on Pa. Hospitals

March 04, 2025

Hospitals’ financial stability, Medicaid’s future, and maternal health are top priorities in Pennsylvania.

Dr. Val Arkoosh, secretary of the Department of Human Services, appeared before the House Appropriations Committee for a daylong hearing today about the governor’s proposed 2025–2026 spending plan. Among the key takeaways for the hospital community:

Supporting hospitals

Hospitals’ financial stability is essential to protect access to care.

Governor Shapiro’s budget proposal includes funding to stabilize rural hospitals and other hospitals in financial distress, Arkoosh said. She noted challenges for rural hospitals to maintain access to care and the need for flexible funding sources to protect care in communities.

“Our hospitals need help, they need help now, and we really need to step up and help stabilize these hospitals,” Arkoosh said.

Medicaid’s future

The future of Medicaid is front and center for state and federal lawmakers.

The U.S. House last week passed a budget resolution calling for $1.5 trillion in spending cuts—including $880 billion from the House committee that oversees Medicaid.  The vote leads to a high-profile negotiation in Congress over cuts to the program.

Arkoosh said Medicaid plays an important role to help people stay in their homes and provides access to care across the lifespan. About 23 percent of Pennsylvanians get coverage through the program. Expanding Medicaid also has led to lower uncompensated care costs, she noted.

“If anything close to some of the proposed cuts comes down, we are going to have fewer insured people, the ones that are still covered will have less benefits, and this will be catastrophic for our hospitals who are already struggling mightily,” Arkoosh said.

Lawmakers also asked about how coverage of GLP-1 drugs has contributed to Medicaid costs. Arkoosh said the products are among the largest cost-drivers in the system, and that the department is looking at how these drugs are prescribed for obesity.

Watch Dr. Val Arkoosh discuss how potential Medicaid cuts could impact hospitals and patient care.

A new plan for maternal health

Arkoosh said the state will release a strategic plan for maternal health in the next six weeks. She said the plan will include actionable steps to protect access.

During January, HAP released an action plan for hospitals and policymakers to improve maternal health quality, access, and equity.

Arkoosh said loan repayment programs can help support the maternal health workforce, especially in rural settings. Low numbers of deliveries, decreasing birth rates, and the costs to maintain around-the-clock labor and delivery service contribute to maternal care deserts.

“We have to appreciate the providers who are doing this very, very difficult work,” she said.

Growing the crisis response system

The state is continuing to build out the crisis response system, Arkoosh said. Pennsylvania has grown its 988 system to support people in crisis, and every county in the state has some form of mobile response. These systems help people get directed to the support they need while reducing the number of emergency department visits.

“We want to make sure that there is someone to call, someone to respond, and someplace to go,” Arkoosh said.

What’s next for SNAP?

Federal changes to the Supplemental Nutrition Assistance Program (SNAP) would make a big impact in Pennsylvania, Arkoosh said.

More than 2 million people receive benefits through the program. The federal government provides $367 million in monthly federal funding for recipients to purchase food, Arkoosh said. About $200 million in administrative costs are covered at the state level. She said related costs to Medicaid program also go up when patients lose access to SNAP.

“The loss to Pennsylvania would be enormous if that program is ended,” she said. 

The morning and afternoon hearings are available to review online.

HAP will continue put hospital priorities front and center throughout the state budget process. See our advocacy toolkit highlighting the next steps in the state budget process.