What Medicaid Cuts Could Mean for Health Care Coverage in Pa.

March 05, 2025

Pennsylvania is among the states at the highest risk for health care coverage losses if Medicaid cuts are enacted, according to a recent analysis from the Urban Institute and the Robert Wood Johnson Foundation.

Federal funding to states through the enhanced Federal Medical Assistance Percentage (FMAP) has played a critical role increasing health care coverage in states—including Pennsylvania—that have enacted Medicaid expansion. Eliminating that funding for the Medicaid expansion population—one of the potential options Congress may consider as it looks to cut $1.5 trillion in spending as part of budget reconciliation—could result in nearly 11 million people nationwide losing coverage if state governments do not make up the $44.3 billion funding gap, the analysis found.

Here's are four key takeaways:

• Coverage losses:  About 626,000 Pennsylvanians would lose coverage (a nearly 97 percent increase) if enhanced FMAP is eliminated and state funding does not make up the difference, the analysis found.
• Pennsylvania at risk:  The commonwealth ranked fifth among all Medicaid expansion states for projected increase in people without coverage.
• State funding needed:  Pennsylvania would need to increase Medicaid spending by 23.2 percent to maintain coverage without enhanced FMAP.
• Quotable:  “While eliminating the enhanced FMAP for the Medicaid expansion population would reduce federal spending, it would shift those costs to the states, which would have to cover the shortfall by cutting Medicaid enrollment, provider payment rates or optional benefits, or by raising taxes or cutting non-Medicaid spending,” the report noted.

During a state budget hearing today, Dr. Val Arkoosh, secretary of the Department of Human Services, emphasized the importance of Medicaid to protect health care coverage for millions of Pennsylvanians and to ensure hospitals have the stability to provide access to care for their communities.

“We would be stuck making some very hard choices,” Arkoosh said if the FMAP is decreased.

HAP and Pennsylvania hospitals are advocating with the state’s congressional delegation to protect Medicaid and its vital role supporting access to care. See HAP’s infographic highlighting the critical importance of Medicaid to Pennsylvania and letter to the state’s congressional delegation online.

The analysis is available online.