Unbiased Analysis of Today's Healthcare Issues

Pennsylvania works the system

Written By: Jason Shafrin - Mar• 14•08

Michael Cannon reports (“Pennsylvania Proposes to Defraud Non-Pennsylvanians“) that Pennsylvania is manipulating the Medicaid system.  Pennsylvania is increasing Medicaid payments to hospitals (thus increasing the amount of federal matching funds) with one hand, but with the other is creating a tax on “profits of general hospitals in two counties, Allegheny [Pittsburgh] and Philadelphia.”

Thus, the hospitals will be left with the same profit level–higher Medicaid payments will be eaten away by the special tax levy–however, Pennsylvania will have to pay a lower percentage of the cost because of the additional matching funds.  Who is hurt?  Only the taxpayers in those other 49 states.

Mr. Cannon analyzes the situation more acerbically: “…the federal Medicaid program allows Pennsylvania to siphon money away from other states.  That sound you hear is your pocket being picked.”

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