Key Points from PA Senate Budget Hearing with Department of Human Services

HARRISBURG – Lawmakers raised numerous concerns today about the Shapiro administration’s plans to spend billions of new taxpayer dollars to expand Medicaid to cover services that do not pertain to physical or behavioral health during a hearing with the Department of Human Services (DHS).

If the proposed changes, known as an 1115 Waiver Request, are approved by the federal government in its entirety, they could increase Pennsylvania’s Medicaid costs by more than $3 billion over five years, of which $1 billion would be General Fund costs. DHS costs are already expected to increase by about $900 million per year before any of these expansions.

The changes would permit funds to be used for non-medical purposes such as moving expenses and household items like pots and pans, furniture and air conditioning units for eligible recipients, including recently released prison inmates.

Members also expressed concern that actual spending levels are much higher than what’s in the proposed DHS budget, even including temporary offsets. They also pressed for action on reducing delays in reimbursements to nursing homes and ambulance companies, and helping counties deal with backlogs in investigating suspected child abuse cases.

Full Hearing (Part 1)

Full Hearing (Part 2)

Senator Martin on the explosive growth in Medicaid spending, barriers to employment, the importance of workforce development, the shortage of juvenile detention beds, and more

Video Highlights

Secretary Valarie Arkoosh made a commitment not to implement the controversial 1115 Medicaid waiver programs without the authorization of the General Assembly. She also confirmed the maximum cost to taxpayers would be approximately $3 billion over a five-year period, about $1 billion of which would be state tax dollars. DHS also claims to envision the program as a five-year pilot and not a long-term entitlement.

The costs for the 1115 waiver programs are not included in the governor’s budget proposal. Sec. Arkoosh confirmed that the governor’s budget spends down all reserves and the Rainy Day Fund in future years. Lawmakers expressed concern that the addition of new programs could threaten to create even larger deficits in the years ahead.

Concerns were raised about the department spending money for services in other areas that were not authorized by the General Assembly.

The department was questioned about its projected costs to taxpayers in the years ahead, and whether its projections could be underselling the final price tag. The executive branch is required by the PA Constitution to present a five-year financial outlook as part of its budget.

The department’s budget includes lagged funding from the prior year for child welfare programs, which is reflected in future year projections.

Questions were raised about delays in Medicaid payments to nursing homes and how to help county Children and Youth Services agencies address backlogs of investigations. The department was encouraged to continue to explore ways to boost the effectiveness of Child Advocacy Centers.

The possibility of repurposing positions within the department to save costs and improve services was discussed.

An update was offered on DHS efforts to reduce the waiting list for services for individuals with developmental disabilities.

Sec. Arkoosh confirmed the governor has not approached the department to discuss the potential impact of the potential legalization of recreational marijuana.

The department is continuing to deal with a data breach involving a provider. Nursing homes have been experiencing payment delays resulting from the breach. An alternative claims submission system was announced today. The department’s servers were not affected by a separate data loss issue in January.

Unequal treatment of school daycare programs and licensing requirements were reported.

There are no plans to close either of the remaining centers for individuals with disabilities.

Sec. Arkoosh committed to visit a crisis pregnancy center to learn more about the services they offer to women and families.

You can find recaps and video from every Senate budget hearing at

CONTACT: Jason Thompson

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