January 15, 2017

Senator Patrick J. Toomey

248 Russell
Washington, DC 20510
Senator Toomey:
As you consider repealing and replacing the Affordable Care Act, we want to supply you with
some Pennsylvania-specific information, detailing the exaggerated benefits and underestimated
costs associated with Obamacare. In addition, we want to share how Congress can make health
care truly affordable and accessible in Pennsylvania.
The cost of insurance premiums has, as predicted, increased dramatically, taking a greater toll
on working families.
This year, Pennsylvanians buying insurance on the individual market saw a massive 32.5
percent (on average) increase in insurance premiums. This follows an 11 percent increase for
2016 and more than 10 percent for 2015. At the same time, average deductibles for gold, silver,
and bronze plans rose by $254, or 17 percent, in Pennsylvania for 2016.
For a 27-year old male in the Philadelphia market, the lowest-priced monthly premiums have
grown by an astronomical 396 percent since 2013! For that same demographic in the Pittsburgh
area, 2017 premiums are 227 percent higher.
The Affordable Care Act has been anything but affordable for Pennsylvanians.
The ACA has also undermined competition in the insurance market. On average,
Pennsylvanians using the exchange have only three insurance providers to choose fromwith
only two serving the Pittsburgh area, and only one option in Philadelphia. In 2013, 14 carriers
offered individual health plans to Pennsylvanians on the Obamacare exchange.
The support for maintaining the ACA stems from the idea that the taxpayer subsidies, individual
and employer mandate, and (primarily) expansion of Medicaid eligibility provides health
insurance to those who would otherwise be uninsured. Yet these claims are highly misleading.
Recent messages from Gov. Wolf and other sources provide inaccurate estimates of the number
of people enrolled in health insurance programs due to the Affordable Care Act. According to
U.S. Census data, the number of uninsured in Pennsylvania did decline from 2010 to 2015, but
by 469,000 residentsfar fewer than some of the numbers being thrown around.
The uninsured rate also declined from 10.2 percent to 6.3 percent. Yet some of this decline can
be attributed to the improvement in economic conditions and increased employment following
the recession. Indeed, the uninsured rate was 7.7 percent in 1999.
Gov. Wolf likewise overestimates the number of individuals enrolled in Medicaid expansion.
According to state data, Medicaid enrollment in total has increased by 550,000 since December
2014, far fewer than the 690,000 the governor claims.

This embellishment is partly because the state shifted 73,000 individuals already enrolled in
Medicaid over to the expansion Medicaid. This was done entirely as an accounting gimmick to
benefit from the 100 percent federal reimbursement rategetting federal tax dollars to pay for
individuals already enrolled in Medicaid.
Moreover, there is no evidence these new enrollees were uninsured prior to Obamacare. In
response to a Right-toKnow request, the Department of Human Services admits they do not
track prior insurance status. It is completely inaccurate to suggest all new enrollees had no
health insurance before Obamacare, and misleading to say they would not have or could not
obtain health insurance should the law change.
The Census data actually indicates many Medicaid enrollees left private insurance to enroll in
Medicaid. This is particularly problematic given Medicaid is a poor provider of health care.
Medicaid recipients experience more difficulty finding doctors and longer wait times than those
with private insurancethanks to low provider reimbursement and a maze of red tape. Worse,
Obamacare's perverse incentives make the neediest Medicaid patients (children, pregnant
women, the blind, and the disabled) most vulnerable to benefit cuts.
The Affordable Care Act may have resulted in more individuals getting an insurance card, but it
has done little to improve the quality or affordability of health care.
If there is one thing Pennsylvania needs in a replacement plan, it is flexibility to revamp our
Medicaid program at the state levelnot just for the expansion population, but for all Medicaid
recipients.
Almost half of the Pennsylvania state operating budget (49 percent) is spent on Human Services,
with the bulk of that$26.33 billionon Medical Assistance and Long Term Living (i.e.,
Medicaid programs). Medicaid alone consumes more of the state budget than PreK-12
education, higher education, transportation and debt service combined.
According to the Independent Fiscal Office, Medical Assistance and Long Term Living costs are
projected to rise by another $844 million next year, from the state general fund alone. Some
$200 million of this is the result of the Medicaid expansion reimbursement rate, and other cost
increases tied to federal mandates and restrictions on making program changes.
Human Services costs are expected to increase by more than 5 percent every year, while state
revenue growth is projected at around 2 percent per year. Without flexibility to reform these
programs, the commonwealth will have to either raise state taxes or make significant cuts to
other areas, such as education or corrections.
Block granting federal Medicaid dollars to the states or granting states Medicaid waivers would
allow Pennsylvania the Medicaid flexibility it needs to improve the quality of care and control
costs, ensuring the health care safety net is sustainable for all families.
We thank you for the consideration of these issues.
Sincerely,

Nathan Benefield
VP & COO

Elizabeth Stelle
Director of Policy Analysis