HARRISBURG — In a budget hearing Tuesday for Pennsylvania’s Department of Human Services, more than $2 trillion in potential cuts in federal spending on public benefits captured the attention of state lawmakers and department administration.
The U.S. House adopted a budget resolution on Feb. 25, now under consideration at the U.S. Senate, that recommends cuts by committee within the lower chamber including $880 billion from the Energy and Commerce Committee which oversees Medicaid and other health initiatives and $230 billion from the Agriculture Committee where the Supplemental Nutrition Assistance Program (SNAP) and farm subsidies are overseen.
Nearly $6 in $10 within Pennsylvania’s DHS budget comes from the federal government. Pennsylvania’s population tops 13 million. More than 2 million benefit from SNAP and more than 3 million people, including 1.3 million minors and 312,000 senior citizens, benefit from Medicaid.
“Suffice to say, if anything close to some of the proposed cuts comes down we’re going to have fewer insured people, the ones who are still covered will have less benefits and it will be catastrophic for our hospitals which are already struggling,” Human Services Secretary Dr. Valerie Arkoosh said during her testimony Tuesday in the state House.
Gov. Josh Shapiro’s general fund budget proposal for 2025-26 is estimated at $51.5 billion. An estimated $21.2 billion in state funding, a 10.2% proposed increase, no departmental spend is greater than what’s proposed for DHS.
The department’s total budget request is $63 billion, which includes $37.1 billion in federal dollars, a 7.4% increase.
Rep. Kyle Mullins, D-Lackawanna, asked about potential cuts to SNAP at the federal level.
Arkoosh said more than 10,000 grocers and related businesses participate in the program, many being small independent businesses. Farmers benefit, too, from volume purchasing through the program. She said for every meal the private charitable food network provides, SNAP provides nine.
“The loss to Pennsylvania would be enormous if that program is ended. There would be no way we could make up that funding with state dollars, nor could the charitable food network,” Arkoosh said.
Rep. Marla Brown, R-Lawrence, said nearly 30% of constituents in her district are on Medicaid. She asked about reimbursement for direct care workers for in-home care of the elderly and disabled.
Shapiro is proposing a $21 million spend to boost wages for those serving clients who hire them on their own through the state’s Community HealthChoices program. Arkoosh said budget is “tight” and there are needs in other areas but that the administration saw fit to support direct care.
Rep. La’Tasha Mayes, D-Allegheny, asked about potential Medicaid cuts and reiterated how many rely on the benefit in Pennsylvania, including 750,000 additional beneficiaries when the program was expanded in 2015 under the Affordable Care Act.
“Do you think it will result in more people being uninsured?” Mayes asked.
“Yes is my simple answer,” Arkoosh said before opining on the Energy and Commerce Committee’s task to cut $880 billion across 10 years under the terms of the House budget reconciliation proposal.
“Pretty much the only way to do that is to cut most if not all of that from Medicaid,” Arkoosh said, cautioning that the plan must still be negotiated in the U.S. Senate.
Rep. Thomas Kutz, R-Cumberland, noted that DHS is also requesting an additional $251 million in supplementary funding to cover spending in the current year’s budget, to which Arkoosh said “unusual increases” in Medicaid expenses necessitated the request.
Kutz asked about out-year projections for DHS in which the Shapiro Administration projects annual spending increases at 1.5%. However, he said the department has shown 5% growth in spending in years past. He called the projection a disconnect from the department’s past performance.
“I’m concerned that as we’re seeing the highest record deficit that we’ve ever seen under the governor’s proposal, that he’s actually going to be shorting your department on the growth we’ll actually see in those years,” Kutz said.
Arkoosh said the increase in Medicaid spending is due in large part to coverage of GLP-1 class of pharmaceuticals which includes the drug Ozempic, used to treat diabetics, but now exploding in popularity for weight loss.
“It’s a medication that’s gotten a lot of hype and a lot of press and has become very popular in its use, and it is wildly expensive,” she said.
According to Shapiro’s Executive Budget proposal, GLP-1s are responsible for nearly $1 billion in Medicaid spending. The administration is working to limit such coverage for weight loss by proposing new rules for more robust prior authorization.