The state’s budget shortfall has the potential to have a huge impact on health care spending during the 2010-11 fiscal year.
The latest tax revenues from April were about $390 million less than expected, meaning the fiscal year-end deficit will likely be above $1.3 billion. With most lawmakers facing reelection this year, it is unlikely that the General Assembly will consider a significant tax increase to fill the gap.
With the state in a hole of this magnitude, spending cuts are likely to be the order of the day.
Spending for agencies involved in health care regulation like the Department of Public Welfare, Department of Health, Department of Insurance, Pennsylvania Patient Safety Authority, and Pennsylvania Health Care Cost Containment Council (PHC4) could be in jeopardy next year. The Department of Public Welfare accounts for about 40 percent of the state’s General Fund budget.
Although increases are not likely, the Pennsylvania Medical Society (PAMED) would like to see funding maintained, if not increased, for many health-related programs and initiatives. They include:
- Medicaid
- Health information exchange
- Broadband expansion
- PHC4
- Public health programs, like chronic disease education and prevention and tobacco cessation
- Financial assistance and scholarships for medical students
- Incentives to practice in underserved areas
- Medical schools
- Research
In addition, PAMED would oppose increases in taxes for small businesses like physician practices, and support a tax on smokeless tobacco.
Following the primary election, legislators will return to Harrisburg on May 24 to begin work in earnest on the 2010-11 budget, which is due by June 30.
The Democrat-controlled House has already passed a proposed budget, but it was based on a much lower estimated deficit. House Republicans voted against the measure, and the Republican-controlled Senate has not acted on the proposal.
Reluctant to add to the growing budget deficit, legislators also haven’t moved much health care legislation in the past few months. That trend is likely to continue into the next fiscal year.