This year the Department of Public Welfare (DPW) became Pennsylvania's largest single budget item, overtaking the perennial favorite, K - 12 education. More of Pennsylvanians' tax money (nearly 40%) is being used to fund DPW programs than to educate our children. Of the DPW budget, roughly 30% is being used for conventional assistance programs and the remaining 70% goes toward funding Medicaid.
First, regarding the conventional assistance programs. Although we have had unprecedented spending over the past several years, poverty in Pennsylvania has increased year after year since 2000. Despite the best efforts of our assistance programs, the programs themselves seem to have created a permanent underclass, wholly dependent on state assistance. Pennsylvania's assistance programs can be so generous that a single mother with two minor children would have to earn the equivalent of $62,000 in order to equal the benefits that she could receive on public assistance. This current system rewards lethargy.
Real reform must include performance-based analysis of the existing programs and greater enforcement of the eligibility standards. Unless we take action, more generations of underprivileged Pennsylvanians will miss out on their opportunity to be productive and successful, and the taxpayers will continue to bear the increasing cost of the failure of our system.
Second, regarding Medicaid. Medicaid is the government program, administered by the states, which provides medical assistance to the indigent. It is our safety-net when it comes to medical care. Medicare, on the other hand, is the medical insurance program administered through the Federal government for all American seniors, regardless of financial status. Medicaid consumes 70% of the DPW's budget, and that percentage is growing. If the Affordable Care Act (Obamacare) provisions on the expansion of Medicaid become the policy in Pennsylvania, one in four of our residents will be on this government program. This is a cost that we can not bear and it leads us far down the road to a single-payer medical insurance system.
In addition to adding significant expense to the DPW budget, an expansion of Medicaid will lead to a decrease in the availability of medical services in our community. Medicaid reimburses doctors and hospitals at a rate significantly below other insurance programs. In fact, many, if not most, providers could not survive on Medicaid reimbursement rates, it would not be adequate to cover their expenses. For this reason, hospitals will close and doctors will flee our state leaving us with few and distant options for medical care.
Aside from resisting Medicaid expansion under Obamacare, Pennsylvania must take some concrete steps in order to get Medicaid costs under control. The states of Rhode Island, Florida, South Carolina and Louisiana have negotiated with the Federal government to offer Medicaid within their respective states as a voucher program. Under these programs, Medicaid recipients use vouchers to pay for medical care charged at sustainable rates. Other measures include closing eligibility loopholes and increasing the time limits certain Medicaid recipients can continue to receive benefits under the program. We must act quickly and decisively before this program forces the state into a financial crisis.