Commonwealth of Pennsylvania Department of Public Welfare Budget Briefing February 2010

1. Commonwealth of PennsylvaniaDepartment of Public WelfareBudget BriefingFebruary 2010

2. The recession continues pressure on revenues and state budgets Year-Over-Year Percent Change in State Tax Collections: Nationwide Four-Quarter Moving Average

3. The Economic Multiplier Effect: • Every dollar of Medical Assistance healthcare spending generates $2.77 dollars in economic activity across Pennsylvania • For every dollar Pennsylvania invests in early childhood programs, more than two dollars is circulated throughout our local economies Creating and Sustaining Jobs: • Medical Assistance spending for FY10-11 will support an estimated 218,000 Pennsylvania jobs Return on Investment: • Every $1 spent on substance abuse treatment saves $4 in reduced future health care costs and $7 in reduced future criminal justice costs In tight times, DPW’s investments generate jobs and immediate economic rewards

4. State investments leverage $12.2 billion in federal dollars

5. More Pennsylvanians Need Help2.1 million children and adults rely on Medical Assistance for health care 2.1 million (Jan 2010)

6. TANF Cash Assistance Increases as the Recession Hits PA 267,682 (Oct 2005) 217,820 (Dec 2009) 197,027 (Mar 2009)

7. Original sunset: 12/31/10 • Now: Expect states will receive enhanced FMAP through FY10-11 • Worth $5.3 billion total – up from $4 billion • Federal dollars will help us avoid most – but not all – painful cuts in this budget Short term extension of enhanced FMAP will help Pennsylvania meet rising needs Additional FMAP (billions)

8. The Economy – if the recovery is slower than expected, revenues will be below target • MCO Pharmacy Rebates – if Congress fails to act, we will have less pharmacy savings • Enhanced FMAP – if the Congress fails to extend the enhanced match for Medical Assistance, the budget will not balance Risks to the Budget

9. Support sustainability—preserve services for those who need them Improve quality and results—ensure services improve the lives of those who receive them Ensure accountability—ensure efficient use of tax dollars DPW Guiding Principles

10. Budget Overview $388 million increase in state dollars 4.9% increase from 2009-2010 FY10-11 Budget: Control Growth and Assure Sustainability, Quality, Results and Accountability

11. $363 M Safety net services and increases required by federal law +$385 M Federal and other revenue replacement $748 M Additional State Dollars Needed Constructing a Budget that WorksStep 1: The Budget Drivers Step 2: Cost Containment • $748 M Budget Drivers • -$360 M Cost Containment and Adjustments • $388 MTotal Growth

12. Ensuring efficient use of tax dollars DPW has reduced staff and personnel each year since 2003 Total Savings: $230 million in salary and benefits savings since 2003

13. Over $825 million cost savings in last year Ensuring efficient use of tax dollars

14. MA enrollment is expected to grow 3% In child welfare, the number of children needing out-of-home placement will continue to decline, allowing more children to be served in their homes 150 new individuals will be able to access MR community services to avoid institutionalization More children will be able to participate in early learning programs, and more individuals will be able to access needed mental health and substance abuse services The FY10-11 budget prepares PA to meet rising demand

15. Arizona is repealing Medicaid coverage for childless adults and adults with serious mental illness, and eliminating portions of its cash assistance and preschool programs Texas has cut the number of children receiving child care subsidy California has cut nearly all funding for services supporting HIV/AIDS patients, and it completely eliminated funding for domestic violence shelters and maternal, child, and adolescent health programs Preserving services for those who need them Many states have been forced to make cuts

16. With each budget the Commonwealth has remained committed to maintaining the health care and human services safety net That sustained investment in access, quality and accountability has yielded impressive results since 2003 The FY10-11 Budget funds the continuation of these critical initiatives The Continuing Commonwealth Commitment

17. Improving quality and results

18. Improving quality and results

23. The Budget is online at www.dpw.state.pa.us Educate yourself and others about the needs of Pennsylvania, the impact of the programs, and the impact of the budget Next Steps