ALLENTOWN, Pa. — Lehigh County is not prepared to deal with possible cuts to Medicaid reimbursement rates, according to a new report from the county controller’s office.
The at-times breathless paper, released Wednesday, raises the specter of tax hikes and cuts to services if officials make cuts to the programs.
Lehigh County expects to get tens of millions of dollars each year from Medicaid.
“Medicaid isn’t a line item in Lehigh County’s budget — it’s the spine."Lehigh County controller's report
Most of that money — more than $100 million in 2024, per the report — went on to pay for mental health and addiction treatment covered through the HealthChoices program.
County fiscal planners expect a further $67 million in 2025 to pay for care at its Cedarbrook nursing home.
“Medicaid isn’t a line item in Lehigh County’s budget — it’s the spine," the report reads.
"It holds up nursing homes, props up disability services, and keeps people with serious mental illness from falling through the cracks.
“This paper is a warning; it isn’t a fire alarm. It would be the sound of ice cracking underfoot —subtle, irregular and easy to ignore until you fall through.
"No one knows precisely where or when the break might come.”
Tax inreases, service cuts
The report does not evaluate the Medicaid cuts, which a U.S. House committee marked up this week — or any specific policy proposal currently being floated.
Instead, it considers a 10% cut to Medicaid reimbursement rates for care at Cedarbrook and mental health treatment covered through the HealthChoices program.
Such a reduction would leave Lehigh County taxpayers to cover a $7 million shortfall at Cedarbrook, the controller’s office estimates. A further $10 million of HealthChoices funding would disappear.
Covering the combined shortfall, plus an existing $4 million budget deficit unrelated to Medicaid spending the county booked in 2024, would require a nearly 18% tax increase, according to the report.
Alternatively, officials would need to cut spending on services instead.
The report also raised the possibility that county officials could try to fill the gap between slashed Medicaid reimbursements and the county’s costs by suing the families of patients under Pennsylvania’s Filial Responsibility Act.
House Republicans’ most recent proposal to cut Medicaid spending would not change how much the program pays providers.
Instead, it aims to require participants to work and prove their citizenship to receive care.
As a result, about 10.3 million people would lose coverage through the program by 2034, and 7.6 million would go without any health insurance, according to preliminary estimates from the Congressional Budget Office.
