Residents buying health benefits on Pennsylvania’s insurance marketplace pay twice as much now for worse coverage, and it’s a problem the state expects will get worse.

Since federal Medicaid expansion expired in October, more than 104,000 Pennsylvanians dropped coverage, including 20,000 over the last month alone, according to Devon Trolley, who oversees the commonwealth’s insurance market called Pennie.

“Having more uninsured in Pennsylvania is a lose-lose for everyone,” she told the House Appropriations Committee on Wednesday. “While the federal government saves money now, the long-term costs of the uninsured beg the question of whether or not we are all ultimately paying more.”

The Pennsylvania Insurance Department says taxpayers, even those with private health insurance, are indeed paying more. Providers likewise turn into “bill chasers,” while services suffer, medical debt for uncompensated care grows and rates rise for everyone.

“Those that think they can forgo insurance are generally the first that pull out of having insurance coverage,” said Insurance Commissioner Michael Humphreys. “So the remaining pool tends to be less healthy than those that were in the pool prior.”

He said that means insurance providers raise rates in anticipation of paying out more expensive claims for sicker people, impacting “the entirety of the health care system.”

Medical debt and charity care have long burdened hospitals and other providers who are bound to treat everyone, even those with no ability to repay. In May, the House approved legislation that would make medical bills easier to understand throughout the intake and discharge process.

Efforts to erase some of the $1.8 billion medical debt impacting Pennsylvania have been unsuccessful. The administration said the unpaid bills impact 13% of the state, with a disproportionate burden on vulnerable communities.

For hospitals to remain viable, many are forced to cover the financial gap left by uncompensated care by cutting costs and increasing revenue from paying patients, insurance companies and government programs. This ultimately results in higher costs being passed down to taxpayers, patients and insurance providers.

Eligible hospitals are able to report uncompensated care for reimbursement through the state’s Hospital Uncompensated Care Program. Participating hospitals must open their doors to anyone and offer charity care to remain compliant with the program.

Increased immigration also strains the system, as The Center Square previously reported.

In 2024, House Bill 2591 would have required the reporting of costs associated with health care provided to undocumented migrants, similar to recently taken in Florida and Texas.

Earlier that same year, Florida Gov. Ron DeSantis signed a law requiring hospitals accepting Medicaid to report patient citizenship status. From June to December 2023, care for undocumented immigrants cost more than $566 million. Similarly, Texas Gov. Greg Abbott issued an order for state agencies to track health care costs for undocumented immigrants and seek federal reimbursement.

The Pennsylvania Health Care Cost Containment Council, or PHC4, which has reported on the financial health of the state’s hospitals since 1989, says “a high-quality, cost-effective health care system depends on financially stable hospitals and health systems.”

The council’s 2023 financial report found that 51% of the state’s general acute care hospitals posted a negative operating margin — 15% had margins between 0-4%, and 34% were above 4%. The statewide average operating margin decreased 2.11 percentage points, dropping from 4.37% in 2022 to 2.26% in 2023.

The forgone dollar value for statewide uncompensated care increased 2.9% — from $752 million in 2022 to $774 million in 2023.

In 2022, Pennsylvania, with 12.5 million residents, had an immigrant population of 7.8%, including 3.3% noncitizens. An estimated 5.4% of the population, or 672,800 people, were uninsured, according to KFF, a nonprofit that conducts health policy research.