Pennsylvania is delaying more than $1.7 billion in payments due to school employee pensions and Medicaid because the state government has run out of funds.
The payments are for the state’s share of pension obligation payments to Pennsylvania’s school employees pension fund, and for reimbursements for medical care under Medicaid. The Medicaid reimbursements, which are due Sept. 22, will be delayed for at least a week, and school officials said they expected the pension obligation reimbursements, which are due Sept. 25, to be delayed by a few days, reported the Associated Press.
The treasury delayed $581 million in the state’s share of pension obligations to the Pennsylvania School Employees Retirement System (PSERS), and $1.169 billion in payments to managed care providers for medical assistance services.
“Without a completed budget, the commonwealth’s Treasurer and Auditor General have said they are not currently inclined to authorize the normal short-term lending that would typically allow for seasonal cashflow interruption,” said J.J. Abbott, a spokesman for Pennsylvania Gov. Tom Wolf. “Delayed payments will remain stalled until funding exists to meet commitments.”
State officials expect rolling delays of payments, at least until spring, said the AP, unless the budget issues are settled before then.
“We’ve been told it’s going out next week,” said Jay Himes, executive director of the Pennsylvania Association of School Business Officials, according to the AP. “After that, we’ve been told, ‘Don’t hold your breath.'”
The AP reports that insurers that administer benefits for 2.2 million Medicaid enrollees will be forced to borrow money to make timely payments to hospitals, physicians, and pharmacies that are required by federal law. It is the first time that the Pennsylvania state government has missed a payment as a result of not having enough money.
“I spoke with House and Senate leaders to try to finalize a budget that protects investments in critical programs important to the people of Pennsylvania,” said Wolf in a statement. “We made progress, and with more work, I believe we can reach a compromise in the coming days.