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Key Healthcare Investments in Pennsylvania's State Budget

Kyle Fisher

State lawmakers agreed on a new budget in mid-November—more than four months into the fiscal year. The 2025-2026 budget includes $50.1 billion in spending, up 4.7% ($2.27 billion) from last year.  The Department of Human Services received $20.2 billion, an increase of 5.7%. The budget makes no major changes to Medicaid programs, but includes key investments in healthcare. Read below to learn more about what's included in the final budget and what didn't make it. 
 

What's in the Budget 

The budget includes several investments in healthcare programs and initiatives:  

  • More Funding for Managed Care Programs – Community HealthChoices received $622 million more in state funding (a 10.7% increase).  Combined with additional federal funding, lottery funds, and provider assessments, the CHC appropriation rose by just over $2 billion (13.45%).  The two HealthChoices programs for physical and behavioral health received $124 million more (a 3.5% increase). These increases help cover rising costs resulting from inflation and post-pandemic Medicaid enrollees needing more care than anticipated, and ensure the programs can continue to serve Medicaid recipients.  
     
  • Higher Pay for Some Home Care Workers –  The budget includes $21 million to raise pay for direct care workers in the participant-directed model in Community HealthChoices, OBRA, and Act 150. This affects about 8,500 people utilizing Personal Assistance Services (PAS) and hiring their own personal care workers through Tempus.   
     
  • More Funding for Intellectual Disability & Autism (ID/A) Services – The budget adds $154 million (a 6.1% increase) for ID/A services. This continues to support the payment rate increases and additional Consolidated and Community Living Waiver slots added in last year's budget .  
     
  • Support for Rural Hospitals - An additional $10 million in state general funds will go to supporting rural hospitals through Medicaid fee-for-service supplemental payments. 
     
  • New Rural Health Transformation Funding –  The budget includes $187 million in expected federal funding for Pennsylvania's Rural Health Transformation Program, which aims to improve healthcare access in rural areas. Learn more about Pennsylvania’s proposal in our recent post here.  

 

What Didn't Make It 

Several of the Governor's proposals were not included in the final budget. Those that didn’t make it include: 

  • Healthcare reentry supports for people leaving incarceration
  • A third $20 million installment for county mental health base funding
  • Dedicated funding for the 988 Suicide and Crisis Lifeline and crisis services 

 

For more details, see the General Appropriations Act (Act No. 1A of 2025) and the PA House Appropriations Committee Budget Summary.