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Press Release: Pennsylvania Should Preserve and Strengthen Governor's Health Proposal, Analyst Advises

Pennsylvania lawmakers should preserve and strengthen key elements of Governor Rendell’s health care proposal, an analyst from the Center on Budget and Policy Priorities told the House Insurance Committee today.  The proposal, now before the House as the Pennsylvania Health Care Reform Act, aims to expand access to health care and improve quality while reducing health care costs.

Judith Solomon, a senior fellow at the Center, commended lawmakers for taking on the challenge of helping the estimated 800,000 uninsured adults in Pennsylvania obtain coverage.  But failure to endorse important parts of the governor’s plan — such as reforms to the health insurance market that have been criticized by some private insurers — could prevent the plan from achieving its goals, she cautioned.

“The various pieces of Pennsylvania’s plan are interdependent, so major changes in one part of the plan could undermine the plan as a whole, preventing the state from making real progress toward more accessible and affordable health care,” Solomon said.

The bill before the House would prohibit all private health plans operating in the state from varying their rates on the basis of health status.  Insurers also would be forbidden to exclude treatment of pre-existing medical conditions.  These reforms would help keep health coverage affordable by spreading the cost of insuring the sickest Pennsylvanians as widely as possible. 

“Without these reforms, the new Cover All Pennsylvanians health care program would end up serving mostly people who are in poor health, and over time the cost of that coverage would become much higher,” said Solomon.  “That’s why it’s absolutely critical that the insurance reforms in the bill be maintained.”

Solomon also expressed support for the section of the bill providing subsidies to help Pennsylvanians with income up to 300 percent of the poverty line to buy health coverage.  Unsubsidized coverage could cost a family at this income level more than one-sixth of its entire income, she noted.

In addition, Solomon suggested that lawmakers ensure that Cover All Pennsylvanians provide comprehensive coverage that meets the needs of people with chronic conditions and other health problems, as well as providing preventive care and other routine services to all participants.  She also warned against high deductibles or other forms of cost-sharing that would make it hard for participants to get care.

To help pay for the new plan, Solomon advised Pennsylvania to redirect some of the federal Medicaid funds it receives to assist hospitals that care for the uninsured.  (These funds are known as “disproportionate share hospital” [DSH] payments.)  Federal funds can be used for the plan only if the state’s total federal Medicaid funding does not increase, Solomon explained.  The only other way to meet this federal budget-neutrality requirement —  cutting spending in the state’s regular Medicaid program — would likely harm low-income Pennsylvanians.

Pennsylvania reportedly has some $90 million in unspent DSH funds, so diverting some of the unspent funds to help pay for the plan should not affect hospitals’ ability to care for the uninsured.

The House Insurance Committee will conclude hearings on the plan later this month, and the House is expected to take the plan up before it recesses at the end of June.