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Governor Rendell Says PA ABC Will Help Low-Wage Small Businesses Pay for Employee Health Coverage

Grants Will Help Firms That Already Offer Insurance to Workers

ERIE, Pa., May 29 /PRNewswire-USNewswire/ -- Governor Edward G. Rendell today said more than 10,000 uninsured adults in Erie County -- many of whom who work for small businesses and a quarter of which are on a waiting list to receive health care coverage -- urgently need the state Senate to approve a plan to help them gain access to health insurance.

He said small businesses that currently offer insurance would also benefit from the plan's $42 million in grants to ensure they maintain their commitment to providing health care coverage.

"I want small businesses to know that the House-approved PA Access to Basic Care can help them -- whether or not they currently offer health insurance to their employees," the Governor said while visiting the city of Erie to discuss the challenges of uninsured small businesses and the plight of uninsured individuals at the Martin Luther King Center.

"The vast majority of Pennsylvania's uninsured adults have full-time jobs and many are employed by small businesses that struggle to make a profit. More and more, these small businesses are forced to choose between continuing to pay hefty insurance premiums and letting their employees go without insurance.

"For the past year-and-a-half, I've heard from countless small business owners who have maintained insurance coverage for their employees despite the cost and asked what we could do to help them -- and PA ABC provides the answer. In addition to offering coverage for uninsured small businesses, PA ABC provides $42 million in 'CARE grants' to help small businesses that already provide health care for their employees."

The Governor called for passage of Pennsylvania Access to Basic Care, a health care plan that would be offered through the private market and subsidized by state and federal governments for small, low-wage businesses without insurance and uninsured individuals.

CARE grants will help relieve the burden on businesses who are offering insurance by providing up to 25 percent of the cost of health coverage credited to the employer, as long as that employer meets the eligibility requirements for ABC and carries a tax liability. The employer's package can be a traditional insurance package or some sort of health savings account.

"Pennsylvania will be one of the first states in the nation to provide financial assistance to our small employers who are doing the right thing by providing insurance to their employees," the Governor said.

The Governor cited a recent study that showed a decrease in the total number of employers providing health insurance in Pennsylvania is especially troublesome. Between 2000 and 2006, more workers in Pennsylvania lost employer-provided health insurance than workers in any other state, except California.

"Public opinion polls show increasing anxiety about the current health system, as more employers shed coverage benefits and premium costs outpace inflation each year," Governor Rendell said. "If the remaining key components of the Prescription for Pennsylvania are not enacted, especially ABC and the insurance reforms, even more working Pennsylvanians are likely to lose coverage.

"That's why I favor grants that help small businesses cover their health care costs. It will help stem the erosion of employer-provided health care."

PA ABC will also help eligible small employers who do not offer health benefits. By signing up for ABC, the employer, the employee and the commonwealth will share the cost of the insurance. The employer will be required to contribute at least 50 percent of the total monthly cost for each employee or not less than $150 dollars, the employee will have a monthly premium of up to $60 per month depending on their income and the application for subsidy.

Health coverage under PA ABC will be offered through private insurance companies. Employers can participate if they have not offered health care coverage to their employees for at least six months, if they have 50 or fewer employees and, if, on average, these employees earn less than 300 percent of the federal poverty level, or $31,200 per year.

"The New York Times reported that a recent Kaiser Family Foundation poll found that, in the past year, 42 percent of Americans said they or a family member postponed or skipped treatment, did not fill a prescription, cut pills in half or skipped doses, or had problems getting mental health care because they had difficulties affording health care," the Governor said. "That statistic is stunning and troubling."

Because the cost of health care has soared 75 percent over the past five years and wages have only risen 13 percent, thousands of Pennsylvanians are struggling to provide health insurance for their families. According to an Insurance Department study, there are 767,000 uninsured adults in Pennsylvania. Some 70 percent of the uninsured cite cost as the main reason for not having health insurance coverage. Bringing down the cost of coverage would help individuals and small businesses who desperately need coverage.

The Governor said 71 percent of uninsured adults in Pennsylvania are employed, 76 percent of uninsured adults have household incomes of less than $60,000 for a family of four and 27 percent of uninsured adults have been without health care coverage for more than five years.

Families USA released a study that estimates that approximately 710 working-age Pennsylvanians died as a result of lacking health care in 2006, which equals nearly two people every day. Nationally, the lack of health insurance was responsible for twice as many deaths as homicide in 2006.

Prescription for Pennsylvania is Governor Rendell's plan to: ensure access to affordable health insurance for all Pennsylvanians; expand access to health care; improve the quality of care; and help bring health care costs under control for employers and workers.

All uninsured adults in Pennsylvania -- no matter what their employment status or income level -- will be able to purchase affordable health insurance through this program at the same premium rate the commonwealth pays. In addition, an individual from a family of four that earns up to $42,400 a year will receive help from the state in paying part of his or her PA ABC premium.

"It isn't only the uninsured consumer who pays a price," the Governor said. "About 6.5 percent of insurance premiums paid by businesses and individuals cover just the cost of health care for the uninsured. As a result, every Pennsylvanian pays the cost of having an inadequate health care system."

For more information on the Governor's Prescription for Pennsylvania, go to

The Rendell administration is committed to creating a first-rate public education system, protecting our most vulnerable citizens and continuing economic investment to support our communities and businesses. To find out more about Governor Rendell's initiatives and to sign up for his weekly newsletter, visit:

County Adult Basic Total Number Uninsured % Uninsured Per Capita

Waiting List of Adults Adults Adults Uninsured

(19-64) (19-64) Ranking

Erie 2,243 143,340 10,340 7.2% 57


Elisabeth Myers, GOHCR


SOURCE Pennsylvania Office of the Governor
Copyright©2008 PR Newswire.
All rights reserved

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