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Governor Rendell Tells Congress 'Prescription for Pennsylvania' Will Improve Health Care Climate for Small Businesses
Date:2/26/2008

ork for, will be able to purchase affordable health insurance through CAP. A family of four earning up to $61,000 a year will receive help from the state paying their premiums, and all uninsured adults who earn more than that amount - 300 percent of the federal poverty level - can participate in CAP by paying the full cost.

Pennsylvania's CAP proposal differs from widely publicized plans proposed in Massachusetts and California in that it is not mandated. Governor Rendell has proposed a sustainable funding model to pay for CAP, including redirecting existing state money, taking advantage of federal match as other states are doing, charging small employers and their employees premiums, using surplus funds in a medical malpractice account and raising taxes by 10 cents on cigarettes and taxing other tobacco products for the first time.

The second critical piece of reform, which is currently being debated, is more effective regulation of the insurance industry. It will ensure that small businesses and other consumers are not faced with skyrocketing costs for their health care coverage.

Pennsylvania is one of only two states in the country that does not limit the rating factors insurance companies can use to determine rates in the small group and individual group market.

Under Governor Rendell's Prescription for Pennsylvania, insurance companies could only use age, location and family size to determine rates. The most expensive premium rate for a certain product would be limited to no more than twice as costly as the lowest rate for small and individual group coverage, so risks could be shared more broadly and insurance could be affordable for more people. And, 85 percent of every premium dollar must be used to pay for health care and, if not, the state Insurance commissioner can require insurers to rebate premiums to employers.

Insurers writing health insurance in the small employer and individual market would be required to
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SOURCE Pennsylvania Office of the Governor
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