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Governor Rendell's Health Care Reform Cabinet Says Providing Access to Health Care for Pennsylvania's Uninsured is Within Reach

HARRISBURG, Pa., March 4 /PRNewswire-USNewswire/ -- Governor Edward G. Rendell's health care team today told a state panel that public support for the Governor's Cover All Pennsylvanians continues to grow and, with the addition of a tax increase on cigarettes and tobacco products, there are funds to pay for providing the uninsured access to care.

Additionally, the team told the House of Representatives Appropriations Committee that continuing the Mcare abatement will help health care providers pay for their malpractice insurance.

Governor's Office of Health Care Reform Director Rosemarie Greco, Budget Secretary Michael Masch, Acting Insurance Commissioner Joel Ario and Welfare Secretary Estelle Richman stressed the benefits of making sure the uninsured have access to health care and explained the Governor's plan to make that coverage a reality.

"The costs of the uninsured are borne not only by the individuals themselves but also by those who have insurance in the way of higher premiums," said Greco. "We know that 6.5 percent of every premium dollar goes toward subsidizing the uninsured."

The Governor's Cover All Pennsylvanians, or CAP, program is designed to help low wage small businesses that currently do not offer insurance and uninsured individuals.

A November 2007 report from the Economic Policy Institute showed that, from 2000 to 2007, Pennsylvania had the second-highest loss of employer-based health care coverage for people under 65 years old. In 2007, there were 491,392 fewer Pennsylvanians being covered through their employer than in 2000. Employer-based coverage is still the most prevalent way Pennsylvanians receive health care.

"It's critical that we try to stem this erosion of coverage as quickly as possible," said Budget Secretary Masch. "CAP and the Governor's companion insurance reforms can help stem the loss of employer-based coverage by stabilizing the volatility in premium costs for small employers."

Governor Rendell's Prescription for Pennsylvania health care reform plan expands access to affordable health care coverage, improves the quality of care Pennsylvanians receive and gets health care costs under control for employers and employees. Since it was rolled out in January 2007, it has been recognized by The Henry J. Kaiser Family Foundation, Robert Wood Johnson Foundation, and Families USA for its reasonable approach to health care reform.

Several pieces of Prescription for Pennsylvania have been enacted, including new legislation that puts Pennsylvania at the nation's forefront in tackling and reducing hospital-acquired infections; a new program that deals with how chronic diseases are treated; and updates in decades-old laws which allow nurse practitioners, midwives, physician's assistants and dental hygienists to practice to the full extent of their education and training.

Pennsylvania has also expanded its Children's Health Insurance Program, or CHIP, to Cover All Kids and has implemented a new approach to long-term-living services.

Two critical pieces of Prescription for Pennsylvania remain to be passed. The first is a plan to Cover All Pennsylvanians that will make affordable basic health insurance available to eligible low-wage small businesses that do not presently offer health insurance to their employees and to the uninsured. This coverage will be offered through the private insurance market.

Small business employers can participate if they have 50 or fewer employees who earn less than the state average wage and currently do not offer health insurance to their employees. Employers who choose to join CAP will pay approximately $130 per employee per month, and employees will pay a premium of $40 or $60 per month, depending on family income. If family income is less than 150 percent of federal poverty level, the employee will not pay a premium.

All uninsured Pennsylvanians, no matter what size company they work for, would 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 a 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, which would 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. Additionally, 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 offer the same basic health care plan, so employers can compare apples to apples in choosing health care coverage, which will foster price competition in the small group and individual market.

Other Prescription for Pennsylvania initiatives would generate significant health care cost reductions by eliminating additional costs due to avoidable health care acquired infections, avoidable hospitalizations due to lack of community care for chronic conditions, and avoidable errors.

To ensure that these savings are translated into reduced premiums for employers and individuals, Prescription for Pennsylvania would give additional rate approval authority to the Insurance commissioner, tying cost control in health care delivery to cost control of health care insurance.

The Rendell administration's written testimony to the House Appropriations Committee, as well as more information on the Prescription for Pennsylvania, can be found at HYPERLINK ""

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


Amy Kelchner (GOHCR)


SOURCE Pennsylvania Office of the Governor
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