Pennsylvania health system reform hits snag over coverage, liability help

By Doug Trapp
http://www.ama-assn.org

Washington — Pennsylvania lawmakers ended a two-year session in October without agreeing on a bill to cover more of Pennsylvania’s 767,000 uninsured adults or to help physicians with medical liability premiums.

Gov. Ed Rendell and Senate Republicans negotiated until the session’s end in early October but could not reach a compromise on their respective plans. The stalemate also means that, for the first time since 2002, physicians in Pennsylvania won’t receive state assistance with their liability premiums.

Rendell and House Democrats called for a plan that would have covered an additional 223,000 adults in the state by expanding an existing state program for the uninsured known as adultBasic. The plan would cost $1.1 billion a year by 2012, including $250 million in existing state revenues and a $120 million increase in state tobacco taxes. AdultBasic enrollee premiums and federal funding would have covered the rest. The House adopted the plan in March.

Senate Republicans, such as Sen. Edwin Erickson, chair of the Senate Public Health and Welfare Committee, were concerned that the plan’s funding was shaky. The bill anticipates $414 million a year in federal funding from a federal Medicaid waiver that hasn’t yet been approved. The measure also requires $95 million from a community health fund financed by the state’s four nonprofit Blue Cross and Blue Shield health plans. That agreement expires in 2010.

“We didn’t think [the funding] was sustainable over a period of time,” Erickson said.

Amy Kelchner, spokeswoman for the governor’s Office of Health Care Reform, said waiver negotiations with the Centers for Medicare & Medicaid Services have progressed well. Herb B. Kuhn, CMS deputy administrator, wrote a letter to Erickson on Oct. 17 stating that the waiver to allow the access plan has reasonable requests concerning eligibility and coverage and that “significant negotiations” are under way on a federal financial commitment. The state submitted the waiver request in June.

Rendell sees no roadblocks to extending the community health fund agreement beyond 2010, Kelchner said. The four nonprofit insurers pay up to a 1.6% tax on premiums to the fund, depending on the type of plan. But Erickson said a possible merger between Independence Blue Cross and Highmark puts the funding in doubt.

Senate Republicans countered with their own plan in June. That $100 million package of bills, funded with existing state revenues, would offer coverage to about 500,000 Pennsylvanians through a variety of methods. One piece would assign 159,000 uninsured people to physicians who volunteer to provide charity care in exchange for continuing medical education credits.

Pennsylvania Medical Society President Daniel Glunk, MD, wasn’t sure how many doctors could offer more free care. “I’m not sure how much that’s going to gain more access for people, because most physicians are practicing more than full time already,” he said.

Rendell and Senate Republicans stopped their end-of-session negotiations after both sides failed to agree on the number of additional residents adultBasic should cover.

Rendell wanted at least an additional 100,000 more than the program’s existing 49,000 enrollment. Senate Republicans offered to cover an additional 15,000 in adultBasic.

Rendell slammed Republican senators for failing to consider the House bill seriously and for not expanding coverage to the uninsured by a significant amount. “It’s cruel, wrongheaded, inappropriate and inexplicable,” he said.

Erickson said Rendell and House Democrats are overly optimistic about the future availability of state and federal dollars. Considering the slowing economy, “you can’t count on anything happening at the federal level right now.”

Also, although adultBasic has a waiting list of more than 115,000, the list is outdated, and only about 35,000 to 40,000 of those people still need coverage, Erickson said. Kelchner said some names have been on the list for two years. While many on the waiting list probably have found coverage by now, the list is growing by at least a few thousand people each month.

No liability help

Erickson said lawmakers on both sides are still interested in finding a compromise to continue helping physicians pay for their medical liability insurance. But Rendell has insisted he will not support extending physicians’ premium assistance unless the Legislature also agrees to cover a significant number of the state’s uninsured. The Senate has adopted stand-alone measures extending the premium help at least three times, Erickson said.

The state’s Medical Care Availability and Reduction of Error program, or Mcare, provides $500,000 in liability insurance in addition to the $500,000 in coverage physicians are required to buy on the private market. Since 2003 the state has tried to retain and attract doctors by using tobacco tax revenue to subsidize at least half of physicians’ Mcare premiums. That measure was not extended.

Dr. Glunk said he’s heard about physicians having cash flow problems because of the unexpected expense for those premiums.

The medical society supports a provision in Rendell’s plan that would phase out Mcare over 10 years, leaving physicians to rely totally on liability insurance from the private market. Because Mcare premiums are based entirely on the previous year’s claims, costs can fluctuate wildly.

The medical society also supports covering more of the state’s uninsured residents, Dr. Glunk said. “But we’re really caught in the middle between two different philosophies on how to accomplish that.”

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