HARRISBURG – Gov. Edward G. Rendell said Pennsylvania must provide access to health care coverage for 767,000 uninsured adults and that it can be done while still ensuring that physicians, especially high-risk specialists, are able to affordably practice in the state. The governor said he believes Pennsylvania can accomplish both by using surpluses in the Health Care Provider Retention Account.
“Since I announced Cover All Pennsylvanians – or CAP – nearly 11 months ago, I have heard only one criticism: that the CAP funding plan included a Fair Share Assessment (FSA) to help cover the costs,” Rendell said. “So I am pleased to announce today that by using available surpluses in the state Health Care Provider Retention Act and combining them with the other CAP funding sources that I previously proposed, we can provide affordable health care coverage for the thousands of hard-working people who lack regular access to comprehensive health care.
“Best of all, we can do this while continuing to provide state-funded abatements that help physicians, especially specialists, and midwives afford their medical malpractice premiums, which keeps health care providers practicing in Pennsylvania so our residents can continue to have access to health care.”
Created as part of the governor’s 2003 medical malpractice reforms, the Health Care Provider Retention Account is a restricted state account that is funded with a 25-cent-per-pack cigarette tax. Health Care Provider Retention Account funds have been used to keep the state’s Mcare program solvent despite the loss of income resulting from the Mcare abatement program, which either cuts in half or eliminates (depending on specialty) the assessments levied on physicians and certified nurse midwives to support the Mcare program.
The abatement program was created by the Governor to provide eligible doctors, midwives, podiatrists and nursing homes financial relief from the Mcare assessment for a specific policy year when the program is in effect. (Act 44 of 2003 initially “abated” doctors and midwives. Podiatrists were added in 2004 and nursing homes in 2006). The 2003 law provided the abatement for 2003 and 2004. Each year since then, the abatement has been extended by the General Assembly for a one-year time period.
Because of the improvement in the medical malpractice climate in Pennsylvania, Mcare claims filings and annual payouts have both decreased dramatically over the past five years, thereby creating reserves in the Health Care Provider Retention Account which are not needed to support the Mcare Fund. The Health Care Provider Retention Account currently has a $400 million balance.
Since the enactment of Act 44 in 2003, the General Assembly has appropriated all of the eligible funds from the cigarette tax to the Health Care Provider Retention Account.
Under Act 44 of 2003, the Budget secretary is directed to transfer funds from the Health Care Provider Retention Account to the Mcare Fund to make up for any deficit in the fund resulting from the Mcare abatement being given to eligible providers. Current law gives the state the authority to use any remaining balance in the Health Care Provider Retention Account for any purpose consistent with the general health and welfare of the people of Pennsylvania.
“Given the dramatic improvement in the medical malpractice insurance market since 2002, it seems reasonable that we should use unspent funds not needed for the abatement program to confront Pennsylvania’s most pressing current health care crisis – the crisis of the uninsured,” Rendell said. “Using the resources in the Health Care Provider Retention Account in this way helps meet both my goals – expanded health care coverage for the uninsured and continuation of the Mcare abatement.”
The governor said that in addition to using available balances in the Health Care Provider Retention Account, CAP could be funded by a combination of the existing funds used to support the AdultBasic program (since CAP would replace and expand on Adult Basic), an increase in the cigarette tax, a first-time ever tax on other tobacco products including smokeless tobacco, and redirection of state-provided uncompensated care payments to health care institutions as the number of patients requiring uncompensated care declines.
The governor said that he shares the sense of urgency the House Democrats are feeling to help the thousands of Pennsylvanians who are pressing for access to affordable health care coverage. He said he understands why House Democrats are reluctant to take action to maintain the Mcare abatement program for health care providers, who have received nearly $1 billion in abatement relief over the past five years, without making parallel progress on making health coverage available to those Pennsylvanians who cannot currently afford it.
“The House Democrats believe that protections for patients need to have the same priority as protection for physicians, and I support that. The good news is that we can do both – provide health insurance for the uninsured, provide access to health care providers for everyone, and help those providers keep their malpractice insurance costs manageable.”