Rendell Directs Insurance Commissioner to Delay MCare Abatement Collection

HARRISBURG – Gov. Edward G. Rendell has directed Pennsylvania’s insurance commissioner to proceed with Mcare billing, but to postpone collection until March 31. Mcare is the second layer of medical malpractice insurance coverage that the state’s physicians, and many other health care providers, must purchase.

The governor hopes the delay in billing will give the General Assembly and the administration an opportunity to work out a plan to cover the uninsured through his Cover All Pennsylvanians health insurance program and to provide a 10-year extension on the Mcare abatement prior to the bills coming due.

“I asked for the Mcare abatement extension in tandem with my proposal to provide health care coverage for those Pennsylvanians currently without insurance – a program that I call Cover All Pennsylvanians.

“Because Mcare payouts are now 50 percent lower than they were five years ago, there is a significant and growing surplus of funds in the special state account supported by the dedicated 25-cents a pack cigarette tax,” Governor Rendell said. “Using the dollars in the fund to support the Mcare abatement and affordable health care coverage for the uninsured is the right thing to do, and it is consistent with the original intention of the fund which was to support health-care related expenditures.”

In December, Rendell laid out his plan to legislate a 10-year extension of the abatement program, as well as a proposal which would provide funding for Cover All Pennsylvanians.

The Health Care Provider Retention Fund, which helps pay for the abatement, was established by the legislature in 2003. Since then, the General Assembly has annually approved one-year extensions of the Mcare abatement program.

Health care providers have received nearly $1 billion in Mcare payment relief as a result of the abatement. Over the past five years, the number of medical malpractice filings statewide has fallen while the number of insurers writing med mal policies in Pennsylvania has risen.

In 2007, the two largest providers of medical malpractice insurance proposed historic rate reductions of 11 percent and 6 percent on their med mal premiums, and the total amount of claims payouts for the year is half of the total amount of claims payouts made in 2003.

Rendell’s Cover All Pennsylvanians health insurance plan would ensure that the nearly 800,000 Pennsylvanians who are without health insurance would have access to affordable health care coverage. The plan focuses on providing a private sector-managed health care package for low wage small businesses that have not been able to offer coverage to their employees and for other uninsured individuals.

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