Affordability in Health Care is Key to Greater Access

An Editorial by Sen. Jake Corman

As the governor and Legislature begin negotiations on this year’s state budget, one of the key areas of debate will be health care.

Governor Rendell is proposing an expensive and far-reaching new program to provide health care coverage to uninsured state residents. Before we implement a new program with a price tag estimated between $1.4 billion and $3.2 billion, we need to understand some basic facts: the billions of dollars taxpayers already spend to provide health coverage, the actual numbers of the uninsured, and details of the governor’s plan.

Pennsylvania taxpayers already spend $6.3 billion a year to provide health insurance to those who need medical assistance. If you qualify, you get the services no matter what the cost. We cover everything from dental benefits, eyeglasses, private nursing, prescription drugs, and residential treatment.

Pennsylvania pays $163.3 million for adultBasic – a health insurance program for individuals who are between the ages of 19 and 65. And, we cover all kids. CHIP, the children’s health insurance program, which was established in 1992 and has been expanded twice, is funded at over $100 million in state taxpayer and federal funding.

In total, Pennsylvania serves over 2.1 million people through medical assistance, adultBasic and CHIP, and we spend $6.3 billion doing it. If we include the federal taxpayer dollars of $7.8 billion, that’s $14.1 billion in total.

According to the state Department of Insurance, 92 percent of Pennsylvanians have health insurance coverage. That’s right. When we talk about “the uninsured,” we’re talking about 8 percent of Pennsylvania residents. I’m not pointing this out in such a way as to make light of the uninsured’s plight. It’s an effort to be honest about the numbers we’re dealing with.

Nearly half of this 8 percent are relatively young — between the ages of 18 and 34. Further, 38 percent of the uninsured have the ability to pick up coverage from an employer, but don’t. And nearly half of uninsured Pennsylvanians – 44 percent – have been without insurance for less than a year.

The fact is, when you account for residents eligible for existing programs, or have declined coverage offered by their employer, we’re left with roughly 4 percent of Pennsylvanians uninsured or without access to private insurance.

Rather than create another new government program for this 4 percent, shouldn’t we be considering every alternative that will lower the cost of health care so everyone who wants coverage can have access? I say yes. Instead of real reform, the governor’s plan simply preserves the status quo.

Currently, individuals in adultBasic pay a premium of $306 in addition to minimal out-of-pocket expenses for hospitalization, physician care, emergency services, diagnostic testing, maternity care and rehabilitation and skilled care coverage. The governor’s plan would include all of this and also cover prescription and behavioral health services with a less expensive $286 premium.

In order to provide the expanded services at the reduced rate, the administration plans to greatly reduce the amount they pay to insurance companies for their services. While the previously uninsured individual will benefit “who will pay for it? The rest of us ” because insurance companies will have to jack up the rates of private companies and the already insured to cover the losses.

While employers may or may not be subject to a 3 percent fair share assessment, they will be required to pay a portion of the premium for their employees, in addition to a possible 3 percent tax, or “fair share assessment” as the governor calls it.

A new version of the governor’s proposal was recently passed by the House of Representatives which, incredibly, includes no mechanism to pay for the program. It actually contains the words, “any monies derived from whatever sources” to pay for the program.

“Whatever?” How are taxpayers, who already spend more than $14 billion on health care coverage, supposed to pay for this new plan passed by the House? So far, the answer is, “whatever.”

The Governor’s “Cover All Pennsylvanians” now morphed into another acronym ready slogan, “Access to Basic Care” program falls short when the answer is “whatever.”

I chair the Senate Majority Policy Committee, and on April 30th we will hold a hearing to discuss the affordability of health care so we can offer the majority of those uninsured, who are between the ages of 18 and 34, better access to affordable coverage.

Some of the ideas that we will hear about and those I will advocate for are: allowing individuals to purchase minimal insurance coverage without all of the mandates that most insurance plans cover, allowing dependents to stay on their parents policies for longer periods of time, tax incentives for health savings accounts, and other cost savings measures. These reforms will reduce the cost of health care and make health insurance affordable for people, reduce the number of uninsured, and reduce the out of control, budget breaking annual premium increases we all face year after year.

We have to get serious about this. We have to be serious about affordability, cost reduction, and savings in our health care system before we back a plan designed to grab national headlines that doesn’t solve the uninsured problem, but creates an insolvency problem and puts off paying for it until “whatever.”

Don Houser
Phone: 717 787-1377