Published October 9, 2008
PA Health Access Network
Why did the Senate block health care reform?
A lot of excellent legislation went down the tubes in Harrisburg on October 8, the last session day for the Pennsylvania Senate. In addition to affordable health insurance for over 100,000 uninsured individuals, Pennsylvania lost funding for community health clinics, funding to help physicians pay their medical malpractice premiums, the Pennsylvania Health Care Cost Containment Council, the extention of COBRA protections for employees of small businesses, and a requirement that health insurers offer extended family coverage to children in their 20s.
The House and the Governor supported all of these items. Senate Republicans supported the last five, but not the expansion of affordable health insurance. Why not?
It has been commonly reported that the disagreement had to do with concern about the state budget. With the economy sliding into recession, and monthly state revenue receipts below expectations, that is a plausible explanation.
But when one looks more closely, that explanation doesn’t hold water. The Governor’s final proposal to Senate Majority Leader Dominic Pileggi would have required just over $1 billion in state funds over five years to subsidize the health insurance costs of individuals enrolled in PA ABC. Pileggi’s counter-proposal would have provided about the same level of state funds - a little more, in fact.
What Pileggi’s counter-proposal did not include was an upgrade in the benefits package to include prescription drug and behavioral health coverage. Without that upgrade in benefits, Pennsylvania’s subsidized health insurance program could not qualify for federal funding via a Medicaid waiver. And without federal funding, the program could grow to only half the size - say 65,000 individuals instead of 130,000.
Governor Rendell was unwilling to settle for a half-a-loaf and the negotiations ended.
The Governor’s position is easy to understand. After extensive conversation with the federal Medicaid officials, he is confident a federal waiver would be granted to PA ABC if prescription drug and behavioral health coverage were added to the benefits package. This not only would increase the medical effectiveness of the coverage but would enable Pennsylvania to cover twice as many people at no additional cost to Pennsyvlania taxpayers. It’s a no-brainer.
The opposition by Senate Republicans to Pennsylvania seeking a federal waiver is more difficult to understand. Only after the waiver had been granted and the federal dollars became available would Pennsylvania significantly expand enrollment. If the waiver were never granted, then Pennsyvlania’s program would never expand beyond what state dollars could support.
Behind the Senate’s reluctance to seek a federal Medicaid waiver may be the fact that federal funds to expand PA ABC would ultimately come from savings in other forms of Medicaid spending already occurring in Pennsyvlania. For example, with more of the uninsured covered by PA ABC, the funding plan assumes hospitals would require less Medicaid money to cover uncompensated care costs. Were the hospitals comfortable with this reallocation? Apparently not; the Hospital and Healthsystem Association of Pennsylvania never strongly supported the plan.
A second factor that may account for the reluctance of Senate Republicans to seek federal funds is that by helping twice as many people buy affordable health insurance, PA ABC would thereby become more strongly established in the Commonwealth and more strongly supported by the public. How is this a bad thing? It isn’t; nevertheless, it may have prompted some senators to withhold their support because of the possibility that PA ABC would someday need to be supported by a tax increase.
Had Senate leaders engaged in vigorous discussion with the Governor at an earlier date, all of these concerns could have been fully aired and addressed. As it was, too much was left until it was too late. As a result, much hope ended in much frustration.