NFIB

Gov. Ed Rendell and state House members unveiled competing proposals Tuesday to reduce the number of uninsured Pennsylvanians and lower health-insurance costs for small-business owners and working Pennsylvanians.

Gov. Rendell all but conceded defeat for his plan to impose a payroll tax on small business to pay for health care for the uninsured. The governor now is proposing to raid $500 million from a fund that helps doctors pay medical malpractice insurance premiums.

The governor proposed combining funds from the state MCare abatement fund with new taxes on cigarettes, cigars and smokeless tobacco to subsidize his Cover All Pennsylvanians health plan for the up to 10 years. The CAP plan would provide access to health insurance for 767,000 uninsured workers, about 60 percent of total uninsured. Employers would pay 65 percent of the estimated $300 monthly premium or $195 per month per employed participant. State government would provide subsidies to workers and dependents with incomes under 300 percent of the Federal Poverty Level to help them pay their portion of the premium.

The House Insurance Committee on Wednesday passed the measure and reported it to the full House for possible action before the end of the year.

A group of state lawmakers, led by former NFIB member state Rep. Scott Boyd (Lancaster), offered a competing plan that allows insurers to offer basic health-insurance policies for small businesses, including sole proprietors and individuals; includes tax credits for employers who contribute to their worker's health savings accounts; provides tax credits for businesses and individuals who participate in wellness programs and disease management protocols; requires medical charges and reimbursement rates to be made public; and provides for a 'mini-COBRA' for workers who lose their jobs to continue to purchase group benefits.

The governor had originally planned for much of the funding for his CAP plan to come from a proposed payroll taxes on businesses. But the payroll tax proposal met heavy resistance from business groups like NFIB and lawmakers on both sides of the aisle. A recent NFIB Research Foundation study estimated the payroll tax would cost businesses nearly $2 billion annually, result in more than $10 billion in lost sales and over 100,000 lost small-business jobs.

The MCare abatement was created in 2002 to assist doctors reeling from high medical liability insurance costs and threatening to leave Pennsylvania. About $1 billion was delivered to doctors to help pay for their liability insurance. Revenues for the fund were collected primarily from taxes paid by hospitals and doctors on their medical malpractice insurance premiums, cigarette taxes and traffic fines. Physician groups and some lawmakers argue the reason the fund had a surplus was because physicians and hospitals were overcharged for their liability insurance. The MCare fund must be reauthorized by June 2008. The governor has threatened to discontinue the fund if lawmakers refuse to approve a plan to use some of those funds to pay for his Cover All Pennsylvanians plan.

The competing proposal, announced by Rep. Boyd and state House members, include:

• House Bill 1825 -- The Pennsylvania LifeLine Insurance Act, where insurance providers offer basic, standardized plans with fewer mandates which would be more affordable, so many of the uninsured population could obtain coverage;
• House Bill 121 -- Provides tax credits for small businesses for contributions made to an employee's health savings account;
• House Bill 2027 -- Provides tax credits up to $1,000 for services aimed at a healthy lifestyle, including smoking cessation programs, fitness club memberships, exercise equipment and diet and nutrition programs;
• House Bills 1727 and 1728 -- Provide for a per employee tax credit for small employers who offer health care policies that include "disease management" protocols;
• House Bill 1826 -- Reforms the state's current AdultBasic health insurance program to permit it to cover more uninsured Pennsylvanians
• House Bill 2028 -- Expands the duties of the Pennsylvania Health Care Cost Containment Council to publish health-care costs and reimbursement rates for doctors and hospitals;
• House Bill 1824 -- Expands the Federally Qualified Health Centers and other community health-care resources;
• House bills 850 and 1945 -- Lawsuit abuse reform. HB 850 replaces the unfair legal doctrine of Joint and several liability with a comparative negligence doctrine that require plaintiff's to pay damages proportionate to their liability; and
• House Bill 2024 -- Expands the use of health information technology to reduce medical errors and increase administrative efficiencies to reduce health-care costs.