12/13/2007
The state Senate, in strong bipartisan fashion, defeated a proposal by Gov. Ed Rendell to raid the state fund that helps doctors pay medical malpractice insurance premiums to help finance his Cover All Pennsylvanians health plan for the uninsured. 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. The proposal was offered as an amendment to HB 489. The amendment failed 35-14.
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.
A similar measure was reported last week from the House Insurance Committee. No action was taken by the full House before it recessed for the year. The House will reconvene Jan. 1.
The governor originally had 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. Gov. Rendell has all but conceded defeat for a payroll tax on small business to finance his CAP plan.
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. Physicians 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.
