03/07/2008
Budget hearings concluded on March 6 and the General Assembly returns to Harrisburg on Monday, March 10, to a week being labeled "Healthcare Week."
Healthcare funding continues to dominate budget hearing
As reported last week, the governor's Cover All Pennsylvania (CAP) health plan -- and how the administration plans to fund it -- were the focus for the budget hearings. The director of the Office of Health Care Reform, Acting Insurance Commissioner, Budget Secretary and Secretary of Public Welfare appeared before the House Appropriation Committee.
As an alternative to the payroll tax, Gov. Rendell plans to raid the state fund that helps doctors pay medical malpractice insurance premiums to help finance his CAP 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 the plan.
The MCare abatement was created in 2002 to assist doctors reeling from high medical-liability insurance costs, many of whom were 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 has a surplus is 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 healthcare plan.
Lawmakers have shown apprehension for the funding proposal. Rep. Katie True (Lancaster) wondered if educating people about the dangers of smoking -- which in theory will lead to less consumption -- will then reduce the amount of taxes collected on the products. Budget Secretary Michael Masch agreed that it is a predicament, but that there are other revenue sources included in the funding proposal.
Additionally, lawmakers questioned Ario how the estimated premium cost under CAP could be $286 per month, while and the current premium for adultBasic insurance ranges from $235 to $350 per month. Ario said CAP will have additional coverage which may be a smart buy and more efficient buy. Rep. Doug Reichley (Lehigh) asked how the premium for CAP could be less while providing additional coverage. Secretary Masch retorted that the average premium can go down because more people would be opting into the program, and that discounts on pharmaceuticals and federal money would help supplement the cost.
House Appropriations Chairman Dwight Evans mentioned the intent of the committee next week to vote on bills related to healthcare reform. NFIB will report to you next week on these possible reforms.
Acting Insurance Commissioner and Environmental Protection Secretary questioned concerning the proposed flood tax
Lawmakers questioned Commissioner Joel Ario and Secretary Kathleen McGinty regarding the proposed flood tax on homeowners' insurance policies to fund a flood prevention plan. Ario explained the funding was initially targeted to residential and commercial structures located in the flood plain, but that it was not administratively reasonable. He said they then proposed a $0.07 surcharge per $100 of commercial and residential property coverage. Sen. Don White (Venango) was discouraged that the proposed tax would impact all property owners insurance, while the program would only benefit a few.
Secretary McGinty confirmed the proposed tax will be assessed on all property insurance, not just property in floodplains. The projected revenue from the proposed flood tax will be $3.3 million, which does not include the federal bonding.
Pennsylvania Department of Labor releases analysis of the minimum wage increase
The Minimum Wage Advisory Board, in compliance with the Minimum Wage Act, was completed an annual analysis of the impact of the recent increase. Read the complete report, "Analysis of the Pennsylvania Minimum Wage Increases in 2007."
As reported last week, Acting Labor and Industry Secretary Sandi Vito highlighted that the report does not include anecdotal evidence. The department only used verifiable data.
Have you experienced hard-ships since the enactment of the increase in minimum wage? If so, please contact Gwenn Dando with your experience.
Mark your calendar: Small Business Day at the State Capitol, Tuesday, April 1
We have invited Gov. Ed Rendell, key members of his cabinet and administration, Attorney General Tom Corbett, legislative leaders and key state Senate and House lawmakers to talk about much-needed changes to the state's tax code and the Unemployment Compensation Law to help reduce the cost of doing business in Pennsylvania. In addition, your visibility and your voice in Harrisburg can help us stop proposed mandates that could make it more difficult to run and grow your company. Sign up today!
NFIB has invited UC Board of Review member Eileen Melvin to explain the Unemployment Compensation law, the hearing process and common mistakes that small employers make in the workplace. Last June, we hosted a similar event with Eileen. Members who participated told us it was the most helpful seminar NFIB has ever done and has saved them time and money. For additional information, please contact Gwenn Dando or sign up today!
Let your voice be heard, register to vote! Pennsylvania's primary is on April 22. It is a great time to register to vote so you can help elect pro-small business lawmakers.
For more information, please visit www.nfib.com/PA for state news, views and tools for Pennsylvania small businesses.
Sincerely,
Kevin Shivers, State Director
Gwenn Dando, Assistant State Director
