Senator Folmer's "Healthy Pennsylvania"

The Elements of Healthy PA

Sunset Health Care Mandates

Pennsylvania presently has 38 mandates that must be part of health insurance products offered in the Commonwealth (interestingly, Washington, DC has only 17 mandates). Some mandates are said to reduce health care costs while many are believed to increase costs. With changes in medical technology and medical delivery, all current (and future) mandates should be systematically analyzed for appropriateness, value, and affordability.

If each existing mandate is increasing costs by just 1 percent, consumers are paying $5.1 billion annually in extra costs – yet they have no say in whether they believe these costs are warranted. Consumers should be allowed to buy these coverages through optional riders.

The first step in giving consumers more choices is requiring that each of the current insurance mandates be periodically justified. Healthy PA would do this by chronologically staggering the sunsetting of all current mandates, as well as sunsetting all future mandates five years after their enactment. Prior to the re-authorization of a mandate by the General Assembly, the PA Health Care Cost Containment Council would have to issue a cost-benefit analysis to the General Assembly.

Promote Health Savings Accounts (HSAs)

Health Savings Accounts (HSAs) were created by federal law in 2003 as privately owned savings accounts funded with pre-tax dollars. HSAs are similar to 401(k) retirement plans, but rather than allowing people to save for future retirement expenses, they allow people to save for future medical expenses.

HSAs are popular with the previously uninsured. Government-subsidized health insurance programs tend to attract those who are already insured. Because HSAs are bound to "qualified high-deductible" health plans, they cost less and reduce spending:

Healthy PA would provide tax credits for small businesses with HSAs (similar to House Bill 121). In order to provide health care consumers with a basic HSA package, Healthy PA would exempt HSAs from state-mandated insurance benefits. Healthy PA would establish HSA options for state and municipal employees. Eleven other states have taken such an approach.

Weed Out Bad Doctors

Healthy PA would deny issuance of a license to any doctor, nurse, or osteopathic physician who has lost his or her license in another state.

Give Consumers More Price Information

Healthy PA would require the PA Health Care Cost Containment Council to collect and disseminate prices relating to the 20 most common health care services or procedures provided or performed in Pennsylvania. Health Care facilities would also be required to post this pricing information inconspicuously for consumers to see.

Establish Tax Deductions/Credits for Those Who Pay for Their Own Health Care

With the ever-increasing costs of health care, more and more people (especially retired people) are covering all or a portion of their health costs. Healthy PA would extend tax deductions and tax credits to these individuals:

• Health Insurance Premium Deduction: authorize 100% of the amount paid for non-reimbursable, qualified health insurance premiums to be deducted from a taxpayer's Pennsylvania taxable income

• Health Insurance Tax Credit: allow self-employed taxpayers (who are otherwise ineligible for the federal income health insurance tax deduction under federal law) to receive a tax credit

Increase Competition Among Health Insurance Carriers:

The current lack of competition among Pennsylvania health care insurers has hurt consumers because they have few choices on issues of quality and cost. Healthy PA would increase competition among health care insurers by allowing out-of-state insurers to offer their products in Pennsylvania. As many of these products do not include existing Pennsylvania health care mandates, consumers will be allowed to choose whether they want coverage with or without current Pennsylvania mandates.

Establish a State High Risk Pool

Risk pools can help fill gaps in insurance coverage by providing coverage for those who are denied health insurance for medical reasons. Risk pools are state-created, nonprofit associations. Thirty-four other states have some version of a high risk pool.

In most states, these pools do not allow public funds to pay premiums. Healthy PA would apply this ban to Pennsylvania law. Additionally, Healthy PA would disallow Medicare-eligible people and require that premium reductions be based upon 100% of the federal poverty level.

As in the auto insurance market, such a pool would also ensure the ability of all insurers to appropriately match premiums to the cost of the underlying risk in all products sold in the Pennsylvania marketplace.

Adopt Cost Containment Measures Used in Other States

Other states have enacted laws that have proven to reduce health care costs, including:

• Collecting and publishing health care facilities' fees for certain services;

• Allowing hospitals to implement emergency room diversion programs, including an "emergency hotline" to determine if the emergency room is in fact the most appropriate venue for care;

• Expanding the information that the Pennsylvania Health Care Cost Containment Council collects relative to facility performance, and requiring this information to be published;

• Promoting the use of electronic health records.

Healthy PA would bring these changes to Pennsylvania.

Reform Medicaid, CHIP and adultBasic

A significant portion of the state budget is devoted to government-mandated or government-controlled health insurance programs, including:

• Medicaid

• CHIP

• PA adultBasic

These programs are made possible with money paid by all taxpayers so that specific classes of citizens may benefit. Healthy PA would establish new income eligibility thresholds for each of these programs:

Phase Out MCARE

Each year, the General Assembly is faced with an ongoing challenge of budgeting money to the Medical Care Availability & Reduction of Error (MCARE) Fund. Meaningful tort reform would help to alleviate medical malpractice claims.

However, until tort reform is enacted, I recommend phasing out the MCARE Fund and returning liability coverage to the private market. Healthy PA would do this by using revenues now being budgeted for MCARE abatement (collected from the cigarette tax and the Catastrophic or "CAT" Fund for automobile insurance). Rather than paying for MCARE abatement, this bill would both pay down and ease the costs of transition from MCARE to the private insurance market.