Budget Secretary Says PA ABC Health Care Plan is Affordable, Sustainable

Plan Aids Small Businesses and Individuals Without Insurance



HARRISBURG, Pa., May 5 /PRNewswire-USNewswire/ -- Budget Secretary Michael J. Masch said today that the Pennsylvania Access to Basic Care program that the House of Representatives adopted in March is affordable and sustainable. Governor Edward G. Rendell and people from across Pennsylvania have been urging the state Senate to quickly approve the measure, which passed the House with bipartisan support.



"Critics of PA ABC have said they don't know how much the plan will cost and how it will be possible to fund it over time," Masch said. "We now have solid revenue and spending projections that show that the identified revenues are more than adequate to fully fund all of the programs in PA ABC on a sustainable basis."



At Masch's direction, the Governor's Budget Office worked with an international actuarial consulting firm, Mercer, to estimate the likely costs of PA ABC. The budget office also examined the level of funding available to support PA ABC over the next 10 years.



PA ABC is a private-sector health insurance package that would be available to eligible small businesses and low- and moderate-income individuals. It builds upon the health insurance proposals that were part of Governor Rendell's Prescription for Pennsylvania health care reform plan.



According to an Insurance Department study, there are 767,000 uninsured adults in Pennsylvania. PA ABC especially targets small businesses because the majority of Pennsylvania's uninsured adults have full-time jobs and many are employed by small businesses. PA ABC enables these uninsured individuals and their employers to purchase health coverage that is comprehensive, affordable and focused on wellness and prevention rather than costly emergency treatment.



Health coverage under PA ABC will be offered through private insurance companies. To discourage employers from dropping coverage they already offer, the PA ABC bill offers health care grants to small employers who already offer coverage and have low-wage workers. The bill prohibits employers from participating in PA ABC if they have offered health care coverage to their employees over the past six months.



Because low-income workers in small businesses have the hardest time obtaining affordable health coverage, the PA ABC bill allows employers to participate in PA ABC if they have 50 or fewer employees and, if, on average, these employees earn less than 300 percent of the federal poverty level, or $31,200 a year.



All uninsured adults in Pennsylvania -- no matter their employment status or income level -- will be able to buy affordable health insurance through this program at the same premium rate the commonwealth pays. Those with incomes over 300 percent of the federal poverty level will have to prove that they haven't been able to find affordable health care coverage in the private market. Premiums will be reduced for individuals and families with low or moderate incomes. For example, an individual with a family of four would be eligible for a lower ABC premium if that family earned $42,400 a year or less.



The key funding sources for PA ABC are: state funds used currently to support Pennsylvania's much more limited and more expensive adultBasic program; federal matching funds; premium payments paid by participating employers and employees and other individuals; and a portion of state cigarette tax revenues that has been earmarked to support improved access to health care for Pennsylvanians.



The Governor's Budget Office analysis found that the estimated total cost of PA ABC in the first year will be $501 million, which would permit nearly 143,000 uninsured Pennsylvanians to obtain affordable health coverage. By the fifth year, the estimated total cost of the pla