Pennsylvania Looks to Control Costs of ‘Cover All’ Health Program

Uninsured adults could find themselves on a waiting list if the demand for a proposed program to expand government-subsidized health coverage outstrips the state’s ability to pay for it, a Rendell administration official said.

Rosemarie B. Greco, director of the Governor’s Office of Health Care Reform, said at a state House Appropriations Committee budget hearing that Gov. Ed Rendell’s “Cover All Pennsylvanians” proposal was not an entitlement program.

“So there could be a waiting list?” asked Rep. David Reed, R-Indiana. Greco acknowledged that possibility, depending on how many uninsured adults applied for coverage.

Gov. Ed Rendell’s proposal to extend state-subsidized health insurance to about 800,000 uninsured adults is part of a broader set of initiatives designed to make employee health insurance more affordable for small businesses, reduce health care costs and improve the quality of care. His plan also would outlaw smoking in workplaces, restaurants and bars across the state.

Money for the program would come from several different sources, including a new 3 percent payroll tax on the estimated 100,000-plus employers that do not provide insurance for employees as well as from new levies on cigarettes and other tobacco products.

Greco said Rendell’s proposal includes enough money to insure the current number of adults who cannot afford private insurance but make too much money to qualify for taxpayer-subsidized insurance. If lawmakers are concerned about waiting lists, she told a reporter after the hearing, they could appropriate more than the governor requested.

Some Republicans on the committee expressed concern that Rendell’s proposal would encourage businesses that provide health benefits to drop coverage if paying the payroll tax would be cheaper.

“If you look at most small businesses, their cost for health care is probably about 12 percent (of payroll),” said Rep. Stephen Barrar, R-Delaware. “Why would any business continue to provide health insurance to employees if they can get it at 3 percent?”

Greco said that was unlikely to happen, especially in a tight labor market.

“Their employees can go elsewhere,” she said.