Pennsylvania Gov. Ed Rendell is threatening to withhold state aid to help doctors and other health care providers pay for their medical malpractice insurance unless lawmakers also act on his proposal to expand state health insurance for adults.
Rendell called on lawmakers to set aside at least part of a projected $500 million surplus in the state’s medical malpractice fund, known as MCare, as part of legislation to extend the insurance subsidies for 2008. The aid has been approved on a yearly basis for five years.
“I believe the best and highest use … is to link (the surplus) to health care for all Pennsylvanians,” Rendell said during a news conference.
Rendell’s $317 million Cover All Pennsylvanians initiative to expand subsidized health care to roughly 800,000 uninsured adult Pennsylvanians has been stalled by opposition to a payroll tax that he originally proposed to help pay for it. He is hoping to breathe new life into that proposal by linking it to the pending insurance legislation.
Republican lawmakers who have been against the proposed payroll tax criticized the Democratic governor for using the malpractice insurance subsidies as political leverage to win approval for expanded health care coverage.
“Disrupting a program designed to retain and attract doctors is a very poor policy choice when we are deeply concerned about health care access and quality,” Sen. Gib Armstrong, R-Lancaster, chairman of the Senate Appropriations Committee, said in a statement.
The Senate has passed a bill that would set aside part of the MCare surplus for grants to help health care facilities computerize their medical records and improve infection control.
The health insurance expansion would also be financed with federal Medicaid dollars, a cigarette tax increase of 10 cents per pack, a first-of-its-kind tax on smokeless tobacco and cigars, and premiums that would be paid by small businesses and health plan enrollees. Rendell’s proposed payroll tax would be levied on all but the smallest businesses that do not provide health coverage for employees.
MCare is a state-run program that pays medical malpractice awards and settlements above $500,000 and also subsidizes the premiums that providers pay for coverage.
Lobbying groups for doctors and hospitals say the state subsidy is vital to maintaining Pennsylvania’s supply of doctors by making malpractice insurance more affordable for them.
“I’d hate to see that go away,” said Chuck Moran, spokesman for the Pennsylvania Medical Society.
State law requires doctors and other health care providers to carry $1 million in malpractice insurance. MCare covers all or part of the premiums for coverage beyond $500,000.
The legislation currently before the Legislature would renew the subsidies that help make it possible for MCare to provide the supplemental coverage at low or no cost.
The surplus in the MCare fund reflects a continuing declining in the amount of malpractice claims. This year’s payouts will amount to $191 million, about half of what was paid in 2003, according to the administration.
Doctors who benefit from the program are scheduled to pay $247 million into the fund this year, while an additional $190 million comes from the state’s cigarette tax and $40 million from surcharges paid by motorists cited for moving violations.
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