PA Auditor: Stop Raiding Tobacco Funds

A Special report out of the Pennsylvania Auditor General’s office today outlines how state lawmakers have diverted $1.3 billion in Tobacco Settlement funds in recent years without asking for any public input. In 2001 the General Assembly mandated that annual tobacco settlement payments be divided by set percentages among several accounts. Eight percent was to be deposited to an endowment account for the future, 30 percent for adultBasic and Medicaid for workers with disabilities, 18 percent for health research, 13 percent for home and community-based services for the elderly, 12 percent for tobacco prevention and cessation programs, 10 percent to reimburse hospitals for uncompensated care, eight percent to expand the PACENET prescription drug program, and one percent for cancer research. Wagner says in recent years those ratios have been ignored.

Wagner says the legislature has diverted funds to pay for Medicaid and to prop up the general fund. He says the endowment that was to provide for health needs in the future will be completely drained later this year.

Since 1998 the state has received $4.4 Billion in tobacco settlement funds. Payments to the state over the next seven years are expected to average $370 million. Between 2019 and 2025 they are expected to average $355 million a year.

Wagner is calling on the state legislature and the governor to immediately use all incoming funds to reopen the low income health insurance program adultBasic and then hold a series of public hearings on the allocation of future funds. “Things may have changed over time and maybe more funds should be directed to one program or the other,” says Wagner “but those decisions should be made in a public process, with public input. Something that has not happened since the inception of tobacco settlement funds.”

Wagner says, “It’s about time there is a little bit of sunshine into this process.” He says it is not too late to rebuild the endowment fund and it is not too late to save adultBasic for the more than 40,000 individuals who lost coverage this week.

Rallies Try to Save adultBasic

The state supported low-income health insurance known as “adult Basic” expires at midnight tonight and rallies across the state today called on the governor to restore spending. When the adultBasic program was launched in 2001 the state’s four Blue Cross and Blue Shield companies and money from the State’s tobacco settlement funded it. When the tobacco money ran out, the state covered the gap and now Governor Tom Corbett has decided to let the program expire.

In a rally in Pittsburgh's Market Square today, Pennsylvania Consumer Health Coalition Executive Director Beth Heeb says adultBasic was a lifeline for nearly 42-thousand Pennsylvanians. “People who work two and three jobs to support their families, people whose employers cannot afford to offer health care, people who are sick suffering from chronic illnesses and are priced out of the private insurance market due to their pre-existing medical conditions,” says Heeb.

Activists are asking for the governor to fund adultBasic through the end of the fiscal year and to find a way to preserve the program through 2014 when federal health care laws begin. They contend there are several options before the governor that he can choose if he wants to save the program.

Alison Zapata was on adultBasic. She was on the waiting list for more than three years before getting into the program less than a year ago. Zapata says two months after she learned she was pregnant, she learned the program was being eliminated. “[It] kind of sent me into a panic mode,” says Zapata. She says she cannot afford to go on her fiancées insurance and she thinks the other government-supported options, which cost more and cover less are, “scary.”

Thousands To Lose Health Insurance in PA

A state-run health insurance program for 40,000 low-income Pennsylvanians will expire Monday, but the Corbett Administration won’t step in to extend adultBasic.
Republican Governor Tom Corbett blames his Democratic predecessor for adultBasic’s demise.
Corbett spokesman Kevin Harley says Governor Rendell shouldn’t have extended the program’s rolls, knowing its funding agreement was expiring.

"It’s unfortunate that Governor Rendell never lived up to his commitment. But the fact is, it’s unsustainable, and there’s no money in the budget for it."

adultBasic supporters aren’t giving up hope. At a Capitol rally, Reverend Amy Reumann of the Lutheran Advocacy Ministry urged Corbett to step in and save the program.

"We don’t accept it at this point. We still think there is room. And if he could simply function in the role to bring all the players to the table, where there could be some negotiation around, how can we continue it? Do the blues still have a charitable obligation, and if so, what form is that going to take? What could be the role of other insurance agencies out there?
I think there are still solutions and possibilities out there, if there’s a will. And we look to him to give that moral leadership."

Philadelphia-based Community Legal Services has threatened to sue over Corbett’s decision to end the program. Harley brushed off the threat, saying, “the state gets sued about 70 times a week.”

Health Insurance Equity Bill Brought to State House

State Representative Rob Matzie has introduced a bill that would bring Pennsylvania’s insurance law into compliance with new federal requirements, and also give the state Insurance Department authority to enforce those laws. Under the changes in the non-discrimination effort, insurers would have to:

* Provide equal insurance coverage for those struggling with mental illness or addiction
* Stop requesting genetic testing of clients and potential clients
* Protect dependent college children who must take a medical leave of absence from higher insurance rates or loss of coverage imposed by school insurance policies

Matzie says it is “imperative” this bill is passed by October, else the state will be faced with penalties from the federal government. He says the bill would basically put the execution of these federal laws into state hands. The legislation is now up for a vote in the House.

SportsWorks Suffers Construction Delays

The completion of Carnegie Science Center’s new SportsWorks facility is delayed until late December, says the Center. Spokesman Mike Marcus says “normal construction delays” such as bad weather and slow permitting processes have put the building behind schedule, but he doesn’t expect it to be slowed any further. “What we’re working on now is getting the frame and skin up on the building. Once those are on later this summer/early fall, the weather isn’t really an issue because then we’ll be working on the exhibit and doing all the work inside the building,” says Marcus. The old building was bought late last year by the Port Authority to complete its North Shore Connector Project. Marcus says the new facility will feature many of the exhibits from the old SportsWorks, but will also feature a health aspect that correlates sports and exercise to good health. Though the exhibit will be managed by the Science Center, Highmark Inc. will be partnering with them specifically for the SportsWorks complex.

UPMC Wants Suit Dismissed

The University of Pittsburgh Medical Center is asking a judge to dismiss an antitrust lawsuit filed against it by West Penn Allegheny Health System. WPAHS filed suit in April contending UPMC and Highmark Inc. “conspired to protect one another from competition.” Th suit went o to say, “We believe that for several years UPMC and Highmark have engaged in mutual back-scratching designed to preserve Highmark’s monopoly in health insurance and to permit UPMC to build a monopoly in sophisticated tertiary and quaternary health care in this region.” In its request for dismissal UPMC says the “lawsuit is nothing more than an attempt to divert attention away from its [WPAHS] inability to get its financial house in order and shift blame for its failings to UPMC.” UPMC says there is no legal or factual basis for any of WPAHS’s claims.

Highmark and Independence Kill Deal

Pennsylvania insurance providers Highmark and Independence Blue Cross say they are withdrawing their merger applications with the Pennsylvania Insurance Department. The heads of the two companies say they feel the merger is still very advantageous but believe the state will not approve the deal as they had hoped. The merger was proposed more than a year and a half ago and the state has held 10 public hearings including one in Pittsburgh in July. The CEO's of both insurance providers say they felt the state would reject the merger on the grounds that it would hurt competition. In a statement they say, "We fundamentally disagree" and "This is genuinely disappointing." Highmark's client base is strongest in the Pittsburgh market and IBS is focused mostly in the Philadelphia area however, the two companies do overlap in the center of the state. A decision from the Insurance Department was expected Jan. 28th. That decision was expected to allow the merger but with the stipulation that the merged company not use the "Blue Cross" brand. In the statement IBS says it has worked for "more than 70 years developing our brands' value..." and "Throughout the process, we have stated repeatedly that we would not give up one of our brands."