Budget
Pennsylvania State Budget 2008- 2009
Rendell Budget Again Seeks Health Coverage for Uninsured Adults
Governor's Proposed Medical Assistance Budget Would Expand Prescription Coverage and Avoid Cuts to Eligibility and Services
Governor Rendell announced his proposed budget for 2008-09 to the Pennsylvania General Assembly on February 5. Nearly $480 million would go to provide health care for about 150,000 adults who currently lack a basic health care package, under the Governor's Cover All Pennsylvania (CAP) initiative. This is the second year that the Governor has included funds for CAP. The legislature did not act to expand health care last year. However, he has removed from his proposal the 3% of payroll “fair share assessment” against employers who do not offer their employees health insurance, hoping to gain the support of some in the business community who had been opposed.
The Medical Assistance portion of the budget, which accounts for 20% of state general fund expenditures, contains no proposed cuts, and would extend prescription drug coverage to 43,000 Pennsylvanians for the first time. These individuals, who already qualify for Medical Assistance under the Medically Needy Only (MNO) eligibility category, do not have prescription drug coverage in their benefit package at present. The cost for extending coverage to these Pennsylvanians is $11.3 million this year. The logic of providing a benefit package without prescription drugs has often been questioned, and this expansion would address that deficiency. It would also avoid the incongruous result, if CAP were to be enacted, of having poorer Medicaid recipients qualify for a benefit package that is less generous than CAP recipients with higher income.
Medical Assistance was generally in a holding pattern, reflective of an uncertain economy with a likely negative impact on state revenues. The Administration proposes modest increases for certain providers of services that consumers have problems accessing. They include skilled in-home nurses for children with severe disabilities (for whom $6 million would be allotted), and $1.9 million for dentists, and primary care providers. Health centers and mobile clinics would receive $2.9 million.
For the third straight year, the Administration proposes to “carve out” responsibility for prescription drugs from the managed care plans that participate in Medical Assistance, and administer this benefit under the fee-for-service program. The stated rational is to take advantage of federal rebates that are otherwise unavailable. This change would occur starting in January, 2009, and would be implemented first in the HealthChoices program in the Southeast and Lehigh/Capital zones, along with a new Northwest HealthChoices PLUS zone that is proposed. The last two years, the pharmacy carve out was rejected during budget negotiations.
The new HealthChoices PLUS initiative would introduce the HealthChoices physical health HMOs into a 16 county zone, anchored by Erie County , where they would compete directly with the state's AccessPLUS fee-for-service program. In 12 of the counties, there are already physical health HMOs competing with AccessPLUS. This initiative would presumably require health plans operating in those counties to expand their networks and operate in all 16 counties.
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