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Senate of Pennsylvania
Session of 2013 - 2014 Regular Session

MEMORANDUM

Posted:	December 11, 2012 10:01 AM
From:	Senator Mike Folmer
To:	All Senate members
Subject:	Healthy Pennsylvania Package

I plan to reintroduce elements of my “Healthy Pennsylvania” package to reform health care in Pennsylvania through consumer-driven/market-driven initiatives. While the individual effect of these bills might vary, their collective impact would reduce health care costs while enhancing the quality and accessibility of health care. The “Healthy Pennsylvania” bills include:

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Document #1

Description:

Promote Health Savings Accounts – HSAs (previously SB 212, cosponsored by Alloway, D. White, Mensch, Rafferty, Erickson, Orie, Browne, Pippy, Brubaker, Pileggi, Waugh, and Baker):   Health Savings Accounts (HSAs) were created by federal law in 2003 as privately owned savings accounts funded with pre-tax dollars.  HSAs are similar to 401(k) retirement plans, but rather than allowing people to save for future retirement expenses, they allow people to save for future medical expenses.  Tax credits for small businesses with HSAs help to promote them.   HSAs are popular with the previously uninsured.  Government-subsidized health insurance programs tend to attract those who are already insured.  Because HSAs are bound to “qualified high-deductible” health plans, they cost less and reduce spending.

Document #2

Description:	Establish an HSA option for government employees (previously SB 213, cosponsored by Alloway, D. White, Mensch, Erickson, Browne, M. White, Pippy, Pileggi, Waugh, and Earll):   In addition to encouraging HSAs for small business, this bill would establish HSA options for state and municipal employees.  A number of other states have taken a similar approach.

Document #3

Description:

Sunset Health Care Mandates (previously SB 214, cosponsored by Alloway, D. White, Mensch, Erickson, M. White, Pippy, Pileggi, Waugh, and Earll):   Pennsylvania has forty mandates that must be part of all health insurance packages.  Some mandates are said to reduce health care costs while many are believed to increase costs.  If each existing mandate increases costs by just 1 percent, consumers pay $5.1 Billion annually in extra costs – yet they have no say in whether these costs are warranted.   The first step in giving consumers more choices is requiring that each of the current insurance mandates be periodically justified by sunsetting all current and/or proposed mandates after five years – subject to reauthorization by the General Assembly.

Document #4

Description:	Lift mandates from HSAs (previously SB 215, cosponsored by Alloway, D. White, Mensch, Pileggi, Waugh, and Earll):   In order to provide health care consumers with a basic HSA package, legislation is needed to exempt HSAs from state-mandated insurance benefits.  As noted above, there are forty state mandates currently imposed on health insurance.

Document #5

Description:

Increase Competition among Health Insurance Carriers (previously SB 216, cosponsored by Alloway, D. White, Mensch, Rafferty, Browne, M. White, Brubaker, Waugh, and Earll):   The current lack of competition among Pennsylvania health care insurers has hurt consumers because they have few choices on issues of quality and/or costs.  “Healthy Pennsylvania” proposes to increase competition among health care insurers by allowing out-of-state insurers to offer their products from other states in Pennsylvania.  As many of these products do not include existing Pennsylvania health care mandates, consumers will be allowed to choose whether they want coverage with or without current Pennsylvania mandates.

Document #6

Description:

Establish Tax Deductions/Credits for those who Pay for Health Care (previously SB 217, cosponsored by Alloway, D. White, Mensch, Rafferty, Erickson, Browne, M. White, Pippy, Brubaker, Waugh, and Earll):   With the ever-increasing costs of health care, more and more people (especially retired people) are covering all or a portion of their health costs.  Proposed tax deductions/tax credits would be:   Health Insurance Premium Deduction:  authorize 100% of the amount paid for non-reimbursable, qualified health insurance premiums to be deducted from a taxpayer's Pennsylvania taxable income   Health Insurance Tax Credit:  allow self-employed taxpayers (who are otherwise ineligible for the federal income health insurance tax deduction under federal law) to receive a tax credit

Document #7

Description:

Establish a State High Risk Pool (previously SB 218, cosponsored by Alloway, D. White, Mensch, Erickson, Orie, Browne, Scarnati, M. White, Tomlinson, Brubaker, Pippy, Baker, Greenleaf, and Earll):   Risk pools are state-created, nonprofit associations that can help fill gaps in insurance coverage by providing coverage for those who are denied health insurance for medical reasons.  Such a pool would also ensure the ability of all insurers to appropriately match premiums to the cost of the underlying risk in all products sold in the Pennsylvania marketplace.  Many other states have some version of a high risk pool.

Document #8

Description:

Phase Out MCARE (previously SB 219, cosponsored by Alloway, D. White, Mensch, Earll, Piccola, and M. White):   Each year, the General Assembly is faced with an ongoing challenge of budgeting moneys to the Medical Care Availability & Reduction of Error (MCARE) Fund.  Meaningful tort reforms would help to alleviate medical malpractice claims.   However, until tort reform is enacted, “Healthy Pennsylvania” proposes to phase out the MCARE Fund and return liability coverage to the private market by using current revenues from the cigarette tax and the Catastrophic or “CAT” Fund for automobile insurance.  This bill would both pay down and ease the costs of transition from MCARE to the private insurance market.

Document #9

Description:

Exempt Pennsylvania from the Federal Healthcare Mandates (previously SB 220, cosponsored by Robbins, M. White, Orie, Yaw, Argall, Smucker, Erickson, Alloway, Ward, Rafferty, Corman, Scarnati, D. White, Brubaker, Eichelberger, Waugh, Baker, McIlhinney, Earll, Piccola, and Mensch):   A number of states have proposed – either by statutes or constitutional amendments – to reject the federal health care mandates.   Modeled after Virginia law, this element of :Healthy Pennsylvania” would stop the federal government from forcing citizens to purchase government-approved health insurance by preventing Pennsylvania residents from being charged a penalty, assessment, fee or fine as a result of their failure to obtain health insurance coverage.