By Jon Hurdle Reuters Wed Jan 17, 2007 5:20pm ET
HARRISBURG, Pa - Pennsylvania became the fifth U.S. state to seek universal health coverage for its citizens on Wednesday when it unveiled a plan to provide medical insurance for some three-quarters of a million residents who currently have none.
Along with other states including Massachusetts and California, Pennsylvania is joining a growing movement among U.S. states to tackle the problem of residents without health care insurance, which according to some estimates number as many as 46 million Americans or about 15 percent of the population.
The problem of uninsured medical costs, often left to be covered at taxpayer expense, has long been seen as a task for the federal government to tackle, and the issue frequently arises during political campaigns for the White House and Congress.
Amid rising costs, the United States spends about 16 percent of gross domestic product on health care, significantly higher than nations such as Canada, at 9.7 percent, and France, at 9.5 percent, which have nationalized health systems, according to the National Coalition on Healthcare, which seeks universal coverage and cost containment in the U.S. system.
Pennsylvania Gov. Ed Rendell said the plan, called Cover All Pennsylvanians, would provide affordable basic health coverage to small businesses and uninsured individuals through the private health insurance market at a time when many cannot afford it.
"Employers and individuals have virtually no chance to keep up with the spiraling cost of health care," Rendell said at a news conference.
Companies would be eligible if they have fewer than 50 employees and if workers earn less than the average state annual wage of $39,000.
The cost to those employers would be about $130 a month per employee. Also, qualified individuals could buy into the plan for between $10 and $70 per month.
Rendell, a Democrat, said he hopes to implement the plan by January 2008. He said it would require the passage of 47 pieces of legislation and numerous rule changes to become a reality.
Unlike residents of Massachusetts and California, individuals would not be required to buy health insurance but Pennsylvania might introduce a mandate after the first three years, depending upon how many people buy into it voluntarily, officials said.
The plan will be paid for in part by a 3 percent payroll tax on all companies that do not provide health insurance. An exemption would be made for the first 50 employees in the first year, a number that will decline in subsequent years.
The cost, which officials said would be specified in the upcoming budget, also would be met by federal matching funds, an increase in a cigarette tax and a tax on smokeless tobacco products. Rendell said the impact on the budget would be limited.
Brian Kelly, director of government affairs for the Pennsylvania Chamber of Business and Industry, said there was likely to be some "skepticism and concern" among the chamber's members toward the plan to tax payrolls of companies that do not offer health insurance.
But the Hospital and Health System Association of Pennsylvania welcomed the plan, saying in a statement it was "encouraged by the governor's efforts to address health care coverage."
Health insurance premiums in Pennsylvania have risen 75.6 percent since 2000, compared with a 17 percent rise in inflation and a 13 percent increase in the median wage, Rendell said.
Maine and Vermont also have taken steps to provide health care coverage for residents.
Reuters 2007. All Rights Reserved.
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