Pa. governor unveils plan to expand coverage

HARRISBURG, Pa.--Borrowing heavily from a Massachusetts law, Pennsylvania Gov. Ed Rendell on Wednesday unveiled a health care reform proposal that would subsidize coverage for the lower-income uninsured, set up a new state purchasing pool for individuals and small employers, impose an assessment on most employers that do not offer coverage as well as require middle and upper-income state residents to have health insurance.

Under the new proposal, which would require legislative approval, a state purchasing pool would be established and made available to individuals and to small employers that now do not offer coverage and whose workforce on average earns less than state average annual wage. Premiums would be subsidized for lower-income individuals and employees.

The plan also would mandate that those earning more than 300% of the federal poverty level have health insurance, which they could obtain through the purchasing pool, though premiums for those individuals would not be subsidized.

To help fund the subsidies, employers with more than 50 employees and not offering health insurance coverage would be assessed an annual fee equal to 3% of payroll. In computing the amount of the assessment, an employer's first 50 employees would be excluded.

By expanding coverage, the proposal would reduce the amount of uncompensated care and the need by providers to offset that cost by boosting charges on insured patients, aides to the governor say.

Currently, about 900,000 state residents--or 9% of the population--lack health insurance coverage.

A somewhat similar proposal was outlined last week by California Gov. Arnold Schwarzenegger, with more state executives expected to unveil reform packages soon.