Commonwealth Court Orders Reinstatement of Adult Basic

Commonwealth Court today ordered Gov. Corbett to reinstate AdultBasic.  The health insurance program was canceled by the Governor as one of his first acts in office and threw about 60,000 off health care rolls.  The program was funded by the tobacco settlement money and from profits by the Blues.  The fact the designated tobacco settlement funds were rerouted to the state’s general fund violated the legal settlement by which they were collected by the state.

State Sen. Rob Teplitz released this statement:

“Pennsylvania’s share of the Tobacco Settlement Act funds were specifically designated for health-related programs, and the funding helped tens of thousands of working Pennsylvanians afford health coverage through the adultBasic plan,” said Teplitz (D-Dauphin/York). “It was wrong for Governor Corbett to take away much-needed health care from low-income working men and women, and I’m pleased that the court has ruled that adultBasic should be reinstated.”

In his previous role in the Department of the Auditor General, Teplitz contributed to the 2011 report issued by Auditor General Jack Wagner recommending that the governor and the General Assembly use settlement dollars for health-related programs as mandated by the Tobacco Settlement Act, Act 77 of 2001.

“After a series of public hearings, we determined that Pennsylvania should not have shifted funds from the Tobacco Settlement Act in order to fill gaps in the state’s general fund,” Teplitz said. “It’s crucial that we work to bring the adultBasic program back so that folks can once again obtain affordable health coverage.”

Uncompensated Care Costs Rise at PA Hospitals

By Chris Lilienthal, Third and State

More than a year ago, the Corbett administration decided to end the state’s adultBasic program, which provided affordable health insurance to about 40,000 low-income Pennsylvanians who were unable to obtain coverage from an employer or through other programs.

We worried at the time that many of those newly uninsured would delay treatments until a health condition snowballed into a more serious and costly problem, sending more people to the emergency rooms of our community hospitals.

The Pennsylvania Health Care Cost Containment Council released a report this week showing that uncompensated care costs at hospitals did in fact rise in the 2010-11 fiscal year, when adultBasic ended. Uncompensated care totaled $990 million – an 11% increase over the prior year.

Dave Wenner at the Harrisburg Patriot-News has more:    

[Hospitals’] average operating margin was 5.58 percent, up from 4.37 percent the previous year. That means the average hospital had a profit of $5.58 for every $100 in revenue… 

“We see the number of hospitals that lost money dropping,” said Joe Martin, the executive director of the cost containment council. “We see the margins rising to a healthy level. That’s all good news. 

“The news that’s a little concerning is the spike in the uncompensated care. And there are still a lot of hospitals, particularly the small- to medium-sized hospitals, that are struggling financially. So there is really two sides to the story.”

But the Hospital & Healthsystem Association of Pennsylvania painted a much darker picture, saying the recent numbers “mask” a bleak long-term reality of hospitals struggling against state and federal budget cuts, while straining to provide a safety net for uninsured and under-insured patients. 

Local hospitals told the Patriot that the loss of jobs and health insurance in the tough economy, as well as high deductibles and other tactics to shift more health care costs onto patients, played a role in rising uncompensated care costs.

And so did adultBasic’s end, as Sharon Ward of the Pennsylvania Budget and Policy Center noted in the story:

The loss of coverage, Ward said, forces people to wait until they are sick, when they need a maximum level of care and obtain it in the most expensive setting. Then their costs get shifted to people with insurance and government programs, said Ward, who is an advocate for government programs to provide insurance for people who can’t afford coverage. 

adultBasic: A Year of Struggle for Many Working Pennsylvanians

A blog post by Chris Lilienthal, originally published at Third and State.

One year after Pennsylvania’s adultBasic program came to an end, many working Pennsylvanians are still struggling with the lose of this critical lifeline. Anxiety and financial pressures are common, and many are allowing chronic health conditions to go untreated.

That was the message delivered by health care providers, advocates and former adultBasic enrollees during a media conference call hosted by the Pennsylvania Health Access Network (PHAN) Wednesday.

adultBasic was created more than a decade ago to provide affordable health coverage to low-income working Pennsylvanians who either lacked job-based coverage or were denied outright because of pre-existing health conditions.

But when a funding agreement between the commonwealth and Pennsylvania’s four Blue Cross/Blue Shield plans expired, Governor Corbett opted to end the program rather than renegotiate the agreement. The adultBasic program shut down one year ago today.

Rick Mossinghoff, a part-time worker from Robinson Township, Allegheny County, was one of the Pennsylvanians who suddenly found himself without health coverage. He opted to enroll in Special Care – a plan for low-income people offered by the Blues and touted by the Corbett administration as an alternative. His new premiums were five times the cost of adultBasic.

“When I had adultBasic, I was able to have physical therapy to combat the arthritic degeneration in my hip,” Mossinghoff said during the conference call. “That all ended, when I lost my coverage – because Special Care doesn’t cover any rehabilitative or physical therapy care.”

He later added: “Special Care has been a nightmare for me. We are limited to just four doctor visits a year. Here we are, barely into the new year, and I’ve used up four of my visits trying to get my hip straightened out. My doctors told me that if I didn’t have physical therapy, I’d walk with a limp the rest of my life.”

Mossinghoff ended up shopping around for physical therapy, took the lowest bidder and is paying out of pocket.

And he’s probably doing better than many other former adultBasic enrollees. As the Pennsylvania Budget and Policy Center showed in a fall report, fewer than 40% of those who lost adultBasic coverage enrolled in Special Care or the state’s Medical Assistance Program. The other 60% have simply fallen through the cracks.

The Blues’ plans, meanwhile, continued to do quite well despite the recession. Reports show the plans had a combined surplus of $6.4 billion in 2010.

The only light at the end of the tunnel for those who lost adultBasic is the Affordable Care Act, which calls for new insurance marketplaces to buy affordable health coverage to be up and running by 2014. Only then will Pennsylvania families be able to access the kind of choices and security that are lacking in our current health insurance market.

Six Months after the End of adultBasic

A blog post by Sharon Ward, originally published at Third and State.

It has already been six months since Pennsylvania pulled the plug on the adultBasic health insurance program for 37,588 people. The Pennsylvania Budget and Policy Center recently took a look at what happened to the Pennsylvanians who lost their adultBasic coverage on the first of March. While some found health insurance elsewhere, many have simply fallen through the cracks.

In all, fewer than 40% of former adultBasic enrollees have enrolled in Medical Assistance or Special Care, a low-cost, limited benefit product offered by Pennsylvania’s Blue Cross/Blue Shield plans. These were the two options most touted as alternatives for adultBasic enrollees.

According to data provided by the Pennsylvania Departments of Public Welfare and Insurance, only 12,814 former enrollees signed on to the Blues’ Special Care – about 34% of those enrolled in adultBasic when it ended. Special Care came at a cost four times more expensive than adultBasic, and with limits on medical coverage including a four-doctor-visits-per-year cap that may have kept it out of reach for most adultBasic enrollees.

Only 1,513 qualified for health coverage under Medical Assistance – 4% of those enrolled in adultBasic when it ended. AdultBasic was designed to provide health coverage to working adults who didn’t qualify for Medical Assistance but weren’t provided job-based health coverage. Still, many adultBasic enrollees might have qualified due to special circumstances: pregnancy, a diagnosis of breast or cervical cancer, or a disability. Despite a thorough review of cases by the Department of Public Welfare, fewer than expected adultBasic recipients are enrolled.

After six months, 62% of adultBasic enrollees, 23,261 individuals, are not enrolled in the two main alternative programs offered by the Pennsylvania Department of Insurance when the program closed.

Leaving people uninsured brings with it significant costs: to the individuals, and to the public who pays for their medical treatment at hospitals and, when the uninsured become the unemployed, for additional social services.

Under the federal Affordable Care Act, many former adultBasic enrollees will have access to insurance that they can afford when competitive insurance marketplaces open in January 2014. But that is a long time to wait for those who have fallen through the cracks.

Not So Special Care

( – promoted by John Morgan)

A blog post from Sharon Ward, originally published on Third and State.

It has been just about six weeks since the adultBasic program came to an end, leaving 42,000 Pennsylvanians without affordable health insurance coverage.  Governor Corbett ended the program, claiming that the state, and the Blues, were too poor to continue funding it.

Never mind that the Governor took $220 million in health care money to create a new business loan fund, or that Highmark just keeps raking in the dough. (More about that later.)

AdultBasic enrollees were encouraged to sign up for Special Care – a Blues product most notable for its winning combination of expensive premiums and lousy coverage – through two letters sent to recipients and in numerous phone calls with the soon-to-be uninsured. Their new friends, the Blues, would be only too happy to accommodate the newly uninsured.

So how’s that working out? Turns out, not so well.

In a press conference with Mayor Michael Nutter and Senators Michael Stack and Larry Farnese, Auditor General Jack Wagner released data on Special Care enrollment. It turns out that only 8,000 of 37,000 adultBasic enrollees (about 21%) have signed up with the Blues.

The enrollment varies widely among the four plans. Highmark, which had the largest adultBasic enrollment, 21,000 individuals, had 19% sign up. Independence Blue Cross’ numbers are abysmal – only 6.7% of the 12,000 eligible individuals have signed up for Special Care.
adultBasic Customers Enrolling in Special Care
Get a PDF of this chart

So what happened to the other 30,000? Some may be eligible for Medical Assistance, and our good friends at Community Legal Services pushed hard to ensure that the Departments of Public Welfare and Insurance took affirmative action to find and enroll them.

But the rest may simply have fallen through the cracks.

On May 3, the window for adultBasic enrollees closes, and the Blues get to reduce income eligibility and reinstate pre-existing condition exclusions. The insurance companies are back in charge.

In Case You Missed It: Third and State Blog for Week of February 21

This week on Third and State,  we blogged about the looming loss of health coverage for nearly 42,000 adultBasic consumers, a misinformation campaign on public- and private-sector pay, the problem with Arkansas’ gas drilling tax, and much more!

In case you missed it:

  • On health care, Chris Lilienthal blogged about the faith community’s call on Governor Corbett to preserve adultBasic health coverage for nearly 42,000 Pennsylvanians. Later in the week, Chris also wrote about a candlelight vigil planned for 5:30 p.m. February 28 outside the Governor’s Mansion to protest the end of adultBasic.
  • On public sector wages, Mark Price urged readers, in light of the battle over collective bargaining rights in Wisconsin, to beware of misinformation campaigns on the differences in public- and private-sector pay.
  • On the natural gas drilling tax, Michael Wood explains why a prominent Arkansas Republican, two-time gubernatorial candidate, and former gas company executive wants to increase his state’s natural gas drilling tax.
  • Finally, on jobs and the economy, Stephen Herzenberg cites New York Times economist David Leonhardt to explain why we need more action to create jobs.

More blog posts next week. Keep us bookmarked and join the conversation!

4,300 Pennsylvanians Tell Tom Corbett to Preserve adultBasic

More than 4,300 Pennsylvanians delivered a message to Governor-elect Tom Corbett on Friday outside his gubernatorial transition office in Harrisburg: Don't let adultBasic die!

That's how many people signed on to a petition delivered to the Corbett Transition Team Friday at 11:30 a.m. calling on him to preserve this critical lifeline for so many working Pennsylvanians. At the same, advocates for adultBasic delivered copies of the petition to the offices of Independence Blue Cross in Philadelphia and Highmark in Pittsburgh.

This week, Corbett's transition team voiced support for a plan to resolve a funding shortfall by ending adultBasic on Feb. 28 and, with it, affordable health insurance for  thousands of working Pennsylvanians.

For the past six years, the state’s Blue Cross plans have contributed  funding toward adultBasic as part of their charitable mission, but that  funding agreement has ended. Still, the nonprofit Blues are sitting on  ample surpluses. From 2002 to 2009, the cumulative surpluses of the four Blues plans increased from $3.5 billion to $5.6 billion.

Noting this, PHAN regional director Antoinette Kraus said the Blues could fully fund adultBasic using less than 3% of their combined surpluses – fulfilling their charitable mission.

Under the Corbett transition plan, those who lose their insurance  would be given the option of enrolling in “Special Care,” a more expensive health plan  with more limited benefits operated by the state's Blue Cross plans. Premiums, however, are as much as 400% higher than adultBasic premiums,  while benefits are much more limited. For instance, Special Care only  covers catastrophic hospital care, provides limited coverage for  outpatient care and limits patients to four doctor visits per year.

At the Harrisburg petition rally, a group of about  25 advocates – bearing signs that read “If adultBasic dies, more Pennsylvanians will  die,” and “We can't afford another 46,000 uninsured!” – addressed the importance of this critical program.

Gayle Anzolut, a waitress and  adultBasic participant for about eight years. was one of those who gathered outside the office. She told the Pittsburgh Tribune-Review that she really can't afford Special Care but will have to find a way. “I don't even earn minimum wage,” said Anzolut, who makes her money from tips. “You got to have (insurance).”

Fighting to Preserve Health Insurance for 43,000 Pennsylvanians

For several months, we have been telling Pennsylvanians about the crisis facing the state's adultBasic health insurance program — but nothing we have said so far holds a candle to Roseann Davis’ story.

Roseann DavisRoseann, like tens of thousands of other working Pennsylvanians, earns too much to qualify for Medicaid but not enough to afford private health insurance. So for the past six years, she has relied on the state's adultBasic program, a no-frills, low-cost insurance plan.

That program could end as early as February if Governor-elect Tom Corbett and the incoming Legislature don't take swift action to shore up funding for it early in 2011.

Roseann, a Bucks County mother of two suffers from a number of chronic conditions, including Crohn's disease, for which treatment costs $123,000 per year. Roseann is finding it difficult to concentrate on the holidays as she worries about what will happen if she loses her adultBasic coverage early next year.

At one point in a recent interview with CBS 3 in Philadelphia, Roseann shares a heartbreaking letter she sent to state lawmakers asking them to preserve adultBasic. In it, she writes: “I will not let my family suffer with expenses cause of this, cause of me. So yes, I would rather die than let them have all my bills.”

So why is adultBasic running out of money? Agreements between the Commonwealth and Pennsylvania's four nonprofit Blue Cross/Blue Shield plans to provide critical funding to adultBasic are expiring this month. The Blues agreed to make those contributions beginning in 2005 after public outcry over their growing surpluses. Meanwhile, the Blues’ surpluses have grown from $3.5 billion in 2002 to $5.6 billion in 2009, despite their contributions to adultBasic from 2005 onward.

Earlier this year, the Blues agreed to continue funding adultBasic through June 2011, but  their actual contributions have fallen short. That could spell the end of adultBasic as early as February.

More than 200 Pennsylvania organizations and residents sent a letter to the Governor-elect and his transition team earlier this month urging them to bring the Blues to the table and come up with a solution that preserves health coverage for the 43,000 Pennsylvanians, like Roseann, enrolled in adultBasic.

CBS 3 is just one of more than a dozen news reports and editorials over the past month on adultBasic and what it means to 43,000 Pennsylvanians enrolled in the program. Check out the coverage here.

Then add your name to the growing list of Pennsylvanians urging policymakers to preserve adultBasic.

Finally, if you are on adultBasic and worried about losing your health insurance, let us know. Sharing your story is one of the most powerful things you can do to help our fight!

Campaign to Prevent 45,000 Pennsylvanians from Losing Health Insurance Gains Support

Strong calls for preserving adultBasic have followed last week's release of a report from the Pennsylvania Budget and Policy Center and Pennsylvania Health Access Network examining a funding crisis facing the program. At the heart of the crisis is the December expiration of an agreement with the state's four Blue Cross/Blue Shield plans to help fund adultBasic.

This week, three of the state's largest newspapers joined the call for funding adultBasic through 2014. Here's what they had to say:

The Pittsburgh Post-Gazette, August 1, 2010

Covering the basics: The Blues can afford a three-year extension

A  patient with a broken leg may be satisfied to walk with the help of a  cast and a cane for a few months, but the goal of his medical treatment  is a leg that's healed and healthy for the long term.
Likewise, the state's adultBasic health insurance program needs more than a short-term fix.

The Scranton Times-Tribune, August 2, 2010

Sustain fund for basic care
Despite  the payments since 2005, the Blues continue to hold substantial  surpluses … [and] continue to have an obligation, under their tax  exemptions, to contribute to charitable health care enterprises, even  though they all also operate for-profit, taxable subsidiaries.

The Philadelphia Inquirer, August 3, 2010

Right note for the Blues

A three-year extension of the Blues funding agreement is the only realistic option at this point.

There also has been extensive media coverage of the adultBasic funding crisis, the adultBasic report and a statewide day of action organized by the Pennsylvania Health Access Network  to preserve adultBasic. Check out all the media coverage here.

AdultBasic Sings the Blues

( – promoted by John Morgan)

Last week, advocates across Pennsylvania called on state lawmakers to preserve the adultBasic health insurance program.

AdultBasic provides affordable, no frills health coverage to adults earning up to 200% of the Federal Poverty Level. Before last week's statewide Day of Action, organized by the  Pennsylvania Health Access Network (PHAN), few people were aware that  the program is in jeopardy.

But it is, as PHAN and the Pennsylvania Budget and Policy Center documented in a new report – AdultBasic Sings the Blues – that was rolled out in conjunction with the adultBasic Day of Action.

At the heart of the funding crisis is the December expiration of an agreement under which the state's four Blue Cross/Blue Shield plans have contributed funding toward adultBasic since 2005. In recent months, the Blues have refused to renegotiate the Community Health Reinvestment (CHR) Agreement, even though they are sitting on surpluses that are more than $1 billion larger now than when the agreement was signed five years ago.

If no new agreement is reached – or new funding found – adultBasic health coverage will essentially disappear for nearly 46,000 Pennsylvanians at year's end.

The report calls on the Blues to continue funding adultBasic as part of their social mission until 2014 when the U.S. health reform law will be fully implemented. It also urges the General Assembly to put the CHR Agreement into law and asks the Pennsylvania Insurance Department to revisit its standards for evaluating the Blues' surpluses.

In response to last week's report, the Blues publicized their offer to state officials to continue funding adultBasic through June 2011 – a six-month extension on the Community Health Reinvestment Agreement. Such an arrangement, however, would require a freeze on new enrollees, reducing adultBasic enrollment from about 46,000 to 37,000 in June 2011. This will only add to the already overstretched waiting list, which stood at 397,671 in June and has grown by more than 300% since the start of the recession in December 2007.

Some might ask, can the Blues afford to continue funding adultBasic? The answer is a resounding yes.

Between 2002 and 2009, the four companies’ cumulative surpluses went from $3.5 billion to $5.6 billion, an increase of 61.4%. These surpluses grew two-and-a-half times faster than Pennsylvania wages – despite the Blues' contributions to adultBasic and the impact of the worst recession in a generation.

Check out our report on adultBasic today!

We also need your help to send a message of support for preserving adultBasic as a critical health care option for working Pennsylvanians without insurance. Take action today by signing an online petition or submitting a letter to the editor in support of adultBasic.