Governor Rendell Signs Order Starting to Implement Health Care Reforms

Press Release

Governor Edward G. Rendell today signed an executive order that begins to implement many of the key elements of the federal health care reform act signed recently by President Obama.

"I have been a strong and vocal supporter of the federal health care reform for the simple reason that it will have an enormous positive impact on the lives of every single American. This health care reform package is a terrific step forward for the uninsured, for parents, for children, for businesses -- for anyone who has a stake in the health care system, and that's everyone," Governor Rendell said.

"Importantly, the Commonwealth of Pennsylvania will benefit financially. We have estimated what the reforms will cost and what we will save from them. Over the next eight years, the Commonwealth will save from a low of $280 million to a high of $650 million in direct general and lottery fund payments for health care expenditures," he added.

The Governor said the most immediate task is the creation of a new insurance program to cover adults who have been denied coverage due to their pre-existing condition -- the program in the federal legislation referred to as high-risk pools.

"The federal government allocated $160 million for this insurance program in Pennsylvania and we hope to have a federal application in as soon as possible to help several thousand of these Pennsylvanians finally access reliable affordable health care. We are already discussing our approach with members of the General Assembly, and hope that if any legislation is needed they will make sure it is passed before summer recess so that access to health care for these Pennsylvanians isn't delayed."

To work toward that goal, the Governor's executive order creates two bodies: an internal working group called the Commonwealth Health Care Reform Implementation Committee, and a panel of experts called the Commonwealth Health Care Reform Implementation Advisory Committee.

The internal group will be appointed by the Governor and comprised of health care and related Cabinet-level officials. The panel is charged with five critical tasks:

· Designing the optimal programmatic model for the state's High Risk Pool.
· Designing the optimal organizational model to support a customer-friendly and efficient health benefit exchange.
· Identifying all technology, organization and process improvements necessary to support the implementation of all state obligations under the new law.
· Preparing a strategic plan for the implementation of the new law.
· Identifying legislative action necessary to enable full implementation of the new law and draft legislation for discussion with appropriate members of the legislature.

The external advisory group will consist of insurance industry executives, hospital representatives, medical professionals, large and small purchasers, unions, health and budget policy experts, and consumers. The Governor has invited all four legislative caucuses to name two appointees to this panel. The advisory panel will:

· Provide intensive and ongoing input and advice on each of the five tasks the internal working committee will complete.
· Review and comment on all final work products of the internal working committee.

Governor Rendell noted it is essential for Pennsylvania to begin laying the groundwork for implementation of health care reform, even though he will no longer be in office when the bulk of the changes take effect in 2014.

"It's important that we start working today to apply for the federal health care funds that are available this year, and to craft a strategic plan to ready this state for the enormous expansion in health care access in 2014," he said. "Of course, I won't be Governor in 2014, but I would be irresponsible if I did not kick start our planning and offer the incoming governor a blueprint for implementing the state responsibilities expected by the new federal laws."

Text of the Governor's executive order will be available at www.oa.state.pa.us; click on directives.

Media Contact: Gary Tuma; 717-783-1116

Editor's Note: The summary below explains the anticipated cost-savings.

Federal Health Care Reform will Save Pennsylvanians $280 Million-$650 Million Through 2018

(amounts in millions)

$280 Million Savings (8-year impact)

Cost:
More Pennsylvanians enrolled in state-funded health care programs -- $1,643

Savings:
Shift to home and community-based settings $ -248
Collect higher drug rebates $ -1,045
Less need for state funding for CHIP $ -281
Expansion of Medicare Part D lowers PACE costs $ -353

Total savings over 8 years: $ -283

$650 Million Savings (8-year impact)

Cost:
More Pennsylvanians enrolled in state-funded health care programs -- $1,276

Savings:
Shift to home and community-based settings $ -248
Collect higher drug rebates $ -1,045
Less need for state funding for CHIP $ -281
Expansion of Medicare Part D lowers PACE costs $ -353

Total savings over 8 years: $-651

Source