Opinion Column

The End Of Pennsylvania’s AdultBasic – Not A Sound Investment In The State’s Future

For more than 25 years, Pennsylvania has been the laboratory for innovation in developing pioneering initiatives to provide health care coverage for the uninsured.

In 1985, the keystone state gave birth to the nation’s first private sector initiative for uninsured children from low-income families. Known as the Caring Program for Children, this project became the prototype for the Children’s Health Insurance Program of Pennsylvania, which launched about seven years later and ultimately became a model for the federal Children’s Health Insurance Program.

Meanwhile, Pennsylvania was also a leader in responding to the needs of uninsured adults.

AdultBasic, which was created in 2001, provided health care coverage to adults, ages 19 through 64, with incomes less than 200 percent of the federal poverty level ($21,660 for an individual) who had been uninsured for at least three months before applying and also were ineligible for Medicaid. Additionally, adultBasic was purposely designed without a pre-existing condition exclusion. Outreach efforts targeted a cross-section of the population, including those with chronic diseases and life-threatening conditions.

But this legacy of innovation came crashing down on February 28 when 42,000 adultBasic enrollees lost their health insurance and another 400,000 people on the waiting list lost hope of gaining coverage in the future.

The program’s termination was explained as a “fiscal reality.” A closer examination, though, shows this is not completely true. In fact, the state’s tobacco settlement funds, which initially were promised for purposes just like this program served — purposes that improved the health status of Pennsylvania’s residents — apparently have been skimmed away for other budgetary reasons. This fiscal decision is not a sound investment in the state’s future.

Specifically, the Health Investment Insurance Act, which became law in 2001, identified those tobacco funds — from which Pennsylvania is projected to receive an additional $5.4 billion in payments over the next 15 years — as a dedicated funding stream for adultBasic. In March, Pennsylvania Auditor General Jack Wagner issued a special report that indicated that Gov. Ed Rendell and the Pennsylvania General Assembly “diverted” $1.34 billion, or about 30 percent of the settlement funds received. This diversion included $432 million to the Pennsylvania general fund for unspecified purposes. In addition, Gov. Tom Corbett’s 2011-12 proposed budget would allocate another $220 million from the tobacco settlement funds to state-sponsored job creation assistance. That $220 million is more than enough to fund adultBasic for another year. The program’s cost in 2010 was approximately $160 million.

Meanwhile, even as the decisions were made to take resources away from adultBasic, it was building a record of success. For instance, in its annual reports to the general assembly, the Pennsylvania Insurance Department did not raise concerns regarding the initiative’s ability to accomplish performance measures related to access to care, use of services and effectiveness of care, or to accomplish the purpose for which it was created — providing basic benefits to low-income adults who were ineligible for Medicaid. Adultbasic was making a significant impact in enabling enrollees to get health care services. Adultbasic was not canceled because of a financial constraints or because it was ineffective. It was canceled because of the choices made by two governors and the General Assembly.

In spite of it all, the day of reckoning still arrived for Pennsylvania. This could not be any truer for the 42,000 Pennsylvanians who lost their health care coverage and now will have to choose between rent, groceries and health care. The majority of former adultBasic enrollees — especially those with pre-existing conditions — will not be able to purchase affordable, quality health care coverage. The best option recommended to them costs four times more than they are currently paying and provides lesser coverage. These former adultBasic enrollees who are not only low-income, but also have chronic diseases or life-threatening conditions are at greater risk for financial ruin as well as severe morbidity and mortality. AdultBasic was working and the enrollees lost their coverage because the law was not followed and our state’s leaders made decisions that kicked them off the bottom rung of the ladder.

The impact of these decisions will be far reaching. For instance, Gov. Corbett promised that his budget for the upcoming year will not result in any new taxes. But as a result of the cancellation of adultBasic, a “hidden health care tax” will emerge that people who have insurance will bear.

In other words, the adultBasic program costs may have been removed from the Pennsylvania budget, but the health care costs of its former enrollees as well as those of other uninsured people will be put on the backs of employers and individuals who purchase coverage. Canceling adultBasic is not cost savings, it is simply cost-shifting.

Pennsylvania could have continued to be a pioneer and a model of innovative solutions. But, it has chosen another path — the path of increasing the number of Pennsylvanians without health care coverage, the path of putting more Pennsylvanians at risk for their health and finances, and the path of shifting more of the cost of the uninsured onto the insured while the elected leadership boasts no new taxes. Lesson learned.

Charles LaVallee, in his former roles as vice president of Highmark Blue Cross Blue Shield and executive director of the Caring Foundation, was responsible for the administration of the Children’s Health Insurance Program and adultBasic in 49 counties of Pennsylvania. He currently is director of the Homeless Education Network of the Homeless Children’s Education Fund in Pittsburgh.