In February 2005, Pennsylvania struck a deal with the state's four Blue Cross Blue Shield plans that is helping to cover uninsured low-income adults in various state health coverage initiatives.[1] The main beneficiary is the adultBasic program, which provides a limited benefit package to uninsured low-income adults (with incomes below 200 percent of the federal poverty level), including those with no dependent children.
In the agreement with Governor Rendell's Office of Health Care Reform, Blue Cross plans pledged to appropriate a certain percentage of their revenue from premiums—representing more than $1 billion over six years—to the Annual Community Health Reinvestment (ACHR) Fund. Sixty percent of this fund will be used to provide insurance coverage through state-approved programs for low-income, uninsured Pennsylvanians. The remainder will be used for other health care services in local communities. In 2005, $85 million were donated to the ACHR fund, enabling 29,000 residents on the adultBasic waiting list to obtain coverage.
Pennsylvania is the first state to arrange such an agreement, securing the revenue voluntarily from the Blue Cross plans through negotiation. Rosemarie Greco, director of the Office of Health Care Reform, explains that the plans had been under public pressure to be more open about how they used excess revenues. "The Blues were receiving scrutiny and criticism for their non–health related contributions, as well as many of their health-related contributions," she says. "The Annual Community Health Reinvestment formula is both transparent and significant."
This deal has greatly benefited the adultBasic program. Since its inception in April 2002, adultBasic has frequently faced a much larger demand for services than it could provide. By February 2003, the first waiting list had been established, and these lists have generally outpaced enrollment by a 2:1 or 3:1 ratio. With new funding from ACHR in 2005, Pennsylvania has been able to offer adultBasic coverage to groups of individuals on the waiting list on three occasions. From December 2004 to March 2006, the adultBasic waiting list declined from 114,572 to 65,036 individuals.[2] In addition, Governor Rendell's proposed budget for 2006–07 will increase spending on adultBasic this year to cover approximately 50,000 people per month, an increase over the current average adultBasic monthly enrollment of 41,570.
References
[1] The four plans are Highmark Blue Cross Blue Shield, Independence Blue Cross, Capital Blue Cross, and Blue Cross of Northeastern Pennsylvania.
[2] Among those offered coverage, some had actually obtained coverage elsewhere, so they could be removed from the list altogether.
