A History of the 2007-2008 Mcare Struggle
The struggle in Harrisburg to extend Mcare abatement for 2008 began in the fall of 2007 and has lasted well into 2008.
Throughout the process, the State Society has been lobbying lawmakers in Harrisburg, working with the governor and his administration, and calling members to action in support of extending Mcare abatement, phasing out the Mcare Fund, and expanding health insurance coverage for the uninsured and underinsured. For a complete review of the Society’s efforts, visit The Mcare Situation: How the State Society Is Working for You.
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What is Mcare? |
Act 44, creating the Mcare abatement program, was passed in December 2003 in response to Pennsylvania’s deepening medical liability insurance crisis. The program provides Mcare surcharge discounts to physicians who agree to remain in active practice in Pennsylvania the year after they receive the discount.
High-risk physicians (neurosurgeons, orthopedic surgeons, general surgeons, ob-gyns, and emergency physicians in trauma centers) are offered 100 percent abatement of their Mcare surcharge, and all other physicians receive 50 percent abatement. |
Senate Bill 1137 passes In October 2007, a bill extending Mcare abatement was introduced and passed by the Senate by a 44-2 vote. The Medical Society supported
Senate Bill 1137, which would have:
- Extended the Mcare abatement through December 2008.
- Required the Insurance Commissioner to annually study insurance market capacity to determine whether to increase the amount of private insurance required under Mcare.
- Permitted the Insurance Commissioner to increase the threshold of required private coverage in increments of $50,000.
- Dedicated any dollars not needed for abatement to: pay down the Mcare Fund’s unfunded liability; fund efforts to reduce hospital-acquired infections; and pay for ePrescribing initiatives
In November, the Pennsylvania House of Representatives Insurance Committee approved a bill that also would have extended abatement through 2008.
House Bill 1973 would have required that providers pay state taxes and participate in a state-sponsored independent drug information service session to be eligible.
However, by mid-December, the House prepared to adjourn without having voted on either bill. The sense of urgency to pass abatement increased, as medical liability bills were slated to go out Jan. 1, 2008.
Governor announces plans
Meanwhile, Gov. Ed Rendell in late November announced his intention to use money paid into the Mcare Fund to fund his Cover All Pennsylvanians (CAP) initiative.
The Medical Society strongly supported Mcare abatement for physicians, as well as the concept of coverage for the uninsured, but was concerned about linking the two issues.
On Dec. 4, 2007, House Democrats introduced an amendment to SB 1137 that would split the Mcare Fund between CAP and payments on Mcare’s unfunded liability. The amended bill was approved by the House Insurance Committee on Dec. 5.
House Bill 489 left sitting The Society also threw its support behind an amendment to an unrelated bill that would have extended Mcare abatement—and removed language rerouting its funds to medical coverage for the uninsured.
House Bill 489 was passed by the Senate on Dec. 11, but the House adjourned the next day without considering it or SB 1137.
Mcare assessments suspended With the General Assembly adjourned for the holidays and Jan. 1 right around the corner, the State Society urged the Insurance Commissioner to suspend collection of Mcare assessments.
Pennsylvania physicians soon received a letter from Gov. Rendell, announcing that, although they would receive medical liability insurance bills without Mcare abatement, their Mcare assessments would not be due until March 31.
The purpose of the delay was to give the General Assembly and the governor time to work out a compromise on Mcare abatement, phase-out funding, and expansion of insurance coverage for the uninsured and underinsured.
SB 1137 reappears On March 17, the Pennsylvania House of Representatives passed a health care reform plan that would extend Mcare abatement, phase out the Mcare Fund, and expand state-subsidized health care through the Pennsylvania Access to Basic Care (PA ABC) plan.
The plan was introduced as an amendment to SB 1137. The amended bill then went back to the Senate for approval.
The Society supported many elements of the plan—including offering health insurance coverage to the uninsured—but had a number of important concerns, including that the bill would:
- Continue to link the Mcare issue and the coverage for uninsured issue
- Deter physician recruitment and retention by mandating physician participation in state-run insurance plans without essential reimbursement and participation information
- Not guarantee a funding stream for abatement
- Not include a provision to stabilize physician’ premiums as primary limits increase during the 10-year Mcare Fund phase-out
As of April, the amended bill is still in committee in the Senate, and physicians’ March 31 deadline to pay Mcare assessments has come and gone.
As the deadline was expiring, the governor sent another letter to providers stating that there would be no extension to the Mcare assessment deadline but ignoring the pitfalls that would have come if SB 1137 had been approved without important revisions.
The Senate is acting deliberately on the Mcare abatement, the Mcare phase-out and health system reform.
Last Updated: 8/13/2008