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Analysis: Rendell health plan faces big battle
Governor eyes new tax on cigarettes
Thursday, January 17, 2008
By Tom Barnes, Post-Gazette Harrisburg Bureau
HARRISBURG -- The escalating battle over Gov. Ed Rendell's plan to extend health insurance to 767,000 uninsured Pennsylvanians carries political dangers for both Democrats and Republicans in the Legislature.

For Democrats, there is the risk of voting for higher taxes in a year when they're running for re-election. Mr. Rendell's health insurance plan, called Cover All Pennsylvanians, or CAP, would be funded in three ways, and two of them are tax increases.

He wants a 10-cents-a-pack increase in the tax on cigarettes -- for a total tax of $1.45 a pack. That would generate $67 million a year for CAP, he says.

He also wants a first-time sales tax on cigars and smokeless tobacco, which would raise another $50 million a year. He said he was amazed when he learned Pennsylvania is the only state that doesn't tax those tobacco products.

The third part of CAP is to tap $267 million of the nearly $500 million surplus in the Mcare abatement fund. It was enacted in 2003 and gets its money from a 25-cents-a-pack tax on cigarettes. The fund helps doctors in the state pay for their malpractice insurance.

"If the General Assembly can raise the cigarette tax by 25 cents to help the doctors, is it OK to raise it 10 cents a pack to help people who can't afford health insurance? You bet it is," said Mr. Rendell at a health care rally at the Capitol this week.

All three of his fund-raising ideas have been attacked by Republicans.

"We don't want to raise taxes," said Rep. Scott Boyd, R-Lancaster, who has offered a GOP alternative health plan focusing on tax credits for companies that contribute to employee health savings accounts and for people who pursue wellness exercise programs "aimed at a healthy lifestyle" that would thus hold down medical costs.

Mr. Boyd said the Mcare surplus should be left in reserve in case it's needed to pay for verdicts in future medical liability lawsuits.

"Pilfering the money out of the Mcare fund doesn't make sense," he said.

But Republicans also face a political risk by opposing Mr. Rendell's plan to extend health insurance to those without it. They might appear to be unconcerned about low-income people who are either unemployed or underemployed, who have "pre-existing health conditions" such as cancer that prevent them from buying insurance or whose employers were forced to drop their health insurance because of the rising cost of premiums.

At this week's rally, Sen. Vincent Hughes, D-Philadelphia, sharply rebuked opponents of the governor's plan, urging them to come up with their own funding plan if they don't like Mr. Rendell's ideas.

"If you are not part of the solution, you're part of the problem," he said. "The money exists [in the Mcare fund] to deal with this problem. Let's give people a great Valentine's Day gift and enact [the governor's plan] by Feb. 14."

Mr. Boyd is upset that Democrats "imply that Republicans are blocking health care reform. That isn't true. We have a package of proposals that don't rely on tax increases. The taxpayers of Pennsylvania don't have an unlimited source of funds for every program pitched by the governor."

At the Capitol rally, people from around the state said the lack of health insurance is hurting them. Lisa Sportelli-Wright, a single mother from Allentown, teared up as she talked about her autistic son, Ian, and how difficult it is to get him care and medicine without health insurance to pay for it.

Damitia Penny, a mother from Pittsburgh's Hill District who is in a wheelchair because she has ALS, or Lou Gehrig's disease, was there with her daughter and caregiver, Claudia Dykes. Ms. Penny said she has limited insurance but not enough to pay for all 23 of her medications, and Ms. Dykes said she has no health coverage.

Diana and Ron Ames of Erie said they lost their coverage when Ron lost his job last year, and they have $65,000 in bills from her recent broken leg and foot, for which she still needs treatment.

"We need to stop dragging our feet" on the governor's bill, Ms. Ames said. "I challenge our state representatives to pass this bill."

Republicans countered that Democrats control the House, 102-101, and could put Senate Bill 1137, the Cover All Pennsylvanians bill, up for a vote if they wanted to.

"Some Democrats have problems with the governor's plan too," Mr. Boyd said. "I'd like to see how many Democrats are willing to vote for the tax increases a few days before they circulate their re-election petitions in February."

Rep. Michael Sturla, D-Lancaster, a Rendell ally, said House Democrats have several important priorities for January to March, including open records, property tax relief and health insurance. He said he hopes to work out a compromise health care bill, acceptable to all four legislative caucuses, that can be approved within a few weeks.

Bureau Chief Tom Barnes can be reached at tbarnes@post-gazette.com or 1-717-787-4254.
First published on January 17, 2008 at 12:00 am

http://www.post-gazette.com/pg/08017/849883-85.stm