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Health Reform Implementation: Governor Rendell’s View



May 14th, 2010

By mid-fall, Pennsylvania should start receiving funds earmarked for state high-risk pools under the recently passed health reform legislation, the Patient Protection and Affordable Care Act (PPACA). The money will allow the state to serve some of the estimated 140,000 Pennsylvanians who qualify as high risks, Keystone State Governor Edward Rendell said at a Health Affairs newsmaker briefing on Thursday May 13. Audio from the briefing is available on the Health Affairs Web site.

That’s the good news, Rendell noted. The bad news is that the federal money will enable the state to cover less than a tenth — about 12,000 — of those eligible. Rendell said he told Health and Human Services Secretary Kathleen Sebelius that the $5 billion authorized for the high-risk pools by PPACA was not sufficient, and he expressed the hope that Congress would increase the amount available. The high-risk pools are meant to be a stop-gap measure until new health insurance exchanges start up in 2014, but Richard Foster, the Chief Actuary at the Centers for Medicare and Medicaid Services, recently projected that money for the pools would run out next year or in 2012.

Eighteen states have chosen not to run their own high-risk pools, leaving the job to the federal government. Rendell said he expected a number of states to similarly defer to the federal government when it came to running the new exchanges and performing other functions under PPACA.  “There is a great belief in modern state government that the way to stay in power is to do no error. Not necessarily do anything good, but do no error. If you defer, and let the federal government run the exchange,” all the “vehemence and vitriol” emerging from the inevitable start-up problems “will be targeted at the federal government, not the state government.” Rendell’s second gubernatorial term ends next year, and he is prevented by term limits from running again, but he said that if he could continue as governor Pennsylvania would certainly run its own exchange “because it’s better for the citizens, it’s better to have control.”

Other briefing highlights:

*** Extending The Enhanced Federal Medicaid Matching Rate. It is crucial for states that Congress extend the enhanced rate at which it currently matches state Medicaid expenses, Rendell stressed. In economic stimulus legislation passed in 2009, Congress increased the match rate – known as the Federal Medical Assistance Percentage, or FMAP – for all states, and gave states with high unemployment numbers an additional boost. However, these provisions expire at the end of the year. Both the House and the Senate have passed six month extensions of the enhanced FMAP in separate bills, but Rendell said governors are “very nervous” that the two chambers will not succeed in combining the extensions into a single measure and passing legislation.

Rendell said he had written to the Congressional leadership emphasizing how “desparately important to states” action on this issue is. He noted that virtually all governors had likewise urged the President and Congress to act. If an extension of the enhanced FMAP does not pass, it would be a “wrecker” for the “already bad budgets” that states are faced with, the governor said.

*** A Good Bill With Too Little Cost Control. Rendell called the health reform legislation, the Patient Protection and Affordable Care Act, a “good bill,” but “not a great bill” because it failed to include enough cost control. “Unless we control costs, this will all fall under its own weight,” he said, but he added: “The good news is that there are relatively easy ways to control costs.” Moreover, in health care, “the very things that are crucial to containing costs also improve the quality of the care.” He detailed several steps that Pennsylvania has taken to control costs and improve quality, including not paying for medical errors; decreasing the number of hospital-acquired infections by requiring hospitals to report the rate of such infections and penalizing hospitals that do not make progress in limiting them; fostering the development of “medical homes” in practices across the state; and expanding the scope of practice of nonphysician medical providers, thus promoting the growth of after-hours clinics staffed by nurse practitioners and other providers and thereby cutting the number of unnecessary emergency department visits by people unable to access their physicians on nights and weekends.

*** The Rubicon Has Been Crossed. Rendell noted that the Pennsylvania Attorney General, one of the major Republican candidates to succeed him as governor, had signed on to a lawsuit to void PPACA’s requirement that people obtain health coverage or pay a penalty. “I hope that lawsuit gets disposed of quickly. Otherwise, it could be an excuse for not moving to implement the act. I hope the federal courts move fairly decisively,” he said. He dismissed the possibility that Congress could repeal PPACA: “Once you cross the Rubicon … there’s no going back. How would you like to be the politician who votes to take health care away from 1.2 million Pennsylvanians. Not going to happen.”

Rendell said aspects of the law could be modified – and some, such as the cost control provisions, should be modified. “If this doesn’t ratchet costs down enough, I’d like to see us give the states or the federal government the absolute right to set rates,” he said. But he emphasized that surprisingly little had been changed in Medicare and Social Security, despite initial vociferous opposition to both programs from the right. “Go look up what the Republicans said about Social Security and Medicare: ‘Socialism, Communism!’ Same stuff. You could close your eyes and not know what year you’re in,” the governor observed. Yet “the same people who called [Medicare] some Communist plot five decades ago” were the ones defending the program during the just completed health reform debate.

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