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Lawmakers Eye Legislation to Deal With Health-Care Costs

Posted on: Monday, 3 January 2005, 03:00 CST

Pennsylvania lawmakers may soon consider adopting a package of "Healthy PA" bills designed to address growing concerns with health- care costs. Bills not approved by the end of the legislative session on Nov. 30 die and must be reintroduced in January.

"I think all of the proposals you are seeing floating out there, particularly those that are a part of the Healthy PA initiative, all are aimed to try to really collectively get at the root cause of rising health care costs," says Brian Kelly, director of Government Affairs with the Pennsylvania Chamber of Business and Industry. "Unfortunately, they all just nip at the edge. To what extent they will have on health care in terms of reducing those costs remains to be seen."

Kelly believes providing consumers control over their own health- care costs through health savings accounts and workplace disease management programs will impact health care.

House Bill 2299, the Health Savings Account Act, would allow funds deposited into such accounts to grow tax-free.

"When I first heard the president talking about health savings accounts, I thought what a great idea, particularly for our younger people starting out," says Rep. John D. Payne, RDauphin, prime sponsor of HB 2299. "It's great for small businesses who can't afford health care.

"It's a chance to do something that in the past they couldn't do because of the high cost of health care, Payne adds.

Payne's motivation stems from growing concerns about affordable health care.

"At the end of the day what's important to me is that we get health savings accounts for Pennsylvanians," says Payne. "This is just one part of the puzzle trying to fix some problems for people who currently don't have health insurance and may be able to afford health insurance through an HSA."

At the beginning of 2004, the federal government authorized federal tax exemptions for money deposited into health savings accounts. HB2299 would allow health savings accounts to grow tax free, but cannot allow exemption from the state's personal income tax due to the Pennsylvania Constitution.

"I think some people might have thought that their contribution could be deducted from federal and from state income taxes and that's not true," says John Zimmerman, executive director Of the House's Republican Policy Committee. "It's a constitutional requirement that each person be treated equally in Pennsylvania. People that don't have these accounts would not have that tax advantage, which is illegal in Pennsylvania."

Another bill in the package, House Bill 2500, would lower costs and improve health care for people with chronic illnesses on medical assistance by adopting disease management programs, a concept growing in popularity throughout the country. Such programs use a pro-active approach such as health coaching and education to promote regular care and treatment in an effort to prevent exacerbation of the condition.

"The genesis of my bill is twofold," says Rep. Matthew E. Baker, R-Bradford/Tioga, prime sponsor of HB2500. "To improve the health of our fee-for-service Medicaid clientele while at the same time saving potentially millions of dollars each year in cost savings."

Baker, who lost a sister to diabetes, hopes Pennsylvania follows 21 other states that have implemented disease management practices in state-run programs for those with chronic illnesses including chronic obstructive heart disease, diabetes and kidney disease.

"It's worth trying to accomplish if we can improve their health, lifestyle and quality of life while at the same time saving Commonwealth dollars," says Baker.

House Bill 2501 attempts to duplicate that concept in the private sector. The bill would provide a tax credit of $100 per employee for employers to provide disease management policies for employees.

"The reason we submitted it was to try to provide some avenues for relief from the ever escalating cost of health insurance," says Rep. Douglas G. Reichley, R-Berks/Lehigh, prime sponsor of HB2501. "By aggressively treating an illness in the earlier stages, you reduce the prospect of costly hospitalization and long-term care toward the end stage of the disease. That means a lower cost to the insurance company which in turn means lower premiums for subscribers."

The bills tie into attempts to reform small group health care, a pressing issue in the Lehigh Valley.

"Obviously, health savings accounts are something business groups are going to be taking a good look at because I really think that's the next wave for health insurance, much like IRAs and 401(k)s were for retirement plans 10 or 15 years ago," says Mike Garza, director of public policy for the Greater Lehigh Valley Chamber of Commerce. "I really think small group health insurance reform is going to be on the forefront of legislative priorities in Pennsylvania. I think it will save costs because you are encouraging people to make healthy lifestyles and make wiser choices with how they would use their health insurance.

Copyright Eastern Pennsylvania Business Journal Nov 15, 2004

Source: Eastern Pennsylvania Business Journal

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