Rendell playing tough with insurance

HARRISBURG - Gov. Rendell threatened yesterday to withhold state aid to help doctors and other medical professionals pay malpractice insurance unless lawmakers act on his proposal to expand state health insurance.

The governor called on lawmakers to set aside at least part of a projected $500 million surplus in the state's medical-malpractice fund, known as MCare, under the legislation to extend the insurance subsidies for 2008. The aid has been approved on a yearly basis for five years.

"I believe the best and highest use . . . is to link [the surplus] to health care for all Pennsylvanians," Rendell said during a news conference.

Rendell's $317 million initiative to expand subsidized health care to roughly 800,000 uninsured adult Pennsylvanians has been stalled by opposition to a payroll tax he originally proposed to help pay for it. He is hoping to revive that proposal by linking it to the pending medical-malpractice legislation.

An expansion of health insurance would also be financed with federal Medicaid dollars and premiums that would be paid by small businesses and health-plan enrollees. Rendell's proposed payroll tax would be levied on all but the smallest businesses that do not provide health coverage for employees.

MCare is a state-run program that pays medical malpractice awards and settlements above $500,000 and subsidizes the premiums that providers pay for coverage.

State law requires doctors and other health-care providers to carry $1 million in malpractice insurance. MCare covers all or part of the premiums for coverage beyond $500,000. The legislation before the legislature would renew the subsidies that help make it possible for MCare to provide the supplemental coverage at low or no cost.

The surplus in the MCare fund reflects a continuing decline in the amount of malpractice claims. This year's payouts will amount to $191 million, about half of what was paid in 2003, according to the administration.

Doctors who benefit from the program are scheduled to pay $247 million into the fund this year, while $190 million more comes from the state's cigarette tax and $40 million from surcharges paid by motorists cited for moving violations.