Pennsylvania liability fund may be used to cover uninsured

Doctors support increasing access to health insurance but don't want it funded from a state medical liability pool.

By Amy Lynn Sorrel, AMNews staff. Jan. 14, 2008.

Pennsylvania physicians are fighting to stave off Gov. Edward G. Rendell's plan to divert funds from the state's medical liability assistance program to cover the uninsured.

Doctors and other health care professionals contribute annually into the Medical Care Availability and Reduction of Error Fund -- known as Mcare -- set up under a 2002 tort reform package. Physicians are required to have $1 million in liability insurance, but the fund subsidizes half of their premiums and pays claims exceeding $500,000.

In 2003, the governor also established a separate funding pool, financed by cigarette taxes. It helps doctors pay their Mcare assessments and covers the fund's claims payouts. The Legislature has continued this abatement program with the governor's support. The abatement covers 50% to 100% of Mcare fees for doctors, depending on their specialties.

Now, with a downturn in medical liability claims, Rendell says there is a $400 million surplus in the abatement pool. He says the pool's reserves are more than enough to ease doctors' Mcare fees and cover the state's share of claims for at least another year, and -- combined with other tax proposals and Medicaid money -- finance a plan to offer health insurance to nearly 800,000 low-income adults.

The governor has threatened to stop Mcare assistance payments from the pool if legislators don't transfer some of the surplus to his Cover All Pennsylvanians program.

The move mirrors a similar effort by Wisconsin Gov. Jim Doyle. He approved a law that withdraws $200 million from the state patient compensation fund to pay for Medicaid programs. The Wisconsin Medical Society is suing the state to block what it says constitutes an illegal tax on doctors paying into the pool.