Amid allegations of ‘mishandling,’ suit asks to restore adultBasic

A Pennsylvania lawsuit asks that the governor be forced to reinstate adultBasic after the auditor general said the government used one-third of the money legally designated to health programs for other purposes.

The state’s adultBasic, a health insurance program for about 41,000 low-income adults in Pennsylvania, ended after funding expired Feb. 28. Money for the program came from a combination of tobacco-settlement revenues and donations from the state’s four Blue Cross/Blue Shield plans. AdultBasic would have cost $164 million in this fiscal year, but funding fell about $55 million short, according to state officials.

Tom Corbett

Tom Corbett

The lawsuit, filed last month and now involving 75 former adultBasic enrollees, asks the court to force Gov. Tom Corbett to reinstate the program since the government allegedly diverted some of the funds for other programs.

Corbett, a Republican, has blamed Ed Rendell, a Democrat and his predecessor in the governor’s office, for the shortfall.

The General Assembly has diverted about 30% of received tobacco funds, or about $1.34 billion, to other budget priorities, according to a report recently issued by Auditor General Jack Wagner.

“The mishandling of tobacco settlement funds is yet another example of how the state’s dysfunctional budgetary process is negatively impacting the lives of Pennsylvanians,” Wagner said in a statement. “With the commonwealth still mired in its greatest economic crisis since the Great Depression, now is not the time to reduce or eliminate health coverage for hard-working Pennsylvanians – or for reducing funds to prevent smoking and to help those who want to quit.”

In 1998, Pennsylvania was one of 46 states to settle a lawsuit against tobacco companies to recover the costs of tobacco-related illnesses. The settlement said the state would receive about $10 billion over a 25-year period, or $300 million to $400 million per year.

In 2001, the General Assembly passed legislation specifying that tobacco settlement money fund health-related programs for Pennsylvania citizens.

Pennsylvania has received about $4.5 billion to date and is expected to receive another $5.4 billion or more over the next 15 years, Wagner reported.

Tobacco settlement payments should go to adultBasic until 2014 when federal health care reform begins, according to Wagner, who also said the state should search for additional public and private funds if more are needed.

Other available programs

About one in five of the former adultBasic enrollees remain without insurance coverage, which amounts to about 30,000 people, according to Sen. Jay Costa (D-Allegheny).

Medical Assistance is available to those whose circumstances have changed since enrolling in adultBasic such as turning age 65, becoming disabled or seeing a decrease in income.

Medicare may be available for those who are 65, disabled or meet other eligibility requirements.

SpecialCare health insurance is a subsidized health insurance plan for individuals and families offered by Pennsylvania Blue Cross and Blue Shield. Eligibility requirements are similar to those of adultBasic, although the program differs from adultBasic in the level of benefits and the cost. The Blue plans agreed to waive pre-existing condition exclusions for adultBasic members who enroll directly into SpecialCare by May 2, 2011.

PA Fair Care is Pennsylvania’s health insurance program for uninsured people with pre-existing medical conditions. The federal Patient Protection and Affordable Care Act requires that a person be uninsured for six months and have a pre-existing condition to be eligible.

The state also suggested employer-based coverage, community health centers, financial assistance with hospital bills and other specialized programs such as prescription drug and pregnancy assistance.

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