Healthcare For PA Families

House Republicans unveiled the outlines of a alternative health care reform plan, which they are calling the “Real Prescription for Pennsylvania” (their website name, Healthcare For PA Families, is a better name for marketing).

While the concept of their plan is good – consumer driven reform, giving choice to consumers, freeing the market, reducing the cost of health insurance and care, and avoiding more government programs – the details are limited. Some of their best reform ideas include: Requiring insurers to offer basic health policies (“Allowing” would be a better solution than “requiring” in my view, though I don’t think insurers would choose not to offer a basic plan); liability reform, and supporting Health Savings Accounts.

Only two pieces of legislation currently exist; one reintroduces the Fair Share Act – which would limit the liabilities due in a lawsuit to the percentage of fault of a defendant – which Governor Rendell vetoed last year (after supporting as a candidate in 2002).

The second, HB 121 would offer tax credits to small businesses for contributions to employee’s Health Savings Accounts – the tax credit would be 25% of the contribution to individual HSAs and 50% to family HSAs. While this is a good way to encourage HSA use and decrease the cost of health coverage for employers, I consider it a lower priority. It does little to tranform the system, and insists on employer provided HSAs, which are already tax-free expenditures.

Some additional ways to promote HSA use would be:

  • List Billing – this would allow employers to contribute to their employee’s individually purchased HSA, without having a company plan. This was part of Missouri’s recent health care reform.
  • HSA Charitable Tax Credits – similar in design to the Educational Improvement Tax Credit, this could allow tax-free donations to charities providing partial support for HSAs to low income families.
  • HSAs as a plan option for state workers and legislators, and for Medicaid recipients.