Pa. court: Reinstate health-care funding for the poor

Commonwealth Court President Judge Dan Pellegrini. (pacourts.us)
Commonwealth Court President Judge Dan Pellegrini. (pacourts.us)
Posted: March 07, 2013

HARRISBURG - A state judge has ordered the Corbett administration to reinstate funding for programs that provided health insurance to tens of thousands of low-income Pennsylvanians.

In his ruling Tuesday, Commonwealth Court President Judge Dan Pellegrini found that two statutes that stripped money from the adultBasic and Medicaid programs were unconstitutional because they diverted money from the federal tobacco settlement to finance items other than health care in the general budget.

"This is a significant victory for people in Pennsylvania who work hard and play by the rules, but can't afford private insurance," said William R. Caroselli, a lawyer whose firm represented more than 100 former adultBasic recipients in the suit that triggered the ruling.

"AdultBasic was created to help the working poor. It's not a handout, and it presents no cost to the taxpayers. What the administration did was reprehensible, and we are pleased that the Commonwealth Court ordered them to reinstate this important program."

A Corbett administration spokesman declined to comment on the merits of the decision. "We're reviewing the legal and budgetary impact of the ruling," said Nils Frederiksen, spokesman for the governor's Office of General Counsel.

An attorney for House Speaker Sam Smith (R., Jefferson), one of the defendants, used tougher language, saying his client would try to get the ruling overturned. "If the court wants to start appropriating money," said Dave Thomas, "then they should resign from the bench and they should run for the legislature."

AdultBasic was created in 2002 to serve lower-income Pennsylvanians who fell into a gap. They weren't insured by their employers, but they earned too much to qualify for Medicaid, which serves the destitute, and were too young for Medicare, which covers the elderly. AdultBasic, which covered major surgery but not dental costs or prescriptions, was so popular that by late 2010, it covered 42,625 Pennsylvanians - and had a waiting list exceeding 400,000.

The program was expanded by Gov. Ed Rendell, who negotiated voluntary payments from Blue Cross insurers, but its costs spiraled even as those insurers withdrew their support. Corbett scrapped the program soon after taking office in 2011, saying it had become too costly.

Caroselli's firm sued, calling the administration's move a "blatant violation" of the Pennsylvania Tobacco Settlement Act, which directs that money from the 1998 settlement of suits against cigarette makers be "used to make Pennsylvanians healthier and provide for the health of future generations of Pennsylvanians." The act specified that 30 percent of the proceeds would be shared between adultBasic Insurance and Medicaid for workers with disabilities.

The judge's ruling raised new questions for Corbett's administration. It was not immediately clear, for example, whether about 41,000 former adultBasic recipients would regain coverage, whether the old adultBasic program might be resurrected, or what role the federal Affordable Care Act might play.

Pellegrini, a Democrat, directed the Republican administration to set aside 30 percent of the tobacco-settlement fund's proceeds, a portion of which is paid yearly to the state, for "health insurance investment" during the fiscal year that begins July 1. The judge also left open the possibility that the legislature could choose to appropriate the money elsewhere as long as it was spent on health insurance for Pennsylvanians.

The ruling has political implications, as it ratchets up pressure on Corbett to join the governors of other states who have decided to expand Medicaid coverage for the working poor under the Affordable Care Act. Corbett has rejected that option, saying expanded Medicaid coverage would cost the state too much in the long run, but he has left the door open, saying he needed more information from Obama administration officials.

Democrats who have criticized Corbett for not expanding Medicaid celebrated Tuesday's court ruling. State Treasurer Rob McCord, who in his official capacity is a defendant in the suit, called the ruling a "victory for Pennsylvania's working poor."

"I believe that this ruling should force Gov. Corbett and his administration to reconsider their ill-advised decision to refuse federal support for Medicaid expansion," said McCord, one of a number of Democrats considering a run for the party's gubernatorial nomination in 2014.

The decision was welcome news for Sheryl Sears of McKeesport, the lead plaintiff in the case, who was among the people who lost coverage with the dismantling of adultBasic.

"So many people said it would never be done," said Sears, who had been uninsured for a decade while working part-time jobs that did not provide health coverage.

After being given three weeks notice that adultBasic would be terminated, Sears said, she scraped together money from friends and family to pay the monthly premiums for the Corbett administration's alternative health-insurance program - one that cost her $169 a month, five times as much as adultBasic, by her account. She needed coverage for high blood pressure and other conditions.

In December, Sears turned 65 and became eligible for Medicare, but said she had not forgotten others who are struggling to pay for health insurance.

"In my heart, I am so happy for all the people who are in the position I was in," she said. "This is an exciting day."


Contact Amy Worden

at 717-783-2584 or aworden@phillynews.com,

or follow on Twitter @inkyamy.

This article includes information

from the Associated Press.

 

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