Pa. premium hikes deepen coverage crisis

South Philadelphia resident Kathy Chavis, 63, broke down in tears last month when she opened the letter announcing a 92 percent increase in her health-insurance premiums. The hike amounts to almost half her monthly Social Security income of $1,383.

Chavis is a spunky, outspoken woman who worked her entire adult life, including more than 20 years at Western Union, before she became disabled. She has a life-threatening blocked artery in her kidney and myriad other conditions, including chronic pain, asthma, high blood pressure, and severe depression.

Until recently, Chavis and about 3,000 other low-income Pennsylvanians on the waiting list for adultBasic - a state health-insurance program run by Pennsylvania's four Blue Cross plans - were allowed to buy into the program for about $300 a month. Now they face a near-doubling of their premiums for what was supposed to be an affordable program.

Worse, 45,000 residents who are getting fully subsidized adultBasic coverage - most of them after months on the program's waiting list - may lose their subsidies unless the program is renewed.

A health-insurance premium increase of up to 39 percent announced by a WellPoint Anthem Blue Cross plan in California helped remind the nation of just how sick our health-care system is. The 92 percent hike faced by Chavis has gotten far less attention, but it is much worse.

AdultBasic is bare-bones coverage for people who cannot afford health insurance but who have too much income to qualify for Medicaid. It is not a luxury plan; it does not, for example, cover prescription drugs. But, unlike many private health-insurance plans, it does not exclude participants for preexisting conditions, making it the only insurance program available to many low-income Pennsylvanians.

Established in 2002, the program covers adults ages 19 to 64 with incomes lower than twice the federal poverty level, or $21,672 for a single person, at a cost to participants of about $35 per month. There is so much demand for the program that it has a waiting list of 369,000. Those on the list may opt to buy coverage at full cost, as Chavis did.

For those who have bought in, the stiff hike in premiums is accompanied by a new $1,000 coinsurance requirement, severe limits on hospital stays, and sharp reductions in services such as physical therapy. The Insurance Department approved the premium increase without public input. The result is akin to a natural disaster for low-income Pennsylvanians, many of whom now worry that they will have to forgo necessary medical care.

AdultBasic was a well-received Rendell administration initiative to address the needs of the nearly one million uninsured Pennsylvanians. It started nearly eight years ago, after controversial revelations that the nonprofit Blue Cross plans had billions of dollars in "surplus" funds. In response, the governor negotiated an agreement with the plans whereby they would make a charitable commitment of $900 million over six years, with 60 percent of the money funding adultBasic. The program expires on Dec. 31, near the end of Rendell's term.

With just months left, the program is on life support. The buy-in option has been made unaffordable by the premium hikes. Meanwhile, the Blue Cross plans have refused to voluntarily continue to meet their charitable obligations by funding adultBasic, which means that the 45,000 Pennsylvanians currently receiving subsidized coverage will be cut off if the legislature does not act this year. While the governor's proposed budget assumes that the General Assembly will extend the program, the clock is ticking.

AdultBasic's uncertain future raises a question for all of this year's candidates for governor and the legislature: Do they stand behind Kathy Chavis and others like her? While these residents hope for national health-care reform, they need the state's help now.