Senator White's Bill Would Extend MCARE By One Year

SB 1137also sets the stage for a phase out of the program

Senator Don White (R-41) is introducing legislation to extend the MCARE program, which provides a financial safety net to help Pennsylvania's health care providers cover their medical malpractice insurance costs.

Senator White, Chairman of the Senate Banking and Insurance Committee, is introducing Senate Bill 1137, legislation extending the authorization of the MCARE (Medical Care Availability and Reduction of Error) program for one year, while preparing for its eventual elimination.

Changes in the marketplace and the success of a reform package passed by the Legislature and enacted by Governor Mark Schweiker in 2002 means Pennsylvania will likely be able to phase out the program in the foreseeable future, according to Senator White.

"As it stands now, MCARE authorization ends at the end of the calendar year. My bill extends the program for one year and assists Pennsylvania with phasing out the plan," Senator White said. MCARE has played a vital role in keeping providers in Pennsylvania, but thanks to the success of the MCARE reforms enacted in 2002, the Commonwealth's role can be reduced and hopefully eliminated in the near future."

The five-year-old program helps physicians pay a portion of their medical malpractice insurance premiums. The fund helps pay toward the cost of the $500,000 in MCARE fund coverage that the state requires each doctor to secure, in addition to the $500,000 in primary coverage from the private marketplace. MCARE assistance is financed primarily by a 25-cent tax on cigarettes and a surcharge on traffic citations.

Senator White's bill allows the state Insurance Commissioner to more gradually shift health care providers from publicly funded to privately-purchased medical malpractice insurance coverage. It would also:

Require the Insurance Commissioner to make an annual determination, no later than July 1, on the capacity of medical malpractice insurance available to providers in the Commonwealth. Under current law, the Commissioner makes a determination bi-annually. An annual determination will allow the Insurance Commissioner greater flexibility in determining the overall availability of private medical liability insurance coverage.
Permit the Insurance Commissioner to increase the threshold of private coverage required to be carried by providers in increments as little as $50,000. Current law requires the commissioner to increase the level of medical liability coverage in increments no less than $250,000.

Funding for the MCARE program is derived from a tax on cigarette sales and from a potion of fines collected for motor vehicle offenses. Currently, the Commonwealth allocates approximately $220 million annually through the MCARE fund to assist doctors, hospitals, nursing homes and other medical providers with the purchase of medical liability coverage.

"Thanks to the improving medical liability market and stabilizing of premiums, due in large measure to the reforms contained in the MCARE Act of 2002, premium costs have been reduced to a level approximately $85 million below the $220 million allocation," Senator White said. "My legislation establishes basic, common sense restrictions on how dollars not needed for the abatement can be used."

Under Senator White's bill, funds not used for premium costs would have to be allocated as follows:

50 percent would be placed in an escrow account to reduce the unfunded liability of the MCARE fund;
25 percent would be used to establish a medical safety automation fund (electronic medical records) for grants to health care providers;
25 percent would be used to support the reduction of health care associated infections.

Contact:

Joe Pittman
(717) 787-8724