Each state has made an effort to help low income get health care coverage and the result has been a potpourri of hobbled together plans that are mostly struggling to stay financially viable. The situation in Pennsylvania is a good example of the kinds of problems these plans are experiencing.
Pennsylvania has a plan called AdultBasic. This is a health insurance plan funded by for-profit health insurance companies through the end of this year. The health insurance businesses make a charitable donation to a fund and Pennsylvania then covers as many people as possible that meet the income requirement. To be eligible, income must be less than twice the federal poverty rate or $21,672.

There is not enough money in the AdultBasic plan to cover all eligible people so the state has a waiting list. The people on the waiting list can buy insurance through the state until their name comes up for AdultBasic coverage. The monthly health insurance rate was set at $313 a month but now it is almost doubling. The new monthly rate is $600 and that means many people will be forced to drop their health insurance.

The issue confronting Pennsylvania is the same one other states are dealing with. If only people who are sick and need expensive health care are in paying into the fund, there will not be enough money to keep the fund solvent. The only way a health insurance fund can stay in the black is if both healthy and sick consumers are buying insurance.
The low monthly insurance rate of $312 has attracted a number of sick people to the state. This has placed a heavier burden on the health insurance fund and a growing waiting list. State officials are pointing out that the problem in Pennsylvania is a good example of why the health insurance industry needs to be overhauled at the federal level.

Sandy Praeger is the ex-president of the National Association of Insurance Commissioners. She has said many times that the only way a health insurance fund can stay financially sound is if the cost of providing health care services is shared by everyone and not just those needing the services. But this is also a contentious point for many consumers who do not believe they should be forced to buy health insurance.

Some consumer advocates see the increase in insurance rates to $600 as feeding into the hands of the underwriting insurance companies. The current Pennsylvania plan must be funded by legislators beginning in 2011 if it is too continue operating. If the state is unable to fund the plan then thousands would see their health insurance coverage disappear. Doubling the cost of the plan will force many to voluntarily drop their insurance. This will mean a lot fewer people facing loss of insurance at the end of the year and thus reducing the negative publicity that will accompany the end of the private insurance contributions to the plan.

Raising the rates on the people in the waiting list program may not be popular but it is seen as necessary by Pennsylvania.

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