To help cut costs for Pennsylvanians facing rising costs of health care, Governor Josh Shapiro's 2024-25 budget proposal invests $50 million into the state's reinsurance program to free up dollars to create an additional subsidy for low- and middle-income Pennsylvanians that are on the cusp of being able to afford health insurance. Last week, 55 consumer advocate groups sent a letter in support of the Governor's reinsurance and subsidy wrap affordability plan.

In the letter, the organizations praised the Governor's proposal, saying: "The proposal Governor Shapiro put forward in his budget address responds to the key concerns about previous proposals by leaving reinsurance intact and identifying a funding source for reinsurance while funding the pilot program…We urge the administration and General Assembly to establish this pilot program and fund reinsurance to address the uninsured crisis Pennsylvania faces, keep our communities healthy, ensure our hospitals and healthcare providers are paid, and maximize Pennsylvania's use of available federal funds."

Pennie, Pennsylvania's state-run insurance marketplace, now covers a record breaking 435,000 Pennsylvanians with affordable, high-quality health coverage – which has increased by over 150,000 since Pennie launched in 2020. A Commonwealth subsidy program would provide financial assistance to the most vulnerable Pennsylvanians by cutting the cost of health insurance premiums and ensuring that every Pennsylvanian has access to the health care they need to live healthy and productive lives. The Governor's proposal to strengthen the state's reinsurance program would help most other Pennsylvanians purchasing individual market health insurance by reducing premiums from where they would otherwise be absent the program.  

Governor Shapiro's plan is designed to:

• Reduce the price of health insurance premiums for the almost 500,000 Pennsylvanians that purchase individual market health insurance through Pennie or outside of the Pennie;  
• Provide at least 200,000 Pennsylvanians with enhanced savings, allowing them to keep their current health insurance, or potentially purchase better coverage; 
• Prevent medical debt before it even accumulates for Pennsylvanians, including many in rural communities;   
• Benefit Pennsylvanians through better access to affordable care; and
• Benefit healthcare providers who will see less uncompensated care and may have fewer bills to chase as more Pennsylvanians are insured with better policy benefits. 
• Benefit health insurance companies likely to see higher membership potentially at more robust policies.  

Between reinsurance and a subsidy program, it's estimated that at least 500,000 Pennsylvanians will benefit from enhanced assistance. 

Representative Patty Kim, Chair of the House Insurance Committee, has introduced the Governor's proposal as House Bill 2234Opens In A New Window. Her legislation, if enacted into law, would create the Governor's proposed subsidy program. The bill received a favorable vote from the House Insurance committee this morning.

"This is a great opportunity for the legislature to fund a program to help people purchase health insurance for the first time or buy better health insurance with lower deductibles," said Representative Patty Kim. "I am proud to be the prime sponsor of this legislation and honored to work with the Governor to accomplish this goal."

Read what consumer advocate leaders are saying about Governor Shapiro's plan to create an additional subsidy wrap for low- and middle-income Pennsylvanians below:

Antoinette Kraus, Executive Director of the Pennsylvania Health Access Network (PHAN): "The proposed subsidy wrap program would help hardworking Pennsylvanians by making Pennie plans more affordable. A 2023 PHAN survey showed that 6 in 10 Pennie customers thought their Pennie plan was either "barely affordable" or "unaffordable." This proposal would reduce their monthly costs, allowing them to free up money for other necessities or to purchase a plan with lower deductibles and lower costs when they seek care. It will also help more Pennsylvanians purchase an affordable plan, lowering the number of families who go uninsured because they couldn't afford coverage in the first place. This not only makes financial sense; it keeps Pennsylvanians from avoiding or delaying care, leading to costly and harmful complications that damage their health."

Nicole Stallings, President and CEO of the Hospital and Healthsystem Association of Pennsylvania (HAP): "Accessible health care is a building block to creating a healthier Pennsylvania. We must ensure we do not lose progress in our effort to make coverage available across the commonwealth. This is especially important as thousands of Pennsylvanians transition from Medicaid with the end of pandemic-era continuous enrollment. Pennsylvania's hospitals and health systems are strong proponents of comprehensive coverage and support policy solutions that make care and coverage more affordable and accessible for all Pennsylvanians."

Kristen Rotz, President of the United Way Pennsylvania: "Health insurance is an important safety net to support participation in the workforce, access to healthcare, and financial stability of Pennsylvanians. Incentives like the subsidy-wrap program increase affordability of Pennie plans. This is a good policy tool to encourage more Pennsylvanians who either earn too much to qualify for Medicaid, or don't have access to employer-sponsored health insurance, to secure coverage from Pennie."

Signe Espinoza, Executive Director of Planned Parenthood Pennsylvania Advocates: "Every Pennsylvanian deserves care - that means it must be both accessible and affordable. Planned Parenthood PA Advocates applauds Governor Shapiro's commitment to this issue; since taking office, he has stood firm on our right to health care and we are so happy to see today's announcement of Pennie subsidies."

Rebekah Glick, Pennsylvania State Policy & Advocacy Manager for Susan G. Komen: "Susan G. Komen supports access to affordable, comprehensive health insurance for all Pennsylvanians. Especially those impacted by breast cancer, where lack of insurance often leads to later stage diagnosis and poorer outcomes."

Ernie Davis, Leukemia and Lymphoma Society (LLS) Director of Northeast State Government Affairs: "In today's markets, finding affordable coverage can be challenging. This proposal would provide over 700,000 currently uninsured Pennsylvanians access to quality, affordable coverage, which is especially crucial for blood cancer patients and their families. And, as a bonus, it could potentially lead to better health outcomes and lower healthcare costs. It's a win-win not only for blood cancer patients but for all Pennsylvanians."

Zachary Gates, Senior Director of Government Affairs for the PA Medical Society (PAMed): "The Pennsylvania Medical Society supports any work that addresses uninsured individuals as well as the high cost to be insured. Closing this gap is crucial for promoting equitable healthcare access and ensuring the well-being of all individuals in the Commonwealth. We look forward to seeing how this plan moves forward and how physicians can support a move toward more affordable, equitable care."

Erin Guay, Co-Executive Director of Pennsylvania Health Law Project: "PHLP supports making health insurance more affordable for Pennsylvanians, especially those with limited incomes. We are concerned about the growing number of uninsured people and families who no longer qualify for Medicaid and find Pennie plans unaffordable. Keeping people connected to affordable coverage is critical to making sure they get care to help them stay as healthy as possible."

Alfred J. Carlson, President of Philadelphia Trial Lawyer's Association and Managing Partner at Martin Law: "The fiscal health of the Worker's Compensation Security Fund is strong and substantially more than is required by statute.  A reasonable one-time transfer from this fund would be beneficial in bolstering access to low-cost healthcare for Pennsylvanians, which also includes workers injured on the job across the Commonwealth."

Michael Pearson, President and Chief Executive Officer of the Public Health Management Corporation: "This expansion of Pennie is an invaluable tool in the battle against healthcare inequities, Pennsylvania is one step closer to complete victory. "

For more information on how the Governor's 2024-25 budget proposal would cut healthcare costs, visit shapirobudget.pa.gov.