Governor Edward G. Rendell’s proposed 2010-11 budget maintains essential health care and other safety net services during the economic recovery by better managing programs, attacking waste and reducing unnecessary spending.

“The ongoing national recession means more people are out of work and need our help,” said Governor Rendell. “Others may have kept their jobs, but lost their health insurance due to employer cutbacks. Either way, we need to do all we can so that children and adults have access to the health care services they need.”

Too many children cannot get health care today because their parents have lost their health insurance. The economic downturn has made Pennsylvania’s Children’s Health Insurance Program, or CHIP, more important than ever, and the Governor’s plan ensures that 10,300 more children will be able to receive care through CHIP.

The CHIP program provides comprehensive, free and low-cost health care to uninsured children whose parents earn up to 300 percent of poverty. Three years ago, Pennsylvania launched Cover All Kids to expand the CHIP program. Today, families earning above the program’s income limits can enroll their children by paying the full cost of coverage.

The Governor’s budget also maintains its commitment to the adultBasic program by continuing to insure 50,000 adults in 2010-11. The waiting list for adultBasic insurance has tripled in size over the past two years and now totals more than 380,000 people. The future of this critical lifeline depends on securing an agreement that continues to generate funds from nonprofit insurance companies, similar to the existing Community Health Reinvestment agreement that expires in December 2010.

The adultBasic insurance program provides basic care to working, uninsured adults earning up to 200 percent of poverty.

The Rendell administration has also made major progress rebalancing and restructuring the long-term living system to ensure that older Pennsylvanians can age in place at home with dignity and a high quality of care. The 2010-11 budget continues Governor Rendell’s demonstrated commitment to older Pennsylvanians and persons with disabilities by including a $17.3 million increase for direct services to them. Over the last eight years, funding for aging and long-term living services has grown by $1 billion, a 307-percent increase.

The Governor’s budget proposes balanced investments in both nursing homes and home- and community-based services. Nursing homes will be eligible for $24 million more to support the increased needs of a more complex nursing home population. In addition, nearly 1,700 additional older adults and 1,525 additional persons with disabilities will be able to receive home- and community-based services so that they can live more independently. Finally, 4,000 additional older Pennsylvanians will be able to get their prescription drugs through the PACE and PACENET programs.

The gains for older Pennsylvanians and persons with disabilities would not have been sustainable without major initiatives to rebalance the long-term living system. The share of consumers served in their home has doubled since 2003. Because home-based services are more cost-effective, scarce public resources can be stretched further.

In 2007, the Governor created the Office of Long Term Living to manage resources more effectively between the departments of Public Welfare and Aging. Governor Rendell is proposing to institutionalize these efficiencies and make possible further savings by establishing the Department of Aging and Long-Term Living as part of this year’s budget.

Improved program management and reducing waste, fraud and abuse are critical to sustaining these investments.

“The national recession has increased the need for critical health care services and we need to eliminate every nickel of waste or unnecessary spending,” said Governor Rendell. “Our success means that our programs will not result in the loss of health care services for those who can least afford it.”

The 2010-11 budget also includes a $388 million increase for the Department of Public Welfare, primarily in Medical Assistance spending. About 80 percent of the increase was driven by rising Cash and Medical Assistance caseloads and federally mandated increases in rates for managed care organizations and Medicare buy-in programs such as Medicare Part D. The Governor’s budget also includes modest increases for neglected and abused children, community mental retardation services and early intervention for special needs children.

Today 2.1 million low-income children and adults receive their health care through Medical Assistance. The ongoing recession means that more people will turn to DPW for help.

Governor Rendell was able to avoid cuts in eligibility and benefits packages in the 2010-11 budget by intensifying efforts to reduce fraud, finding new savings and running programs more efficiently. For example, DPW will realize $217 million in agency-wide efficiencies and another $102.5 million in increased pharmaceutical savings in the coming year. The budget also assumes that the General Assembly will provide DPW with new tools to reduce fraud and abuse by passing the False Claims Act. The False Claims Act will generate at least $4 million in additional recurring savings by creating stronger incentives for individuals to report fraudulent practices.

The health care budget assumes that the federal government will extend the end date for providing enhanced matching federal funds for Medical Assistance. Pennsylvania has received $1.6 billion in enhanced matching funds to date, and the extension for all of 2010-11 would generate an additional $848 million in temporary federal fiscal relief for the commonwealth. Congress is now considering a proposal to extend the enhanced federal match.

The health care budget also assumes that Congress will adopt a plan to allow Medicaid managed care organizations to benefit from higher federal drug rebates.

For more information on Governor Rendell’s 2010-11 executive budget proposal, visit www.budget.state.pa.us.