Pennsylvania Tobacco Settlement Funds Left Unspent
Pennsylvania's legislative session ended in November without an agreement between Republican leaders and Gov. Tom Ridge (R) on how to spend the state's share of the national tobacco settlement, the Philadelphia Inquirer reports. As a result, $487.9 million -- the first $464.4 million installment payment plus $23.3 million in interest -- sits in the bank, accruing interest at $83,700 a day, and the Inquirer reports that it could be another year before any of it is spent. "The fact that this money that could be helping uncompensated care is sitting there, accruing interest, is shocking," Mary Hurtig, policy director for the Mental Health Association of Southeastern Pennsylvania, said. In January, Ridge offered a proposal called the "Health Investment Plan" that would split the money into several shares: 40% for low-cost insurance for the uninsured; 15% for home care for the elderly; 10% to reimburse hospital care for the uninsured; 15% for health research and investment; 15% for smoking prevention and cessation programs; and 5% for an endowment for future generations. State House GOP leaders, however, want to spend $182 million a year to expand the state's prescription drug benefit for seniors, an issue that figured prominently in the fall campaign and that Republicans credit for helping them win a new majority in the state House. Ridge opposes using the funds on prescription drugs, saying the effort would duplicate anticipated action from the federal government to address that issue. Ridge also says some of the funding should be saved, as payments from the tobacco industry fell $41.8 million short of projections this year due to declining cigarette sales.
Lobbyists from a variety of health care organizations are also "fighting to protect" their interests, the Inquirer reports. Hospitals hope to keep the 10% Ridge has earmarked for indigent care reimbursement, while the Consumer Health Coalition, a group that lobbies for health care organizations across the state, says the 40%, or roughly $195 million a year, earmarked for the uninsured would only cover 100,000 adults, or about 10% of those without health insurance in the state. Other advocates have proposed using the funds to extend CHIP coverage to adults with children, but Ridge rejected that proposal because he did not want to exclude childless adults from any program. Ridge spokesperson Tim Reeves said, "We have to get this money helping people. Another month and more people don't have insurance, young people are starting to smoke and older people are moving into nursing homes" (Worden/Fitzgerald, Philadelphia Inquirer, 12/17).