Several representatives of the health care industry told a Pennsylvania Senate committee that its bill to create a single-payer system in the state does not control costs or guarantee more people get health care.

Speaking at a hearing of the Pennsylvania Senate Banking and Insurance Committee today (Dec. 16), Sam Marshall of the Pennsylvania Federation of Insurance, an industry trade group, said a monopolistic system of health reform sounds better than the reality.

“As imperfect as the private market may be, a government monopoly will be worse at figuring out what health care to cover,” Marshall said.

Marshall and seven other health care industry representatives spoke during the 2 ½ hour Senate hearing, attended by about 170 people, including many supporters of Healthcare for All Pennsylvania, which advocates a single-payer system for the commonwealth.

“A lot of people hear single-payer and hear: ‘Someone else is paying,’” Marshall said. “At some point, people have to be aware of the cost they bear in the system.”

Small business, insurer criticism

Jim Ferlo

Sen. Jim Ferlo, a Democrat representing the Pittsburgh area, introduced Senate Bill 400, which would create a government entity, the Pennsylvania Health Care Agency, to provide health coverage to all state residents, funded by a 3% tax on income and a 10% tax on businesses in the state. The 11-member panel running the agency would be appointed by the governor and other state leaders. Ferlo has introduced the bill in 2005 and 2007 with no success.

Ferlo’s proposal was criticized by the National Federation of Independent Business, which represents about 18,000 small businesses in the state.

“A single-payer health care system fails the small business test and, therefore, fails small business and its workers,” said Kevin Shivers, state director of the association. He said business owners, already struggling with the recession, will be forced to reduce wages or other positions, and cut vacant positions to pay the additional 10% tax a single-payer system would mandate.

Robert E. Baker Jr. senior director of government affairs for Capital BlueCross, one of four Blue Cross licensees in the state, raised questions about the appointed board that would run the single-payer plan.

“The 11-member board would be politically appointed and include only three health care professionals: one physician, one nurse and one pharmacist,” Baker said. He also noted that the four Blue Cross companies – Capital Blue Cross, Highmark, Independence Blue Cross and Blue Cross of Northeastern Pennsylvania – are each nonprofit companies, not for-profit insurers.

Sen. Don White (R-Indiana), chairman of the committee, said the appointed aspect of the board concerned him.

Taking the first step

Before testimony began, White said the “information hearing” was designed to explore Ferlo’s bill and other reform measures, but most of the discussion focused on the single-payer proposal.

Chuck Pennacchio, head of the Healthcare for All Pennsylvania, a group with about 10,000 members, called on the state legislature to lead national reform efforts by passing the bill. No state has approved a single-payer system, and Pennacchio said Pennsylvania is uniquely poised to complete the reform because Gov. Ed Rendell has voiced support for the measure and 68% of state residents in a 2008 poll favored the approach.

“This is not only the first significant step in an evidence-based process designed not only to cure Pennsylvania’s health care system, but also to inspire the adoption, across each of America’s individual states, the only proven, uniquely American, centrist health care reform,” he said, generating applause from supporters.

Pennacchio said the state could save about $50 billion on its health care spending of $101 billion, with $35 billion being reinvested in health care. He said additional savings would come on auto insurance and property taxes, the latter as state school workers’ health care costs, about 20% of the total budget, would be reduced under the system.