Healthcare policy in Pennsylvania

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Healthcare policy in Pennsylvania

State overview

State population: 12,759,200

Percent uninsured: 10%

Total healthcare spending: $97,413,831,000

Percent of gross state product: 18.1%

Total Medicaid spending: $20,393,353,134

Total Medicare spending: $23,770,900,000

Median annual income: $52,481

Average family premium: $16,019

Average employee contribution: $4,017

Percent of income: 7.7%

State healthcare policy

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Healthcare policy in the U.S. • Medicare • Medicaid • Obamacare overview

Years of data (most recent available as of August 2015): •2013: State population, percent uninsured, median annual income, average family premium, average employee contribution, and percent of income. •2012: Total Medicaid spending. •2009: Total healthcare spending, percent of gross state product, and total Medicare spending.

Healthcare policy in Pennsylvania involves the creation and implementation of laws, rules, and regulations for managing the state's healthcare system. The healthcare system consists of services provided by medical professionals to diagnose, treat, and prevent mental and physical illness and injury. The system also encompasses a wide range of related sectors, such as insurance, pharmaceuticals and health information technology.

According to the National Conference of State Legislatures, the 50 state legislatures collectively "make thousands of health policy decisions each year," not including the decisions made by local governments, which often oversee hospitals, and private bodies, such as insurers. These decisions can include budget appropriations, requirements for doctors obtaining their licenses, which services are covered by insurance, how personal health information is managed, and which immunizations children must receive, among many others.

Healthcare policy affects not only the cost citizens must pay for care, but also their access to care and the quality of care received, which can influence their overall health. A top concern for policymakers is the rising cost of healthcare, which has placed an increasing strain on the disposable income of consumers as well as on state budgets.

Other issues in healthcare policy include

• state Medicaid expansion,
• health information technology and privacy,
• uninsured and underinsured portions of the population,
• a shortage of primary care physicians, and
• mental healthcare access and coverage.

Background

See also: History of healthcare policy in the United States

In the early years of the United States, healthcare was provided by wives and mothers in the home, with occasional home visits by doctors. Medical colleges were established starting in the late 1700s, providing formal scientific training and licensing to physicians. The role of doctors became more authoritative and pronounced with further advancements in science and the growth of cities, which presented health hazards due to overcrowding, poor sanitation and attendant disease.

University of Pennsylvania School of Medicine, the first medical college in the United States

In 1846 a group of physicians formed the American Medical Association (AMA) with the early mission of (and achievement of) state regulation of pharmaceuticals. As medicine grew more professionalized, private health insurance pools were established, and employers and unions began offering some medical benefits to workers. The model of payment known as "fee-for-service," in which doctors are paid for each treatment, test and office visit, emerged.

Though once housing primarily very poor, terminally ill patients, hospitals evolved to more closely resemble the institutions they are today. This was in part due to the development of antiseptics—allowing for more sanitary treatment conditions—and better education of physicians. It was also partly due to their role in the development of employer-sponsored insurance by offering plans for public school teachers, which allowed them to go to hospitals for more routine treatments. The employer-sponsored insurance model spread during World War II, when government wage controls prompted employers to offer health benefits rather than higher salaries in order to attract workers. This model grew more popular after the war when payments by employers toward employee health insurance were made tax-exempt.

Throughout the mid-20th century, Congress established federal agencies dedicated to healthcare policy, including the National Institutes of Health and the Centers for Disease Control, the Food and Drug Administration, and the Department of Health and Human Services. The federal government also enacted a number of pieces of healthcare legislation during the second half of the century:

Butler VA Hospital in Butler, Pennsylvania

• Social Security Amendments of 1965, which established Medicare and Medicaid
• Health Maintenance Organization Act of 1973, which promoted prepaid group practice service plans known as health maintenance organizations (HMOs) as an alternative to fee-for-service plans
• Consolidated Omnibus Budget Reconciliation Act of 1985, which allowed employees to continue healthcare coverage if they would otherwise lose it (due to job loss, medical leave, etc.)
• Health Insurance Portability and Accountability Act of 1996, which limited the extent to which insurance companies could exclude people with preexisting conditions
• Patient Protection and Affordable Care Act of 2010, known as Obamacare, which established health insurance exchanges and required all citizens to obtain health insurance

Though there have been steady calls for a national health insurance program since the early 1900s, no such measure has been adopted in the United States.

Today, the healthcare industry is an immense part of the nation's economy. Healthcare spending amounts to about one-sixth of the nation's gross domestic product and health expenditures account for about one-fourth to one-third of state budgets. Healthcare regulation and policy is complex, with nearly "every aspect of the field ... overseen by one regulatory body or another, and sometimes by several." Such regulations are enforced by federal, state and local governments, and even private organizations. The 2010 passage of Obamacare introduced experimentation and uncertainty into the industry, which will be watched closely over the next several years to gauge the lasting effects of its policies.

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General information

Terms and definitions

Hover over each term to display a definition.

Fee-for-service

Gross domestic product

Gross state product

Managed care

Medical durables

Medical nondurables

National health insurance

Premium

Scheduled drugs

The tables below compare demographic and economic statistics for Pennsylvania and surrounding states, since both factors significantly impact healthcare and healthcare policy. Also provided is general information on the insurance coverage of individuals in each state.

Demographics

See also: State population demographics by age and gender

A major concern for the healthcare industry is the shifting demographic makeup of the nation and its states. Different groups of people—such as men and women, for example—tend to use different health services.In particular, persons aged 65 and older comprise an increasing share of the total population, with that share expected to reach 20.2 percent by 2050. This trend has had a part in the increase in demand for healthcare services and the related increase in costs. It will also influence the federal budget, as more and more seniors join Medicare.

In 2013, the portion of Pennsylvania residents aged 65 and over was higher in the state than the nationwide average. Pennsylvania had the smallest portion of residents aged 18 and under compared to its neighboring states.

Age and gender demographics, 2013
State	Total residents	Children 0-18	Adults 19-64	65+	Male	Female
Pennsylvania	12,759,200	22%	61%	16%	49%	51%
Maryland	5,945,000	24%	61%	15%	49%	51%
New York	19,518,100	23%	62%	15%	48%	52%
Ohio	11,477,300	24%	60%	16%	49%	51%
United States	313,395,400	25%	61%	14%	49%	51%
Source: The Henry J. Kaiser Family Foundation, "State Health Facts"

Economic indicators

See also: Economic indicators by state

Pennsylvania's GDP increased by 1.8 percent in 2014. Click the image to view a larger version.

Broadly defined, a healthy economy is typically one that has a "stable and strong rate of economic growth" (gross state product, in this case) and low unemployment, among many other factors. The economic health of a state can significantly affect its healthcare costs, insurance coverage, access to care, and citizens' physical and mental health. For instance, during economic downturns, employers may reduce insurance coverage for employees, while those who are laid off may lose coverage altogether. Individuals also tend to spend less on non-urgent care or postpone visits to the doctor when times are hard. These changes in turn may affect the decisions made by policymakers as they react to shifts in the industry. Additionally, a person's socioeconomic status has profound effects on their access to care and the quality of care received.

Most Pennsylvania residents earned incomes above 400 percent of the federal poverty level in 2013, with a median annual income of $52,481. The state's unemployment rate was similar to the national rate at 5.7 percent.

Note: Gross state product (GSP) on its own is not necessarily an indicator of economic health; GSP may also be influenced by state population size. Many factors must be looked at together to assess state economic health.

Various economic indicators by state
State	Distribution of population by FPL* (2013)				Median annual income†	Unemployment rate		Total GSP (2013)‡
	Under 100%	100-199%	200-399%	400%+		Sept. 2013	Sept. 2014
Pennsylvania	13%	17%	30%	40%	$52,481	7.3%	5.7%	$644,915
Maryland	10%	16%	28%	46%	$69,518	6.5%	6.3%	$342,382
New York	15%	20%	26%	39%	$51,962	7.5%	6.2%	$1,310,712
Ohio	14%	21%	33%	32%	$46,672	7.4%	5.6%	$565,272
United States	15%	19%	30%	36%	$52,047	7.2%	5.9%	$16,701,415
* Federal Poverty Level. "The U.S. Census Bureau's poverty threshold for a family with two adults and one child was $18,751 in 2013. This is the official measurement of poverty used by the Federal Government." † Median annual household income, 2011-2013. ‡ In millions of current dollars. "Gross State Product is a measurement of a state's output; it is the sum of value added from all industries in the state." Source: The Henry J. Kaiser Family Foundation, "State Health Facts"

Insurance coverage

See also: Health insurance coverage by source

In general, employers have been the dominant source of health insurance for individuals since the late 1940s and 1950s. This can be at least partially attributed to the income tax exemption granted to employers for payments made toward health insurance for employees. The second major sources of health insurance are the state and federal governments, which jointly provide Medicaid for low-income individuals while the federal government sponsors Medicare for the elderly and disabled.

In 2013, over half of Pennsylvania residents were insured through their employers, the largest portion among neighboring states. Pennsylvania had the smallest portion, 13 percent, enrolled in Medicaid, while 17 percent were enrolled in Medicare.

Health insurance coverage by source, 2013
State	Employer	Other private	Medicaid	Medicare	Other public	Uninsured
Pennsylvania	54%	6%	13%	17%	N/A	10%
Maryland	53%	7%	14%	14%	2%	10%
New York	48%	6%	21%	15%	1%	9%
Ohio	47%	6%	15%	17%	2%	13%
United States	48%	6%	16%	15%	2%	13%
Source: The Henry J. Kaiser Family Foundation, "State Health Facts"

The 1980s saw a peak in the percentage of people who were receiving health coverage through their employers, with a continuous decline in the rate thereafter. A study by researchers at the University of Minnesota’s State Health Access Data Assistance Center, which was funded by the Robert Wood Johnson Foundation, found that despite the tax exemption, fewer employers are choosing to offer health coverage to their employees, and when it is offered, fewer employees are enrolling.

In Pennsylvania, the rate of people enrolled in employer-sponsored insurance fell by 11.1 percentage points between 2000 and 2012. Meanwhile, the portion of residents without insurance increased by 4.5 percentage points, the largest percentage point increase compared to neighboring states. Click 'show' on the table below to view more comparisons.

Change in health insurance coverage by source, 2000-2012
State	Change (in percentage points)
	Medicaid enrollment	Employer-sponsored insurance	Medicare enrollment	Uninsured rate
Pennsylvania	4.6	-10.6	1.9	4.5
Maryland	3.3	-10.5	0.4	3.5
New York	10.8	-6.3	1.9	-3.2
Ohio	7.5	-13.6	3.7	2.5
United States	5.8	-10	2.2	2.3
Source: The Pew Charitable Trusts, "State Health Care Spending on Medicaid"

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Spending and costs

See also: Total healthcare spending by state

Healthcare spending and costs have become a top priority for both state and federal legislators amid growing concern from consumers and employers. Healthcare spending as a percentage of the national gross domestic product (GDP) increased from 5 percent in 1960 to reach 17.4 percent in 2009, or over one-sixth of the nation's economy, where it remained steady through 2013. Total healthcare spending in both the public and private sectors amounted to $2.9 trillion in 2013. Federal, state and local governments were responsible for about 43 percent of that spending. Projections have shown that if healthcare spending continues to increase at its current rate, it will reach 19.3 percent of GDP in 2023.

The rise in spending has been attributed partially to increased demand, but in large part to the increased price of delivering and receiving care.

“	Between January 1988 and January 2009, the consumer price index (CPI) rose 82 percent, while the medical component of CPI rose 175 percent.	”
—National Conference of State Legislatures

Such costs mean less disposable income for consumers, greater expenses to hire new employees for employers, and difficulty writing budgets for lawmakers.

In 2009, the most recent year for which state-level data are available, total healthcare spending nationwide was $2.5 trillion. In Pennsylvania, total healthcare spending amounted to $97.4 billion, 18.1 percent of gross state product (GSP), tying with Ohio for the highest portion of GSP spent on healthcare. Total spending came out to about $7,730 per person.

Total healthcare spending*, 2009
State	Total health spending (in millions)	Percent of GSP	Health spending per capita	Avg. annual percent growth†
Pennsylvania	$97,414	18.1%	$7,730	5.7%
Maryland	$42,616	15%	$7,492	6.6%
New York	$162,845	15.2%	$8,341	5.9%
Ohio	$81,598	18.1%	$7,076	5.8%
United States‡	$2,505,800	17.4%	$8,175	6.8%
* "Total Health Spending includes spending for all privately and publicly funded personal health care services and products (hospital care, physician services, nursing home care, prescription drugs, etc.) by state of residence. Hospital spending is included and reflects the total net revenue (gross charges less contractual adjustments, bad debts, and charity care)." † 1991–2009 ‡ Data come directly from the Centers for Medicare and Medicaid Services, "NHE Summary including share of GDP, CY 1960-2013" Source: The Henry J. Kaiser Family Foundation, "State Health Facts"

The bulk of healthcare spending in Pennsylvania was on hospital care, 37 percent. Higher portions were spent on nursing home care and other health, residential and personal care services in Pennsylvania than nationwide figures.

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Government spending

See also: Pennsylvania state budget and finances

Medicaid and Medicare

Medicaid

See also: Medicaid spending in Pennsylvania

During fiscal year 2012, combined federal and state spending for Medicaid, a government health insurance program primarily for low-income and disabled persons, was higher in Pennsylvania than in its neighboring states, with the exception of New York, totaling about $20.4 billion. Spending per enrollee amounted to $8,967, also below only that of New York. Pennsylvania dedicated a larger portion of its 2012 budget to Medicaid than its neighboring states, 33.2 percent. Between 2000 and 2012, Medicaid spending in the state increased by 53 percent, or about 3.6 percent per year.

Medicaid spending, fiscal year 2012
State	Total spending*†	Per enrollee*†	Total growth‡	Compound annual growth rate‡	Federal share*	State share*	Percent of state budget
Pennsylvania	$20,393,353,134	$8,967	53%	3.6%	55%	45%	33.2%
Maryland	$7,686,649,117	$8,361	89%	5.4%	50%	50%	21.5%
New York	$53,305,797,436	$10,031	33%	2.4%	50%	50%	29.4%
Ohio	$16,352,195,540	$7,508	69%	4.4%	64%	36%	24.4%
United States	$415,154,234,831	$6,833	63%	4.1%	57%	43%	N/A
* "Expenditures do not include administrative costs, accounting adjustments, or the U.S. Territories." † Includes both state and federal expenditures. ‡ 2000–2012. Includes payments for services, administrative expenses, and DSH payments.

Acute care services are those that are typically provided within a short time frame, such as inpatient hospital stays, lab tests and prescription drugs. Long-term care services, on the other hand, are those provided over a long period of time, such as home care and mental health treatment. Disproportionate Share Hospital (DSH) payments are funds given to hospitals that tend to serve more low-income and uninsured patients than other hospitals. The largest portion of Medicaid spending in Pennsylvania was on acute care services, a similar portion to that in Ohio. DSH payments accounted for 5.7 percent of spending, while the remaining 35.4 percent was spent on long-term care services.

In 2010, there were 2,417,096 Pennsylvania residents enrolled in Medicaid. The majority of spending, 73 percent, was on the elderly and disabled, who made up 35 percent of Medicaid enrollees. This is typical of most states, since this group of enrollees is "more likely to have complex health care needs that require costly acute and long-term care services," according to the Pew Charitable Trusts. The portion of Medicaid enrollees who are elderly and disabled is a factor taken under significant consideration when state lawmakers make appropriations for the program each year.

Distribution of Medicaid enrollment and payments, 2010
State	Enrollment rates			Payment for services
	Total	Elderly and disabled individuals	Parents and children	Total (in billions)	Elderly and disabled individuals	Parents and children
Pennsylvania	2,417,096	35%	65%	$17.6	73%	27%
Maryland	975,437	23%	77%	$6.9	64%	36%
New York	5,570,094	24%	76%	$49.6	70%	30%
Ohio	2,308,999	25%	75%	$14.5	72%	28%
United States	66,390,642	24%	76%	$369.3	64%	36%
Source: The Pew Charitable Trusts, "State Health Care Spending on Medicaid"

Medicare

Medicare is a federal health insurance program for elderly persons over age 65 and younger individuals with certain disabilities. Medicare accounted for 14 percent of the federal budget in 2013. In 2009, the most recent year for which state spending data is available, total federal Medicare spending for enrollees in Pennsylvania amounted to $23.8 billion. Between 1991 and 2009, the average annual rates of growth in overall spending and per enrollee spending were lower in Pennsylvania compared to neighboring states, 5.8 percent and 5.1 percent respectively.

Medicare spending and growth, 2009
State	Total (in millions)	Average annual growth rate*	Per enrollee	Average annual growth rate*
Pennsylvania	$23,771	5.8%	$10,555	5.1%
Maryland	$8,748	8%	$11,449	6%
New York	$34,081	7.3%	$11,604	6.4%
Ohio	$19,263	7.6%	$10,300	6.5%
United States	$471,260	8.0%	$10,362	6.4%
* 1991–2009 Source: The Henry J. Kaiser Family Foundation, "State Health Facts"

In 2012, there were 2,350,558 individuals in Pennsylvania enrolled in Medicare, or 18.4 percent of the state population. Aged beneficiaries made up 82.1 percent of the total number, while 17.9 percent were disabled.

Medicare beneficiaries, 2012
State	Number	Percent of population	Eligibility category
			Aged	Disabled
Pennsylvania	2,350,558	18.4%	82.1%	17.9%
Maryland	827,426	14.2%	84.3%	15.7%
New York	3,093,591	15.9%	82%	18%
Ohio	1,971,260	17.1%	81.5%	18.5%
United States	49,435,610	16.0%	81.4%	18.6%
Source: The Henry J. Kaiser Family Foundation, "State Health Facts"

Dual eligibility

Some individuals, such as low-income seniors, are eligible for both Medicare and Medicaid; these individuals are known as dual-eligible beneficiaries. For those enrolled in Medicare who are eligible, enrolling in Medicaid may provide some benefits not covered by Medicare, such as stays longer than 100 days at nursing facilities, prescription drugs, eyeglasses, and hearing aids. Medicaid may also be used to help pay for Medicare premiums. Total Medicaid spending for dual eligibles in Pennsylvania amounted to $7.3 million. Most payments were made toward long-term care.

Medicaid spending for dual eligibles by service, fiscal year 2011 (in millions)
State	Medicare premiums	Acute care	Prescribed drugs	Long-term care	Total
Pennsylvania	$550	$836	$41	$5,889	$7,317
Maryland	$186	$471	$14	$1,549	$2,221
New York	$1,278	$4,484	$174	$16,902	$22,838
Ohio	$383	$1,119	$120	$4,779	$6,400
United States	$13,489	$40,190	$1,462	$91,765	$146,906
Source: The Henry J. Kaiser Family Foundation, "State Health Facts"

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Prison healthcare

See also: Prison healthcare

In 1976, the United States Supreme Court ruled that adequate healthcare for prisoners is a constitutional right and that the refusal to provide them with such violates the Eighth Amendment prohibiting cruel and unusual punishment. As such, state budget allocations for correctional facilities, like other healthcare expenditures, have continued to grow, especially as the prison population ages. Correctional healthcare spending nationwide totaled $7.7 billion in 2011, or $6,047 per inmate, which The Pew Charitable Trusts estimated to be about one-fifth of total prison spending. This was up from 2007, but down from a peak in 2009 as the average daily prison population decreased. States have experienced fiscal pressure to manage prison healthcare costs without compromising prisoners' right to quality care.

“	The manner in which states manage prison health care services that meet these legal requirements affects not only inmates' health, but also the public's health and safety and taxpayers' total corrections bill.	”
—The Pew Charitable Trusts

Between 2007 and 2011, total prison healthcare spending in Pennsylvania increased by the highest percentage among its neighboring states, 20 percent. However, the average daily prison population increased by a larger percentage, 30 percent, also the highest percent increase. This may have had a role in a decrease of 8 percent in per inmate spending, which equaled $4,705 in 2011, lowest among Pennsylvania's neighboring states. The portion of inmates aged 55 and over was also highest in Pennsylvania, 8.9 percent.

State spending on prison healthcare
State	Category	2007	2008	2009	2010	2011	Percent change
Pennsylvania	Total spending*	$218,758	$231,421	$241,122	$254,647	$262,024	20%
	Daily prison population	42,998	46,028	50,622	53,416	55,696	30%
	Per inmate spending	$5,088	$5,028	$4,763	$4,767	$4,705	-8%
	Percent of inmates age 55+	7.3%	7.4%	7.7%	8.3%	8.9%	22%
Maryland	Total spending*	$142,071	$121,166	$130,873	$145,852	$147,856	4%
	Daily prison population	22,532	22,943	22,778	21,786	22,155	-2%
	Per inmate spending	$6,305	$5,281	$5,746	$6,695	$6,674	6%
	Percent of inmates age 55+	5%	4.5%	5%	6%	7%	40%
New York	Total spending*	$363,460	$377,928	$386,396	$372,454	$360,567	-1%
	Daily prison population	63,728	63,538	61,457	59,237	57,054	-10%
	Per inmate spending	$5,703	$5,948	$6,287	$6,288	$6,320	11%
	Percent of inmates age 55+	N/A	N/A	N/A	N/A	N/A	N/A
Ohio	Total spending*	$287,087	$281,926	$303,040	$301,032	$279,716	-3%
	Daily prison population	46,187	47,683	48,726	48,796	48,602	5%
	Per inmate spending	$6,216	$5,913	$6,219	$6,169	$5,755	-7%
	Percent of inmates age 55+	5.9%	6.3%	6.5%	6.8%	7.5%	28%
* In thousands. Source: The Pew Charitable Trusts, "State Prison Health Care Spending"

State employees

See also: State employee health plans

State employee health insurance accounts for the second-largest portion of state healthcare spending, behind only Medicaid. The total cost of insurance for state workers was $30.7 billion nationwide in 2013, with $25.1 billion paid for by the states. Premium costs varied widely, with higher premiums found in states such as New Hampshire and Vermont compared to those in states like Arkansas and Mississippi. Part of this variation is due to demographic factors and provider prices, and part may be attributed to differences in health plan "richness," or the cost sharing between the insurer and health plan enrollees, such as deductibles and copayments.

“	State health plans were generally "rich," paying on average 92 percent of the typical enrollees’ health care costs. By way of context, these plans would be designated "platinum" plans within the new health insurance marketplaces.	”
—The Pew Charitable Trusts

Several states are experimenting with various cost-containment methods. "Pooled public employee health benefit programs" are one such strategy, which are mergers between state employee health plans and those of other, smaller public employers, such as city governments and school districts. The idea is to save on administrative costs for insurers and leverage the larger pool to negotiate lower premium rates. Evidence of cost savings is mixed, with the smaller public employers reaping most of the benefits. Programs for pooling public employee health plans have been implemented in 31 states; as of December 2014, Pennsylvania was not one of them.

Pennsylvania is one of 20 states that "self-fund all of their health plan offerings," meaning that rather than purchasing insurance, the state pays health insurance claims with state and employee out-of-pocket insurance contributions while an insurer administers the benefits. As of 2013, there were 24 states offering plans with a $0 deductible; this group of states includes Pennsylvania.

State employee health plan spending data were not available for Pennsylvania

Note: Due to such variations as demographics, plan richness and provider rates, "higher spending is not necessarily an indication of waste, and lower spending is not necessarily a sign of efficiency."

State employee health plan spending (in thousands)
State	Total state expenditures (gross)		Change	Total state expenditures (net)		Change
	2011	2013		2011	2013
Pennsylvania	N/A	N/A	N/A	N/A	N/A	N/A
Maryland	$818,422	$832,815	2%	$664,594	$676,735	2%
New York	$2,646,170	$2,628,715	-1%	$2,208,734	$2,008,619	-9%
Ohio	$552,207	$558,156	1%	$460,642	$470,481	2%
United States	$30,311,259	$30,692,147	1%	$25,263,863	$25,071,413	-1%
Note: "Gross expenditures include employer and employee premium contributions. Net expenditures include only employer premium contributions. All spending figures are in 2013 dollars." Source: The Pew Charitable Trusts, "State Employee Health Plan Spending"

Premium data for state employee health plans in Pennsylvania were not available.

Average state employee health plan monthly premiums, 2013
State	Single			Family			Employer contribution percentage	Employee contribution percentage
	Total premium	Employer contribution	Employee contribution	Total premium	Employer contribution	Employee contribution
Pennsylvania	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A
Maryland	$621	$503	$117	$1,275	$1,037	$239	81%	19%
New York	$610	$506	$104	$1,477	$1,099	$378	76%	24%
Ohio	$478	$406	$72	$1,325	$1,115	$210	84%	16%
United States	$570	$502	$68	$1,233	$1,004	$230	84%	16%
Note: "Due to rounding, the sum of employer and employee contributions may differ from total premium." Source: The Pew Charitable Trusts, "State Employee Health Plan Spending"

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Private insurance

See also: Private health insurance

Premiums

For private insurance, consumers typically either receive coverage through their employer or buy it on their own through the individual market. As healthcare costs have increased, so have insurance premiums. Between 2000 and 2014, insurance premiums for employer-sponsored plans, including state and local government plans, increased 144 percent for single coverage and 161 percent for family coverage. However, the rate of increase has slowed in more recent years. Between 2000 and 2007, premiums grew by 81 percent for single coverage and 88 percent for family coverage. Between 2007 and 2014, the rates of increase were 34.5 percent and 39 percent, respectively.

Employers have reacted to these costs in a number of ways, one of which has been to shift more responsibility for premium contributions to their employees. The portion of premiums paid by employees for single coverage has increased by four percentage points, from 14 percent to 18 percent, since 2000, and by three percentage points, from 26 percent to 29 percent, for family coverage. Average deductibles for employees have also risen, doubling from $584 to $1,135 between 2006 and 2013.

In Pennsylvania's private, employer-based insurance market, average premiums for employer-sponsored coverage amounted to $5,582 for single coverage and $16,019 for family coverage. These figures were nearly equal to national averages. Employees contributed about $1,074 per year for single coverage and $4,017 for family coverage. As shown in the bar chart above, premiums in Pennsylvania's individual market were second highest among neighboring states, averaging at about $243 per month, or $2,916 per year.

Average annual premiums for private employer-based insurance, 2013
State	Single			Family
	Employee contribution	Employer contribution	Total	Employee contribution	Employer contribution	Total
Pennsylvania	$1,074	$4,508	$5,582	$4,017	$12,002	$16,019
Maryland	$1,308	$4,422	$5,730	$4,512	$11,308	$15,820
New York	$1,291	$4,865	$6,156	$4,232	$13,298	$17,530
Ohio	$1,053	$4,626	$5,679	$3,631	$12,324	$15,955
United States	$1,170	$4,401	$5,571	$4,421	$11,608	$16,029
Note: "Figures may not sum exactly due to rounding." Source: The Henry J. Kaiser Family Foundation, "State Health Facts"

In 2013, private sector employers in Pennsylvania contributed on average 80.8 percent to single coverage premiums and 74.9 percent to family coverage premiums. Click on the table below to view further details and state comparisons.

Average annual premiums for private employer-based insurance, 2013 (percents)
State	Single			Family
	Employee contribution	Employer contribution	Total	Employee contribution	Employer contribution	Total
Pennsylvania	19.2%	80.8%	100%	25.1%	74.9%	100%
Maryland	22.8%	77.2%	100%	28.5%	71.5%	100%
New York	21%	79%	100%	24.1%	75.9%	100%
Ohio	18.5%	81.5%	100%	22.8%	77.2%	100%
United States	21%	79%	100%	27.6%	72.4%	100%
Note: Percentages calculated by Ballotpedia. Source: The Henry J. Kaiser Family Foundation, "State Health Facts"

Competitiveness

The Henry J. Kaiser Family Foundation measured the competitiveness of the private health insurance market in 2013, using the Herfindahl-Hirschman Index (HHI) as an indicator. The HHI takes into account how much of a market is controlled by each of the companies competing within it (market share) and is expressed in a value between zero and 10,000. The lower the number, the more competitive the market. The analysis was divided into individual, small group and large group insurance markets. The data also includes information on the market share of the largest insurer in each state, as well as the number of insurers with a market share of greater than five percent.

The individual and small group insurance markets in Pennsylvania were the most competitive among neighboring states, while the large group market was the second most competitive. However, within the state, the large group market was the most competitive, with the largest insurer controlling 33 percent of the market and a total of six insurers that had a market share greater than 5 percent.

Health insurance market competition, 2013
State	Individual			Small group			Large group
	HHI*	Market share of largest insurer	Insurers with >5% market share	HHI*	Market share of largest insurer	Insurers with >5% market share	HHI*	Market share of largest insurer	Insurers with >5% market share
Pennsylvania	2,116	34%	5	2,014	31%	5	1,996	33%	6
Maryland	5,193	70%	3	5,118	68%	3	4,791	67%	4
New York	2,271	33%	4	2,649	47%	5	1,702	23%	4
Ohio	2,623	35%	3	2,468	38%	5	2,293	39%	4
United States	3,888	55%	3	3,841	57%	4	4,038	57%	4
* "The Herfindahl-Hirschman Index (HHI) is a measure of how evenly market share is distributed across insurers in the market. HHI values range from 0 to 10,000, with an HHI closer to zero indicating a more competitive market and closer to 10,000 indicating a less competitive market. An HHI index below 1,000 generally indicates a highly competitive market; an HHI between 1,000 and 1,500 indicates an unconcentrated market; a score between 1,500 and 2,500 indicates moderate concentration; and a value above 2,500 indicates a highly concentrated (uncompetitive) market." Source: The Henry J. Kaiser Family Foundation, "State Health Facts"

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Other sectors

Pharmaceuticals

See also: Prescription drug sales by state

In the United States, there are more than 10,000 FDA-approved medicines available for doctors to prescribe or individuals to purchase over-the-counter. A major target of state healthcare cost-containment efforts is the price of these medicines. Prescription drugs generated a total of $259 billion in sales at retail pharmacies nationwide in 2014. Since generic drugs tend to be significantly less expensive than their brand name equivalents, all states allow pharmacists to dispense generics in place of brand name drugs for prescriptions. This practice is required in 13 states, except when a brand name drug is specifically ordered by a physician; this group of states includes Pennsylvania.

Additionally, state Medicaid programs typically take a number of steps to control spending on pharmaceuticals. Most common are establishing preferred drug lists, which are prescription drugs that are automatically covered by the program, and negotiating rebates with manufacturers for both brand name and generic drugs. Pennsylvania's Medicaid program utilizes both of these strategies, and is also part of a multi-state pool to enhance its buying power.

In 2014, retail sales of prescription drugs at pharmacies in Pennsylvania amounted to $11.5 billion, with about 183.2 million drugs sold. On average, women and individuals over age 65 bought more prescription drugs than men and those under age 65. These totals do not include medications sold over-the-counter.

Prescription drugs filled at retail pharmacies, 2014
State	Total sales for retail Rx drugs	Total number retail Rx drugs	Number per capita by age			Number per capita by gender
			Ages 0-18	Ages 19-64	Ages 65+	Male	Female
Pennsylvania	$11,515,971,765	183,237,833	4.2	13.7	30.1	11.7	16.8
Maryland	$5,127,788,039	61,796,878	3.5	10.4	22.7	8.6	12.2
New York	$20,169,994,895	255,645,810	4.4	12.5	28.9	10.9	15.
Ohio	$10,125,964,465	184,814,413	4.8	16.6	31.3	12.9	18.9
United States	$259,092,876,285	4,002,661,750	4.1	12.6	27.9	10.4	14.9
Note: "These totals include prescriptions filled at pharmacies only and a small portion of over-the-counter medications and repackagers and exclude those filled by mail order." Source: The Henry J. Kaiser Family Foundation, "State Health Facts"

Monitoring programs

States are also focusing on curbing prescription drug abuse and fraud as a method to contain costs.

“	According to the Coalition Against Insurance Fraud, prescription drug misuse, abuse and fraud cost private health insurers almost $25 billion a year.	”
—National Conference of State Legislatures

Between 2004 and 2009, there was a documented increase of 98.4 percent in emergency room visits caused by such abuse and misuse of prescription drugs. As an effort to combat the rise in prescription drug abuse and fraud, all but two states have authorized the development of prescription drug databases that can monitor the dispensing of certain controlled substances. These programs have been bolstered by federal grants encouraging their implementation.

Pennsylvania has an operational prescription drug monitoring program that monitors the dispensing of Schedule II, Schedule III, Schedule IV and Schedule V drugs. Information must be reported every three days by all pharmacies and other entities that are authorized to dispense such drugs. These requirements exclude anesthesia used during surgery, drugs dispensed in prisons, drugs dispensed at licensed health care facilities, drugs directly administered by healthcare professionals, wholesale distributors, and hospice providers. The law requires patients to be notified of the monitoring program.

Right to try

Under the current model, access to experimental drugs by terminally ill patients is controlled by the Food and Drug Administration (FDA), which must give its approval after it receives a form from a patient's physician. What are known as "right to try" laws aim to allow such patients to gain access to experimental drugs without the permission of the FDA. As of March 2016, 27 states in total had adopted right-to-try legislation. At that time, Pennsylvania had considered right-to-try legislation, but no such measure had been passed.

Health information technology

The HHS on the HIPAA Privacy Rule

Health information technology (IT) refers to electronic systems that manage, store and transmit health information, such as patient records. The adoption of modernized health IT has been promoted by the federal government as a way to increase quality while decreasing costs. For instance, the American Recovery and Reinvestment Act of 2009 required most health providers to adopt electronic health records by 2015. However, the digitization of health data raises concerns about the privacy of such data, which could be vulnerable to a breach if not properly secured. Since 1996, health IT privacy and security has been governed by the Health Insurance Portability and Accountability Act (HIPAA), which required and set national standards for the confidentiality of patient information "when it is transferred, received, handled, or shared."

All-payer claims databases are one form of health IT that a growing number of states are implementing to track healthcare costs. All-payer claims databases are state systems for collecting data from public and private health insurance claims on demographics, types of services and total charges. According to the National Conference of State Legislatures, "the U.S. Department of Health and Human Services plans to build a nationwide all-payer claims database consisting of a representative sample of the population." All-payer claims databases exist in 17 states, while another 17 have demonstrated a "strong interest" in creating one. To view the status of such a program in Pennsylvania, click here.

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Studies

Citizen health

Each year, the United Health Foundation releases a report titled "America's Health Rankings," which measures the overall health of the citizens in each state. The United Health Foundation is a nonprofit organization that "provides helpful information to support decisions that lead to better health outcomes and healthier communities." Factors taken into account for the report include the percentage of the state population that smokes tobacco, incidents of infectious diseases such as Salmonella, percent of the population uninsured, the number of primary care physicians, and the rate of infant mortality, among others.

In its 2014 report, Pennsylvania ranked 28th in the nation, up from 29th in 2013 but down from 26th in 2012. Although Pennsylvania has a high rate of drug deaths and high levels of air pollution, the state also has high immunization coverage and smoking has decreased over the past two years.

Compared to neighboring states, Pennsylvania ranked higher than Ohio (40th), but lower than New York (14th) and Maryland (16th). To read the full report, click here.

Recent legislation

The following is a list of recent healthcare policy bills that have been introduced in or passed by the Pennsylvania state legislature. To learn more about each of these bills, click the bill title. This information is provided by BillTrack50 and LegiScan.

Note: Due to the nature of the sorting process used to generate this list, some results may not be relevant to the topic. If no bills are displayed below, then no legislation pertaining to this topic has been introduced in the legislature recently.

Ballot measures

See also: Healthcare on the ballot and List of Pennsylvania ballot measures

Ballotpedia has tracked the following ballot measures relating to healthcare matters in Pennsylvania.

1. Pennsylvania Nursing Home Repairs Bond Measure (May 1974)

Recent news

The link below is to the most recent stories in a Google news search for the terms Pennsylvania healthcare. These results are automatically generated from Google. Ballotpedia does not curate or endorse these articles.

Healthcare policy in Pennsylvania - Google News

See also

• 

  Medicaid spending in Pennsylvania

• 

  Effect of the Affordable Care Act in Pennsylvania

• 

  U.S. Department of Health and Human Services

External links

• Department of Human Services
• The Henry J. Kaiser Family Foundation
• National Conference of State Legislatures, Health
• Health Affairs

Additional reading

• The Henry J. Kaiser Family Foundation, "Health Care Costs: A Primer"
• Deloitte Center for Health Solutions, "Dig deep: Impacts and implications of rising out-of-pocket health care costs"
• The Pew Charitable Trusts, "State Health Care Spending Project Reports"

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