Pennsylvania sued for axing low-income health plan

NEW YORK Wed Mar 16, 2011 7:50pm IST

Related Topics

NEW YORK (Reuters) - Pennsylvania's governor and other state politicians have been sued in a class action suit after 41,000 residents lost health coverage following the state's axing of an insurance program for low-income workers.

The suit, filed in a state court by three of the affected residents, said freshman Governor Tom Corbett wrongly redirected Pennsylvania's share of the money from a master settlement agreement between cigarette makers and states away from the health plan.

As a result, the health plan, adultBasic Insurance, closed because no other funding provision was made. This left the people who were enrolled in the lurch along with 500,000 other individuals who were waiting to be covered, according to the law suit, which was filed on Thursday in Commonwealth Court.

The over $200 billion settlement between cigarette-makers and states aimed to compensate taxpayers for the soaring healthcare costs of treating ailing smokers.

The lawsuit said that a Pennsylvania statute enacted a year after the 2000 national settlement required that "the tobacco monies would be used to make Pennsylvanians healthier and to fund the health of future generations of Pennsylvanians."

Some 30 percent of the tobacco money was set aside for the adultBasic Insurance program and the Medicaid program for disabled workers, according to the lawsuit, which seeks class action status.

The governor's office in a statement said: "The lawsuit is without merit and will be successfully defended in court."

The statement added: "The fiscal reality is that adultBasic is not a financially sustainable program."

The lawsuit seeks an injunction that would require the Pennsylvania Treasury to hang onto the tobacco funding until the case is decided on its merits.

Many states are struggling to erase budget deficits spawned by the recession and a number of governors have proposed deep cuts in health plans, especially Medicaid, which funds healthcare for the poor, elderly and disabled.

With state unemployment rates still fairly high, demand for public health plans has risen - just as the federal stimulus program winds down, taking away the extra Medicaid payments the states were temporarily given.

Corbett's office had no immediate comment on a story published Tuesday by the Post-Gazette that said the governor wanted to use $220 million of the $2 billion a year the state gets from the tobacco money for economic development.

FILED UNDER:
Photo

After wave of QE, onus shifts to leaders to boost economy

DAVOS, Switzerland - Central banks have done their best to rescue the world economy by printing money and politicians must now act fast to enact structural reforms and pro-investment policies to boost growth, central bankers said on Saturday.

Ebola Outbreak

Reuters Showcase

RK Laxman Dead

RK Laxman Dead

'Common Man' cartoonist RK Laxman dead at 93  Full Article 

Nuclear Group

Nuclear Group

China urges India to take steps to satisfy standards of NSG  Full Article 

India’s Male Tenor

India’s Male Tenor

India’s lone male tenor wants to ‘Indianise’ opera  Full Article 

Facebook Outage

Facebook Outage

Hacker group claims it is behind outages at Facebook, other sites  Full Article 

U.S. Blizzard

U.S. Blizzard

`Life-threatening' blizzard shuts down much of U.S. Northeast  Full Article 

Australian Open

Australian Open

Berdych ends Nadal tyranny on day of shocks  Full Article 

Fashionable Modi

Fashionable Modi

When Modi met Obama, his name was all over - his suit  Full Article 

Photo

Auschwitz Anniversary

Last survivors recall Auschwitz, ask if lessons learned  Full Article | Related Story 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage