HUGHES OUTLINES PLAN TO EASE MEDICAID CUTS

          HARRISBURG, June 15, 2005 – State Sen. Vincent Hughes (D- Philadelphia) outlined his plan to use a portion of the Health Care Endowment of the National Tobacco Settlement Agreement to minimize the burden of Pennsylvania’s proposed $380 million in Medicaid cuts at a press conference today in Harrisburg.

           “Pennsylvania is facing a crisis,” Hughes said. “The $380 million in proposed Medicaid cuts could quickly become a serious threat to hospitals and patients.

          “Potentially, these cuts could have long-term and lasting impact throughout our already fragile health care delivery system,” Hughes said.

          Hughes is proposing that up to $400 million of the more than $600 million currently in the Endowment be used to minimize the projected cuts to Medicaid funding and services.

          “Using these funds to shield the elderly, disabled and working poor from this impending disaster and to cushion the blow that hospitals, providers and patients will suffer is a legitimate option that should be put on the table for discussion,” Hughes said.

          The National Tobacco Settlement Agreement was reached in 1998 between the leading tobacco companies and a large number of states and resulted in the allocation of $206 billion to be paid out to participating states over 25 years.  Pennsylvania’s share of the settlement was expected to amount to more than $11 billion over those 25 years, with the Commonwealth receiving $400 million a year.  Eight percent of these funds are allocated to the Health Care Endowment to be used for future programs.

          Last week Hughes sent a letter to Gov. Ed Rendell, urging him to consider using a portion of the endowment to minimize the proposed $380 million in Medicaid cuts.

          “It is our duty to ensure that Pennsylvania’s low-income children, single parents, the elderly, disabled and uninsured are provided with basic health care access,” Hughes said. “This includes quality health care and prescription benefits.”

          “By shifting the funds from the Health Care Endowment of the Tobacco Settlement we can avert a real crisis in the short-term while we explore more long lasting policy solutions.”

          The state budget deadline in June 30.