History of correspondence between PhilaHealthia
and Pennsylvania Insurance Department (PID).

2005

We began by announcing ourselves to Pennsylvania's Office of Health Care Reform:

11/9/05

Hello Rosemary Greco,

Walter Tsou asked me to contact you about Philadelphia's new health co-op, Philahealthia. http://www.healthdemocracy.org

He thought that our experience could contribute to OHCR's discussion, and we'd be glad to help.

We're promoting the national campaign for single-payer coverage by meeting certain urgent needs of the uninsured.

It's based on the success of the Ithaca Health Alliance, which I started several years ago (featured in Utne Reader 2/05).

Philahealthia has begun to create a member-based minor medical plan increasingly reimbursing common emergencies like broken bones, ambulance rides, emergency stitches, burns, certain minor surgeries, part of ER access.  Ithaca has just started a free clinic, and so will we.

Members pay $100/YEAR (year) per adult or $50/YEAR/child.  This small fee provides significant rudimentary protection within the process we outline at healthdemocracy.org/progress.together.html

The co-op sector is governed by rigorous standards: healthdemocracy.org/legislation.html

The co-op sector can prove the capability of communities and regions to self-insure with least reliance on government or corporate plans.

Yours,

Paul Glover

Dear Mr. Glover

Thanks so much for reaching out.  I have asked Ann Torregrossa, who is the directing our efforts to contact you for a discussion.

Yours,

Rosemary Greco

Since December 2005, PhilaHealthia has sought to meet with PID to reassure them of our capability to serve Pennsylvanians in a genuinely nonprofit manner.

Dear John McGinty and Victor Dicicco,

We welcome conversation with your Department.

We respect your obligation to ensure the integrity of health insurance in Pennsylvania.

We ask your assistance and guidance while we offer relief to Pennsylvania's 900,000 uninsured (including ourselves), to businesses unable to protect employees, and to taxpayers who provide indigent care: Philadelphia's poverty rate is 24.9%.

PhilaHealthia will be guided by standards of transparency more exacting than are current: You can see, for example, all Ithaca's payments to members and all denial of payments. Minutes of board meetings will be posted on the website.

We're aware that we are a type of plan which has not been seen in Pennsylvania for probably 80 years, when fraternal organizations paid most health costs.

We're aware, as you are, that new solutions must be tried. Therefore I've copied this note to Rosemarie Greco, Governor Rendell's Director of Health Care Reform, with whom we've begun conversation.

Incorporation as 501(c)15 or as a hospital plan might apply.

We ask for your creativity, flexibility and humanity in application of relevant law. We'd ask your Department to adopt as regulations for co-op plans the standards referenced above.

In this spirit, the New York State Insurance Department has permitted the Ithaca Health Alliance to continue. When they at first challenged our right to exist (3/04) we prepared to proceed, in self-defense, as a cash-and-carry underground movement.

Therefore we are glad to have received their approval three weeks ago.

Here is the letter to this effect from the Ithaca Health Alliance's treasurer, Thomas Hoebbel.

"I am sending this to everyone who has been involved in the long ordeal with NYSID and the New York State Attorney General's Office.

"The investigation is concluded. We have agreed to a few more minor changes on the web site and also to report to them every 6 months regarding any complaints we may receive.

NYS OAG's Sandra Grannum wrote:

     "I am very happy that we are able to resolve this matter. May 1, 2006, is acceptable for submission of the first report.

     "It was a pleasure meeting you and I personally wish IHA great success.

     "Very truly yours,

     Sandi"
     Sandra Jefferson Grannum
     Deputy Bureau Chief, Health Care Bureau
     State of New York
     Office of the Attorney General
     120 Broadway, 25th Floor
     New York, NY 10271-0332
     Tel: 212.416.8920
     Fax: 212.416.8034

Yours,

Paul Glover

12/6/05

John McGinty
Special Investigator Supervisor
Pennsylvania Insurance Department
1062 E. Lancaster Avenue, Suite 15-F
Rosemont PA 19010-1565

Dear John McGinty,

Enclosed are samples of PhilaHealthia’s first literature, as requested, and some background about Ithaca’s payment history.

The Ithaca Health Alliance, upon which our system will be based, has been endorsed by the Tompkins County Chamber of Commerce, Tompkins County Health Department, the President of the Cayuga Medical Center, Ithaca's Mayor, the Chairman of the Tompkins County Legislature and the Chairman of NYS Senate's Insurance Committee, by many satisfied members and, most recently, approved by the NYS Office of the Attorney General.

I have asked Ithaca’s Alliance to forward copies of those letters to you.

As I mentioned, we’re a nonprofit member-based system which provides far more than payments for medical needs. As in Ithaca, we will offer discounts with area healers, open free medical and dental clinics, sponsor health education programs and a public health committee.

My book Health Democracy, based on the Ithaca and Philadelphia experiences, is scheduled to be published next summer.

Yours,

Paul Glover
(215) 805-8330

Hello Ann Torregrossa,

Rosemary Greco referred me to you to follow up my offer to contribute to Pennsylvania's health care reform discussion.

We've recently started PhilaHealthia http://www.philahealthia.org a member-owned co-op based on the system I started in Ithaca NY ithacahealth.org

Members pay $100/YEAR and are covered for everyday emergencies.  We're starting a free clinic.

While we'd rather see universal coverage, we are among the 900,000 Pennsylvanians without health insurance.

I'd be grateful for a chance to speak with you directly about our plan.

Yours,

Paul Glover (607) 342-2881 healthdemocracy.org

12/14/05

John McGinty
Special Investigator Supervisor, Pennsylvania Insurance Department
1062 E. Lancaster Avenue, Suite 15-F, Rosemont PA 19010-1565

Dear John McGinty,

PhilaHealthia seeks to proceed as a pilot program within your Department’s mandate to “innovate to meet the changing financial services marketplace.”

PhilaHealthia would agree to meet the standards enclosed, which we request be adopted as PID regulations for the co-op sector.

Enclosed also are letters of endorsement of the Ithaca Health Alliance, which I founded, from state and local public officials.

We request your cooperation in the spirit of Governor Rendell’s declaration : “I think that every Pennsylvanian, every American, should have health insurance coverage, but that type of plan would have to be coordinated by the federal government, which seems unwilling to tackle that challenge,” Governor Rendell said. “So that means the states need to step up and create innovative plans [emphasis added] that will work for their citizens. That’s what we’re going to do in Pennsylvania.
  “We all know that the cost of health care is rising at an alarming rate, three times the rate of the Consumer Price Index.  The cost of health care has doubled over the last 10 years. These costs are unsustainable for all of us, particularly small businesses who are struggling to provide benefits to their employees.
  “I’m asking groups who have a stake in this challenge – small business leaders, physicians, nurses, hospital administrators, insurers, union leaders, legislators and consumer advocates – to work with us on creative, home-grown solutions [emphasis added] to make sure all of our citizens have access to affordable, quality health care coverage.” (12/05).

Please let us know what concerns you may still have about PhilaHealthia and how we can resolve these, and please update us on the progress of your inquiry.

Sincerely,

Paul Glover
(215) 805-8330

12/31/05

John McGinty
Special Investigator Supervisor
Pennsylvania Insurance Department
1062 E. Lancaster Avenue, Suite 15-F
Rosemont PA 19010-1565

Dear John McGinty,

You requested

1. list of board members

I am currently the only principal for PhilaHealthia.

2. list of employees & beneficiaries, incl PA enrollees.

There are no employees. I am volunteering this work.

There are 13 members, all residents of Pennsylvania.

Beneficiaries include those who take hope that a co-op solution to ever-increasing health costs and lack of access will become available.

3. list of agents

There are no commission agents.


Yours,

Paul Glover
(215) 805-8330

12/15/05

Dear Mr Glover:

This letter is to advise you that the Pennsylvania Insurance Department has initiated an investigation into the activities of the above entities for possibly acting as an unauthorized insurer in the Commonwealth of Pennsylvania, pursuant to Title 40 *Insurance* Parallel Citation [40 P.S. fig 61] regarding health insurance benefit providers. In addition, as a result of the Department's initial investigation into this matter, you are to cease and desist from soliciting, marketing or processing applications including but not limited to the Philadelphia program, and accepting contribution checks and/or funds to Philahealthia for Pennsylvania consumers.

Sincerely,

John McGinty
Special Investigator Supervisor
Pennsylvania Insurance Department
1062 E. Lancaster Avenue, Suite 15-F
Rosemont PA 19010-1565

12/31/05
John McGinty;
Special Investigator
Pennsylvania Insurance Department

Dear John McGinty

PhilaHealthia has received your order of 12/15/05 to cease and desist offering its Health Fund medical plan among the several benefits available to members.

With full respect for your Department's obligation to enforce existing insurance laws, we regret that, during Pennsylvania’s growing health care crisis, you were not willing to discuss a pilot program which would serve the un-insured.

We offered you strict new regulations by which co-op sector coverage could be bound. We showed you that New York State has permitted the same plan to serve.

PhilaHealthia has now ceased to enroll new members, and may file an Article 78 challenge to your decision.

With respect, the distance between your office and un-insured Pennsylvanians is apparently great. As you know, 900,000 of the citizens you are required to protect have no health insurance. Neither the private sector nor government agencies are helping us. We assert, therefore, the necessity of a co-op sector.

We created a model community health system that has begun protecting the unprotected. The Ithaca plan upon which we are based is about to open a free clinic. PhilaHealthia could rapidly become the state’s best news regarding health financing.

We have proceeded in the best American tradition of empowering people to help themselves, while asking for no government assistance.

Please understand us then for supposing, correctly or not, that your Department has based its decision somewhat on political considerations. We are aware that Independence Blue Cross has been permitted by PID to retain over $1 billion surplus in defiance of an agreement with consumers; that mergers permitted by your Department reduce choice and coverage; that PID has approved for-profit conversions; that PID has permitted HMOs to impose ever-costlier premiums on policyholders.

We are aware that, while you yourselves are fully insured by the taxpayers of this state, millions of Pennsylvanians are suffering impaired health and thousands die prematurely, from lack of timely health care.

We are aware that Pennsylvania’s economy lags because many employers cannot afford to insure additional employees. We are aware that neither your Department nor the Pennsylvania legislature has a solution to this extraordinary crisis.

PhilaHealthia's members have appealed to your Department's conscience. We have asked repeatedly for your guidance to enable us to meet your standards and concerns, and have received instead demands to cease.

Since PhilaHealthia has been extinguished, un-insured citizens would need to proceed without the approval of public officers, to defend their lives.

This letter is our first press release.

Yours,

Paul Glover

2006

Illadelphia Philadephia Weekly 1/4/06

PhilaHealthia obtained pro bono legal counsel through Temple University's Center for Community Nonprofit Organizations (CCNO). They wrote to PID on our behalf:

March 31, 2006

Dear Mr. McGinty,

Enclosed please find information and documentation about Mr. Paul Glover and the two health security organizations he has founded: Ithaca Health Alliance and PhilaHealthia. We send this information with the hope that the Pennsylvania Department of Insurance will grant PhilaHealthia at least provisional authority to continue operations.

Mr. Glover is passionate about helping low-income Philadelphians acquire health security through the PhilaHealthia organization. As you can see, he has a long record of working in the public interest and especially in assisting to increase access to health care of people without health insurance.

We understand and appreciate PID's concerns in providing protections to consumers of health coverage and health insurance. We hope that PID will also consider the crisis of uninsurance in the city of Philadelphia where 135,000 people are uninsured and in the state of Pennsylvania where almost 1 million are uninsured. Governor Rendell called for creative new ways to address the uninsured crisis. We strongly believe that PhilaHealthia responds to Governor Rendell's call and can help alleviate the uninsured crisis by offering some health security to people who cannot otherwise afford health insurance.

In addition, we hope with this letter and accompanying documents to respond to some of the concerns raised in our conversation with Mr. Keating on 2/22/06.

Ithaca Health Alliance Success

PhilaHealthia is modeled after the Ithaca Health Alliance (IHA), also founded by Glover. IHA has been extremely successful and is continuing to grow since its start in 1997. IHA runs three major programs: The Ithaca Health Fund, the Ithaca Free Clinic, and IHA Educational Programs. Please see a detailed description of these programs enclosed below at II.1. Through the Ithaca Health Fund, IHA offers grants to its members for certain categories of medical expenses. PhilaHealthia hopes to enjoy parallel success and expand its programs to eventually include a clinic and extensive educational programs.

As a demonstration of IHA's success in Ithaca, the City of Ithaca, New York, has indicated an intention to enroll 400 employees in the Ithaca Health Alliance.

New York State Insurance Department Solution

With the support of the New York State Attorney General and Sandra Jefferson Grannum, Deputy Bureau Chief of the Health Care Bureau, IHA was able to reach an agreement with the New York State Department of Insurance to continue operations. One of the compromises made by IHA in order to gain NYSID approval was to offer discretionary grants instead of contracts for medical expenses. This compromise makes it harder to attract members as there is less guarantee than a contract, but IHA has successfully offset such concerns by expanding services to include health education programs and a Free Clinic which opened in January 2006. In addition, IHA makes public on its website all grants and rejections of grants, demonstrating to members that the process is transparent and fair. IHA has earned the community's support and goodwill. This is evidenced in letters written to the New York State Department of Insurance in support of IHA by prominent New York state citizens and IHA members. Please find these letters enclosed at II. 4 & II. 5.

Expertise

PhilaHealthia's development will be significantly guided by Paul Glover. Glover founded the Ithaca Health Alliance and served as office manager and primary category developer 1997-2005. The Ithaca Health Alliance has become a national model of community-based member-owned health financing.

The Ithaca Health Alliance's board of directors has included a medical case manager, medical doctors, nurse clinician, eye doctor, accountant, lending their medical expertise to IHA's programs. PhilaHealthia has discussed board membership with [Philadelphia professionals and others].

Actuarial

The selection and expansion of the Ithaca Health Alliance's medical payment categories has been based on an assessment by New York State of the frequency of selected injuries. New York State's Department of Health summary is available at http://www.health.state.ny.us/nysdoh/research/injury/injury.htm.

IHA's yearly expansion of medical payment categories is enclosed at II.10. IHA categories have grown every year 1998-2005, and our surplus grew as well. We have also attached a proposed progress report for grants that we hope to make available as the program grows. See enclosed at III. 3.

Sustainability

The maximum payments offered for each of these categories increase at the rate that new and renewing memberships enlarge the general fund.

Maximum payments offered stabilize when membership income does not increase. That is to say, the Health Alliance can sustain at any given level without growth. As case in point, in 2006, proposed annual payment increases were not enacted for the first time since the organization began. IHA agreed to limit membership to NYS residents, thus losing several hundred members from 46 other states.

Membership payments offered would systematically decrease were membership income to chronically decline. The Ithaca Health Alliance thus does not grow pyramidally.

Transparency

All payments and denials of payment are listed on the Ithaca Health Alliance's website. Every denial is listed by reason. Members are invited to appeal denials. During nine years of service, no complaint has been filed against the Ithaca Health Alliance. All board meetings, at City Hall, are open to the public.

Population

The population that PhilaHealthia expects to serve will not be lured by PhilaHealthia away from other more extensive insurance coverage. To the contrary, PhilaHealthia will offer some medical coverage to Philadelphians who cannot afford any other health insurance due to cost. In addition, Glover expects that many initial members will be community members who are interested in the program and join in order to show their support. We believe that there are not serious consumer protection concerns due to the transparent structure of the program, its potential for growth, and the success for the Ithaca model. This is evidenced by the member letters to the New York Department of Insurance enclosed below at section II.5.

Finally, we submit the enclosed documents for your review. We will be happy to address your concerns and discuss potential solutions. We hope to find a way to run this much-needed program with your support and approval.

Very truly yours,

Paul Glover
Founder, PhilaHealthia

Leah Snyder Batchis
Student Legal Intern

Enclosed Document List:

I. Paul Glover & His Public Interest Projects
Paul Glover's Resume
Background Information on Glover
Glover's Health Democracy Website
Glover's speaking engagement before members of Philadelphia's Sustainable Business Network
Ithaca Hours Pamphlet, founded by Glover
Franklin Crawford, "Local Cash Guru Molds Health Plan," Ithaca Journal
Announcing the start of the Ithaca Health Alliance, founded by Glover

II. Ithaca Health Alliance (IHA)
IHA Program Summary
IHA Flyer
IHA grant levels and categories
Letters from prominent New Yorkers in support of IHA
Letters from IHA members to NYSID in support of IHA
IHA Home page & Description
IHA Bylaws - PhilaHealthia's Bylaws will largely match those of IHA
IHA Board Members
IHA Health Fund description
Ithaca Health Fund Progress
Actuarial chart showing Health Fund Grant List Increases
IHA Financial Statement with grants made and grants rejected since 1998
Newspaper articles praising IHA program success

III. PhilaHealthia
PhilaHealthia Home Page
Philadelphia Weekly Article Discussing PhilaHealthia
Proposed actuarial growth, based on IHA experience. chart
PhilaHealthia standards for transparency, member ownership and nonprofit management.

Editor's Corner Fierce Health Care 11/10/06

2007

This is What Health Democracy Looks Like! Defenestrator, July 2007

7/1/07

Dear Rosemary Placey,

Thank you for your reply of 7/11/07, which is the first response PhilaHealthia has received from the Pennsylvania Insurance Department since January 2006. We’re gratified that you endorsed our intent, when interviewed by CBS.

We agree with you, as I mentioned, that insurance should be regulated, to prevent abuse. We further agree that capitalization should be sufficient to protect policyholders. PhilaHealthia’s capitalization will match and exceed that of the Ithaca Health Alliance, which is permitted in New York state.

Thank you for providing the direct link to PID’s application for Certificate of Authority. The requirements presented there underscore our need for your Department’s flexibliity and guidance.

First, PID requires a $2,500 nonrefundable application fee. This is nearly the highest such State payment in the nation, and far above New York’s $10.00. We request waiver of this fee.

Secondly, PID requires $1,500,000 initial capitalization. As in Ithaca, NY, we proceed by gathering small membership fees. In Philadelphia we will begin with $100,000, by gathering $100/each from our first 1,000 pledges. This will suffice as foundation upon which to build as Ithaca did: http://www.healthdemocracy.org/graph.jpg

Thirdly, PhilaHealthia’s grassroots process enables us to pay for gradually expanded categories of medical and dental need as more members join and renew. We do not begin with capability to cover mandated categories. Nor do we grow pyramidally, but stabilize the payment menu when enrollment stabilizes. Administrative staff are paid not more than twice the region’s livable wage, regardless how big this plan gets.

We have met your Department part way by asking to be regulated according to standards suggested at http://www.healthdemocracy.org/legislation.html.

We are willing to negotiate these standards with you and follow your suggestions for compliance on a basis which allows us to proceed incrementally, as above.

Like 135,000 other Philadelphians, we are uninsured, low-moderate income. Few of us can afford health insurance, nor are we eligible for state/federal aid.

We have no choice but to build this lifeboat.

We will be glad to meet with and collaborate with PID staff, preferably in the Philadelphia office. Please offer some dates.

Respectfully,

Paul Glover

cc: John McGinty, Special Investigator III
Arthur F. McNulty, Chief Counsel, Pennsylvania Insurance Department
Barbara Holland, Governor’s Office of Health Care Reform

“Regulation is inconsistent with prohibition or exclusion."
--Chicago Motor Coach Co. v. City of Chicago, 337 Ill. 200, 169 N.E. 22, 25 (1929).

2008

2/11/08

Commissioner Joel Ario
Pennsylvania Insurance Department
1321 Strawberry Square
Harrisburg, PA 17120

Dear Commissioner Ario,

We are writing to you directly, encouraged by your background with PIRG, regarding our frustration communicating with regional offices.

We Philadelphians have started a nonprofit health co-operative, PhilaHealthia, because 140,000 Philadelphians and one million Pennsylvanians are uninsured. We face little prospect of federal or state relief, and cannot afford standard coverage.

Our co-op is modeled after a successful micromedical plan I started in Ithaca, NY in 1997. There, members of the Ithaca Health Alliance pay $100/YEAR to be covered for 15 categories of everyday emergency, anywhere in the in the world, to specified maximum amounts. They also own their own free clinic for holistic and allopathic preventive/diagnostic care.

The Ithaca Health Alliance [ithacahealth.org] is monitored by the NYS Attorney General and NYS Insurance Department. Enclosed are letters of endorsement from Ithaca’s:
Chamber of Commerce
Health Department
Cayuga Medical Center
Mayor
Chairman of County Legislature and the
Chairman of NYS Senate's Insurance Committee

Immediately upon starting PhilaHealthia we were ordered by PID to cease and desist. We have requested meetings, our lawyers have supplied documentation, and gotten no reply.

Specifically, we sought approval from PID as a pilot program that wouId be regulated by strict standards of transparency (enclosed). All medical payments and all denials of payment would be posted on our website. Board members would be elected, administrative pay would be capped at twice the regional livable wage, there are no commission agents, and so forth.

As a grassroots entity, growing incrementally, we cannot ante the statutory reserves nor soon cover mandates. Yet we have proven, in Ithaca, eleven years of expanding service without complaint.

Again, for two years there has been no response from PID. My personal frustration became so great that I’ve written “A Crime Not a Crisis: Why Philadelphia Health Insurance Costs So Much. Six Ways to Fix It.” This is being distributed throughout Pennsylvania.

We believe that insurance should be regulated. We respect honest regulation. We prefer that PhilaHealthia proceed with state approval. But we are uninsured and cannot wait upon the convenience of a bureaucracy itself well-insured and apparently indifferent to us.

Therefore we have been forced to choose between state law and our lives. PhilaHealthia has begun a pledge campaign. When 1,000 have agreed to pay the $100/YEAR membership we will start covering specifically and only broken bones and emergency stitches, to a modest maximum. As more people join and renew we will expand coverage prudently, as in Ithaca.

We extend another respectful invitation to meet with you, seeking approval as a well-regulated pilot program, writing together a better chapter in the history of Pennsylvania insurance regulation.

Yours,

Paul Glover (215) 805-8330
cc: Governor Edward Rendell

3/27/08

Mr. Glover,
 
Here is my contact information. I will call you next week about setting up a meeting here in Harrisburg.
 
Thank you,
 
Terry Keating
 
Terry Keating
Deputy Chief Counsel
1341 Strawberry Square, PA Insurance Dept.
Hbg. PA
17120
717-783-2125

4/2/08

We have a reply from Pennsylvania Insurance Department to our letter of 2/11/08.

Terry Keating, Deputy Chief Counsel for PID, called me Thursday to say he is willing to meet with us in Harrisburg, since there would be other officials present.

He emphasized that the Consumer Protection Agency of PA was “very concerned” that we were soliciting membership pledges.

I’d suggest that the only people attending this meeting with PID should be those of us ready to tell PID firmly we will proceed in any event, though we’d prefer to abide a respectful set of
Their prime tactic will be to intimidate us: well-dressed people telling us if we break this law we might be fined or jailed.  Our prime response needs to be: if you take us to court we will take
Several moral assertions:

We have for two years respectfully sought guidance from PID for some corporate form suiting their standards, by which a grassroots, genuinely non-profit process can serve Pennsylvania’s uninsured
Many of our friends are bureaucrats and they are fine human beings.  But some situations require them to choose between being a bureaucrat and being human.  This is one of those cases.

PID bureaucrats have the best health insurance in this state, while many of us who pay taxes have none.  It is proven that the uninsured suffer higher death rates. 
http://www.nytimes.com/2007/09/11/opinion/11tue3.html
http://www.usatoday.com/news/health/2007-03-01-uninsured-kids_x.htm
http://www.hhs-stat.net/scripts/result.cfm?start=7861&page_no=394&lk=7

Several legal assertions:

PID has the authority to adopt regulations consistent with its Vision to “To provide a premier regulatory environment which promotes the best insurance marketplace to serve consumers.” And t
We have the necessity defense: laws may be broken when essential to prevent a greater harm.  http://en.wikipedia.org/wiki/Necessity

And according to a federal court: “Regulation is inconsistent with prohibition or exclusion." --Chicago Motor Coach Co. v. City of Chicago, 337 Ill. 200, 169 N.E. 22, 25 (1929).
__________

4/3/08

Hello PhilaHealthia advocates,

Pennsylvania Insurance Department has agreed to meet with PhilaHealthia in Harrisburg, between April 28 and May 2.

If you'd like to help PhilaHealthians impress our need and resolve at this meeting, please let me know which of these days you'd be available, and whether you might be able to provide a ride for other
Here's text from reply to Terry Keating, Deputy Chief Attorney of PID:

PhilaHealthia seeks to be regulated by PID as a pilot program bound by standards for fiscal integrity and transparency as suggested at http://www.healthdemocracy.org/legislation.html.  Any corpor
Here's the history of our correspondence with PID: http://www.healthdemocracy.org/pid.html

Paul
_________________
4/11/08

Mr. Glover,
 
As discussed, we offered to meet with you on the PhilaHealthia plan. We had proposed to meet yesterday, which you declined, stating that you would get back to us with a more convenient time. &nbs  
Should you desire, please be advised that the Department remains open to meet on the issues at a mutually convenient time.
           
Thank you,
 
Terry Keating  
Deputy Chief Counsel
___________________

4/11/08

Terry,

Sorry for the miscommunication.  

I implied but did not make explicit that we'd invite your preference among the dates April 28, 29, 30 and May 1.  Any of these days are fine with us.

Would like to emphasize, in response to your earlier note, that PhilaHealthia has not collected membership payments for over a year, that all checks received were returned or destroyed, and that Phila
We are gathering pledges instead.  

Our corporate form has waited for discussions with PID.

Yours,

Paul
____________________

4/16/08

Dear Terry Keating and Nicole VanOrder,

Sending confirmation via this email also, for our meeting 

April 30 at 1:30pm at your offices.

Yours,

Paul Glover

PhilaHealthia
(215) 805-8330
_______________

4/16/08

Mr. Glover,
 
Thank you for your response. At this point, we have various documents, indicating that PhilaHealthia intends to offer certain coverages, which will increase depending on the number of members who part  
Thank you for your attention to this matter.
 
Terry Keating            
___________________

4/23/08

Dear Terry Keating and Nicole VanOrder,

Thanks for your note. Here are brief responses to your questions.

There will be a number of people accompanying us to Harrisburg, a few of whom will attend the meeting. When names are finalized we'll provide them. As we are organizing to maximize democratic decision
RATING

PhilaHealthia will begins offering minor medical reimbursements with approximately $100,000 when the $100/YEAR pledges of 1,000 pioneer members have been received. This compares favorably with the $300 first-day capitalization of the Ithaca Health Alliance, which has been approved in New York state, which has grown incrementally and s
PhilaHealthia will be a community-rated minor medical plan, charging the same annual membership fee regardless of preexisting conditions.

SOLVENCY

PhilaHealthia proceeds gradually and carefully to expand medical reimbursement categories in such a way as to maximize individual member benefits while retaining part of total assets for investment in local free clinic systems.

These categories, and maximum reimbursement for each, will be determined democratically by the will of the membership at large by election, after carefully considering Philadelphia and Pennsylvania sickness and injury statistics.

PhilaHealthia will succeed by following the example of the Ithaca Health Alliance, initially reimbursing non-elective medical categories such as broken bones and emergency stitches, to specified maximum amounts.

By such prudence, expanding membership would allow broadened reimbursement, without adverse selection, eventually providing preventive care through member-managed free clinics and discounts from area healers.

PhilaHealthia and the Ithaca Health Alliance are not pyramid schemes because, when new and/or renewing membership peaks, the reimbursement plan does likewise. The plan will not overshoot its capacity to pay.

PROMOTION

PhilaHealthia will always and prominently present itself as a minor medical plan. We will specify clearly in literature and on our website exactly the categories to be reimbursed, emphasizing that we are not a major medical plan.

PhilaHealthia will focus outreach on the uninsured consumers who are not protected by governmental or corporate plans. We will emphasize the genuinely nonprofit and democratic nature of our process as stipulated in bylaws:

bylaws.html

We'll emphasize that certain of our standards of transparency and accountability surpass current regulations: legislation.html

For example, all board meetings will be advertised and open to the public, minutes of meetings will be published on the web, and all reimbursements and denials of reimbursement will be listed on the web.

PhilaHealthia will pay nothing for advertising, relying rather on news stories and on direct outreach at public events. We are also creating a documentary film about Pennsylvania health insurance concerns and about the benefits of co-op plans. PhilaHealthia is a revival of fraternal benefit and mutual aid health systems.

Please direct future correspondence to our general email address:

PhilaHealthia@ gmail.com

Sincerely,

The PhilaHealthia Organizing Committee
___________________

4/24/08

Mr. Glover,
 
Thank you for your response and attached information; this is helpful to our review. As a housekeeping matter, it sounds like you haven’t identified your team yet. Due to limited meeting space and busy staff calendars, maybe we should hold off on scheduling the meeting until you do so. The alternative is to rely on the plan’s document submissions instead.  
Let us know. Thanks,  
 
Terry Keating
_____________

4/28/08

Terry,

PhilaHealthia is ready to meet Wednesday at 1:30.
_________________

4/28/08

Mr. Glover,

Please advise what their positions are and what role they play in any review of the plan.

Thank you,

Terry Keating
_________________

4/28/08

Terry,

These are people who have pledged to join PhilaHealthia when 1,000 pledges are obtained. 

We have no formal designations.

They are among a greater number who will, at announced meetings, review proposals for manner of incorporation.

When incorporated, we will hold board elections.  Board members will ratify and update the medical payment menu.

Yours,

Paul
________

4/30/08

Dear Terry,

We look forward to rescheduling our meeting, following your review of the materials below, and would favor May 6 or May 12 in the afternoon.

The proposed health co-op standards that I mentioned during our last call are at http://www.healthdemocracy.org/legislation.html and bylaws at http://www.healthdemocracy.org/bylaws.html

PhilaHealthia’s organizing committee has drafted a Policy Brief, appended below.

I’m mailing to you several Ithaca Health Alliance financial reports from 1997-2007.

These include IHA monthly tallies 1998-May 2004 and its annual tallies 1997-2007.  These show membership and grant payments to IHA, plus interest income, with expenses for the office, medical grants to members, and credit card fees.  You’ll see also the IHA chart of grants made for its primary injury categories, plus the average amount granted per category of injury per year.

MEDICAL GRANTS TO MEMBERS:

The Ithaca Health Alliance grant menu was last expanded in 2005.  Since then, 40% of assets have been placed into a restricted fund for the free clinic.  Of 87 months between 1997 and 2004, April 2003 was the only month during which IHA paid members more than it received.  The only year that IHA posted a net loss was 2005, due to $40,000 legal expenses. 

Since 1998, when medical grants began, IHA has fully covered medical expenses for 92% of the bills submitted by members for broken bones, fully covered 93% of bills submitted for emergency stitches, and fully covered 49% of bills submitted for emergency room visits.

Because Philadelphia metro medical fees will be higher-- we’re seeking this data from area physicians and hospitals-- PhilaHealthia’s initial maximum grants per category should be limited commensurately.  The IHA grant guidelines below include a stop-loss provision, and PhilaHealthia should also.

At the same time, NYS statistics show that urban per capita rates of broken bones, emergency stitches, burns, etc. tend to be lower than rural rates.  Urban rates of disease are higher.  We have Philadelphia injury causes and rates from the Pennsylvania Health Department.

MEDICAL COST INFLATION can be offset three ways:

1. Negotiate discounts 30-50% with Pennsylvania medical centers and healers.

2. Offer $300/year membership which provide 30% greater medical reimbursement capacity.  This will accelerate growth of the general fund, upon which the menu of reimbursements may be enlarged for $100/year members.  Members paying $300 would do so both to expand their grant maxima and to contribute to Fund growth.

3. Open free clinics.  Though IHA is funded by members and donors, doors are open to all.

PhilaHealthia’s strategy may be summarized as proceeding cautiously to build the Philadelphia equivalent of Ithaca’s empirical actuarial experience, prudently maximizing immediate member benefits while establishing reliable assets for larger medical grants.

The following grant guidelines for the Ithaca Health Fund http://ithacahealth.org/healthfund.html include a stop-loss provision (7).

1. For IHA granting purposes, a broken bone shall be defined as an actual fracture or break, as distinguished from a contusion, dislocation or sprain, and must be verified as such by bill/s for services documenting the same. Emergency stitches shall be defined as those resulting from accidental or non-elective laceration or puncture. Ambulance rides shall include medical helicopter rides.

2. Photocopies of bills on proper letterhead are to be submitted with requests for grants, by either member or health provider. Approved grants will be paid to the health provider, or to the member. Members will sign a form authorizing the Ithaca Health Alliance to call health provider(s) to request information as required.

3. The maximum total amount of grants available to any member during the 1st year's membership shall be $3,000, during 2nd and 3rd year $3,500, during 4th and subsequent years $4,000. The maximum paid shall be the maximum grantable at date of injury or first treatment.

4. FUND IS PAYER OF LAST RESORT. Ithaca Health Alliance grants are not available for expenses paid by insurance or other third parties. However, order of payment of bills by insurers shall not preclude the Ithaca Health Alliance from awarding its own maximum in grants, within approved categories, when total of all bills for the injury exceeds the maximum payment by insurance.

5. Grants are made anywhere in the world, for any credentialed health provider whose scope of practise includes the services rendered.

6. For each grant, a member may ask IHA to prioritize grant amounts as the member prefers, e.g. to doctor or ambulance.

7. Monies reserved by the Ithaca Health alliance for fund activities shall retain a minimum balance, to be determined by the Ithaca Health Alliance board, below which no grants will be made. Granting resumes when the fund surpasses the minimum balance. This minimum balance is currently $40,000.

8. When members think they have an expense which qualifies for a grant, they may call and/or mail proof of expense to Ithaca Health Alliance, PO Box 362, Ithaca, NY 14851. The Health Alliance office may call health provider(s) to verify whether these expenses are insured. If so, grants are eligible for the remaining parts of expense, within grant limits. We may also call the member for clarification.

9. If grant payment is appropriate and approved by the Grants & Loans committee, the Ithaca Health Alliance seeks first to make par/full payment with any Ithaca HOURS available. Remainder of payments is to be made in U.S. dollars.

10. If a grant is denied by the Grants & Loans committee, then the member has the right to appeal to the general monthly meeting of the board. Any reevaluation of grant award would, if approved, be calculated from the original date of submission.

11. The maximum grant amount from the Fund for a specific type of injury/health expense will be set by the Board. Current granting categories and maxima are listed on the Ithaca Health Alliance website and available by request from the IHA office. Each grant category may have specific conditions for granting, including but not limited to minimum length of membership for eligibility, requirement of provider discount, or referral of credentialed provider for the health service received.

12. The Ithaca health fund is a project of The Ithaca Health Alliance, Inc. Board members alone are responsible for legal documents, and are indemnified and held harmless for claims against the fund.

OFFICE OVERHEAD:
I donated the first six years of IHA development.  The office manager wage is now set at $10.00/hour for one part-time staff.  The clinic manager receives $15.00/hour.  Office rent, sta ____________

PHILAHEALTHIA POLICY BRIEF

THE PROBLEM

As you are aware, nearly 3 million people under the age of 65 were uninsured from 2006-2007 in Pennsylvania, and there are currently nearly 132,000 uninsured adults in the Philadelphia area [now 160,000]. Though the state has worked diligently to find ways to cover these people ~ the SCHIP program for children and families with children, and AdultBasic for moderate-income people paid for out of tobacco settlement funds ~ funding is limited and many still lack coverage.

Those who are uninsured are up to seven times more likely to use the emergency room of their local hospital as their primary source of care, frequently go without preventative tests and check-ups, tend to delay or bypass needed care, all of which results in lower quality of life due to higher incidents of illness, increased hospitalizations for preventable illnesses and increased mortality rates than those those with quality insurance coverage. The lack of preventative care, failing to catch illnesses early, and increased hospitalizations means greater costs for uninsured consumers when they do seek care, often resulting in increased hardship due to the heavy burden of financial liability and debt. When consumers are unable to pay the bill, these costs are borne by the public; currently, 85% of the estimated $41 billion dollars uncompensated care costs hospitals and clinics is paid for out of public funds. The high costs of meeting the health needs of the uninsured which are passed on to the public divert funds that could better be spent on other public health needs such as schools, civic centers, and community infrastructure. Furthermore, the uninsured and under-insured are more likely to spread infectious diseases that would normally be detected in the types of preventative screenings they avoid due to prohibitively high costs.

OUR SOLUTION

PhilaHealthia was formed to find a sustainable way to begin to offer some relief to the still uninsured in Philadelphia, without costing the consumer unreasonably, and without costing the state at all. Our plan, based on a model of incremental growth that has proven itself for going on 10 years in Ithaca, New York by the Ithaca Health Alliance, provides ever increasing categories of coverage for democratically determined categories of risk at a rate designed to safeguard against the insolvency of the fund. Maximum overhead as a percentage of fund growth will be written into the bylaws to keep operating costs low so as to maximize the benefit to the consumer. Though not comprehensive in its coverage at first, this plan allows for growth in that direction as more members join PhilaHealthia' s mutual-aid effort. PhilaHealthia would succeed by following the example of the Ithaca Health Alliance, initially covering non-elective medical categories such as broken bones and emergency stitches, to specified maximum amounts. Expanding membership would allow broadened reimbursement, without adverse selection, eventually allowing us to provide preventive care through member-managed free clinics and discounts from area healers.

WE SEEK TO BE REGULATED

We understand the need to protect consumers from fraud and other financial liability. We also recognize that existing coverage options that meet the letter of the law are prohibitively expensive to those most in need. We understand that these regulations were never intended to prevent these same consumers from pulling together to safeguard themselves and their loved ones from harm in the face of threats to their health and well being.

We wish to be regulated without mandates and without an arbitrary minimum fund balance. Instead, we wish to provide coverage based on the desires of our members. We wish to protect the solvency of our fund based on proven and equitable measures matched to the resources we have at our disposal. Help us hold to the will of our members, Philadelphia' s uninsured, without infringing on our right to help each other.

WHAT WE REQUEST FROM P.I.D.

* Approve us as a pilot program to better protect the needs of the uninsured in Philadelphia

* Support us in the filing of necessary paperwork to assure the legitimacy of our organization

* Set guidelines for regular reporting of our operations within Pennsylvania

WHAT WE OFFER PENNSYLVANIA

* A democratic and transparent decision-making structure that maximizes consumer control over our own health coverage

* Sustainable coverage for select categories of non-elective medical care

* A plan for expanding coverage based on the principles of mutual-aid rather than government or corporate financing

Paul Glover
(215) 805-8330
____________

4/30/08

Terry,

The Ithaca Health Alliance financials for 2005, 2006, 2007 are found at finances.html As the prior email noted, 2005 was the only year of net loss, due to legal fees during negotiation with the New York State Insurance Department.
I'll mail these with summaries for 1997-2004.

Yours,

Paul
_________________

5/23/08

Hello Terry,

Here are some dates for our afternoon meeting.

Please let me know whether any of these suit your schedule:

June 2, 6, 9, 11, 12,13, 16, 17

Thanks,

Paul
_________________

5/27/08

Mr. Glover,

The financials you provided have been circulate internally. At this time, there are some serious regulatory priorities that demand the resources of our Office of Companies Regulation. However, I will speak with them to see if they can take an initial look at the financials so that we may at least speak intelligently on the issues.
I believe it would then be advisable to have a follow up phone and review any issues that we spot, to determine whether additional information is necessary.

Thank you for your time and attention to this matter,

Terry Keating 
________________

5/27/08

Hello Terry,

Thanks for your latest replies and for these questions about the Ithaca Health Alliance.

I've copied it to Bethany Schroeder, IHA board president, and to Rob Brown, office manager.

Mr. Glover,
 
>On the Ithaca Health Plan: Who prepared the financials that you sent to us?


I did, as executive director 1997-2005, for 1997-2004.    

>Where are the financials for 1998 – 2004?

They appear in summary tabular form as delivered in the packet.

During my tenure, accounting was as elemental as the new system itself: office EXPENSES summarized monthly (for which all receipts are on file), grants to members for medical needs, administrative staff payments (I donated the first six years of work, accepted $7/hr for one year, then $10/hr), INCOME from members, donors/grantors and interest.

Having moved to Philadelphia in 2005, I did not bring with me full stats for 2004, which may be extracted from the current IHA database.  

PhilaHealthia would rely on the IHA spreadsheet reporting format.  All financials would be posted to our website monthly.  Transparency would meet standards at http://www.healthdemocracy.org/legislation.html  

>Who is the Chairman of the Board of Directors and/or who is most knowledgeable in going over the financials with us?

Bethany Schroeder, IHA board president, and Rob Brown, office manager, whose emails appear in header.  IHA phone is (607) 330-1194.  

>Who has copies of the benefit plans (i.e., the operative document explaining what the monthly cost is per member and what medical expenses are covered) for the period of 1998 – 2008?

IHA members pay an annual fee of $100/adult; $175/couple; $50/child.  These are found at http://ithacahealth.org/membership.html

Medical expenses covered (granted) are shown evolving at http://healthdemocracy.org/progress.htm  A chart of this process is at http://www.healthdemocracy.org/payments.pdf (2006 was proposed but not enacted, in order to sponsor the free clinic).

--Paul
___________________

5/27/08

I'm the President of the [Ithaca Health Alliance] Board. I am happy to answer questions. Rob Brown, the IHA office manager, is the best resource for answering specific financial questions, since he pr
As Mr. Glover has written below, information about the Fund's grants and loans programs is available at the IHA website: ithacahealth.org.

Feel free to contact me or Rob.

Bethany Schroeder
_____________________

6/26/08

Mr. Glover,

I got your message-- thanks. We've taken a preliminary look at Ithaca's materials and it's really hard to determine even basic info, e.g., what benefits were provided, what the policy/plan was, the rating mechanism, etc.
Given the budget and summer schedules, let's touch base next week. Thanks,

Terry Keating
Deputy Chief Counsel
__________________

7/2/08

Terry,

I've provided to you the website containing Ithaca's current plan  grants.html, a printout of its incrementally-expanding menu of medical grants, a list of all grants to-date by category, a chart of historic grant frequency and size.

This confusion underscores our need for a direct meeting.  I'll be able to explain this concisely and fully, with reference to documentation provided.

Please select an afternoon later in July and we'll be there: 

July 28, 29, 31.  August 1 is fine too.
_____________

----- Original Message ----
From: "Keating, Terrance" <tkeating@state.pa.us>
To: Paul Glover <paul5glover@yahoo.com>
Sent: Tuesday, July 8, 2008 4:29:21 PM
Subject: RE: Philahealthia

Mr. Glover,
 
    Thank you for taking the time to discuss the plan. Please advise whether you are available for a phone conference this Friday, July 11th at 10 am.
 
Thanks,

Terry Keating
__________

Terry,

Friday 11th at 10am is fine. 

Thanks,

Paul

____________

7/2/08

Mr. Glover,
 
That’s fine: I will check our schedules. It might help to have a “pre-meeting” teleconference to go over some of the questions we have, so you can be prepared to address them when we meet.  
Terry Keating
______________

7/2/08

Mr. Glover,
 
Thank you for taking the time to discuss the plan. Please advise whether you are available for a phone conference this Friday, July 11th at 10 am.
 
Thanks,
 
Terry Keating
________________

7/2/08

Mr. Glover,
 
You mentioned that the Ithaca cooperative was organized as a non-profit organization. Could you please provide us with the articles of incorporation and by-laws?
 
Thank you.
 
Terry Keating
____________

7/8/08

Terry,

The bylaws of the Ithaca Health Alliance are adopted verbatim by PhilaHealthia: bylaws.html

The articles are:  

CERTIFICATE OF INCORPORATION
of Ithaca Health Alliance, Inc.

It is hereby certified that:

1.  The name of the corporation is Ithaca Health Alliance, Inc.

2.  The corporation is a corporation as defined in subparagraph (a)(5) of Section 102 of the Not-For-Profit Corporation Law; the corporation is a Type B Corporation under Section 201 of the Not-For-Profit Corporation Law.

3.  The purposes for which the corporation is formed are:

To promote community health and wellness in general and specifically to support activities which will increase the availability to the public of low cost, quality health care.

To provide information and outreach about the role and value of local health networks.

To provide information about health services to members.

To facilitate lower-cost access to health services.  

To make grants to local health-related organizations and to individuals.

To operate a newsletter and to serve as a forum for discussion of issues related to personal and public health.

To do any other act or thing incidental to or connected with the foregoing purposes or in advancement thereof, but not for the pecuniary profit or financial gain of its members, directors or officers, except as permitted under Article 5 of the Not-for-Profit Corporation Law.

Nothing herein shall authorize this Corporation, directly or indirectly, to engage in or include among its purposes any of the activities mentioned in Not-for-Profit Corporation Law Section 404(b) through (v).

__________

7/11/08

Mr. Glover,
 
Sorry we had to reschedule our phone conference-- how is 3 pm on Monday July 14th?
 
I will double check with Ms. Bain to make sure that’s a good time for her, too.
 
Thank you,
 
Terry Keating
 
Terry Keating, Deputy Chief Counsel for Insurance
__________

7/11/08

Terry and Shelley,

3 on Monday is fine.

Paul

PID ORDER & PHILAHEALTHIA REPLY

GOVERNOR'S OFFICE OF GENERAL COUNSEL
August 4, 2008

PhilaHealthia c/o
Paul Glover
Phila., PA. 19144

Re: PhilaHealthia

Mr. Glover, We are writing in response to your request that the Insurance Department revisit and review the PhilaHealthia plan in more detail. As more fully discussed below, the proposed plan would not only violate Pennsylvania insurance laws, it would also have virtually none of the consumer protections necessary to transact insurance in Pennsylvania.      

As you are aware, the Insurance Department had previously reviewed PhilaHealthia's plan to solicit consumers to pay for health coverage. PhilaHealthia's stated intent was, initially, to provide limited health coverage, primarily emergency services (e.g., for broken bones and stitches), then to expand coverage as more members enrolled and PhilaHealthia collected more funds.      

Upon review, the Department advised PhilaHealthia in December of 2005 that the proposed plan constituted transacting insurance, which would require licensure under Pennsylvania law. As you are aware, PhilaHealthia has no such license to solicit or to issue insurance. This was communicated to a contact at PhilaHealthia, Meenal Raval, who subsequently advised that the plan would be discontinued, and who then disassociated herself from the plan.      

Thereafter, you had asked the Department to speak with counsel for PhilaHealthia (Sharon Wilson, Esq., at Temple University) to discuss the issues. We did so at length in the Spring of 2006 and again advised that collecting funds to pay claims constitutes transacting insurance, which requires compliance with Pennsylvania insurance laws. Ms. Wilson did not disagree or present any argument or analysis that the plan was not governed by Pennsylvania insurance laws.      

Sharon Wilson said our plan seemed honorable and sound and requested that your Department govern it according to standards offered at healthdemocracy.org/legislation.html

In the Spring of 2008, you again asked that the Department review the plan and that the Department permit the plan to operate in some fashion "subject to strict guidelines and monitoring." In response, we requested any information or documents, demonstrating the types and levels of coverage, the actuarial bases for the rates charged, and for all relevant financial information. You responded by advising that PhilaHealthia's plan would be patterned after the Ithaca Health Alliance and you provided us with a number of operative documents and materials on that plan.     

We then provided these documents to you several times.

It appears that there is no fundamental disagreement that such a plan constitutes insurance but, rather, you are seeking permission to sell an alternative form of health coverage, which you argue incorporates sufficient consumer safeguards, and which you believe could be used as a model for covering Pennsylvania's uninsured population.     

On July 14, 2008, Shelley Bain, Director of the Bureau of Accident and Health and myself engaged in a lengthy conference with you to review the financial statements of Ithaca Health Alliance. At that time, too, you provided us with more specific details on how PhilaHealthia proposes to operate, the nature of coverage, rates and other aspects of the plan. Essentially, you touted the success of the Ithaca plan and suggested that a similar plan should be employed in Pennsylvania.     

A review of the Ithaca plan (and, vicariously, the proposed PhilaHealthia plan) raises a number of consumer issues that we brought to your attention at our July 14 [2008] teleconference, including the following:

- That the Ithaca plan is only paying out about 30 to 50 cents on the dollar in claims. This is in contrast to licensed insurance companies typically paying out closer to 80 – 85 cents on the dollar in claims.

The Ithaca Health Alliance began with with $300 on its first day (2/12/97), and built reserves gradually . After one year it held $10,500. To date, over $700,000 has been raised. Expanded assets allow the schedule of payments and maximum payment to increase. When assets become great enough to cover all medical needs on a genuinely nonprofit basis, nearly all Fund money could be distributed as payments to members.

Overhead for Fund management was nearly zero for the first six years, relying on volunteers. Since 2003, one part-time staff person earning $7- $10/hour has been able to manage 700- 1,400 members. Administrative pay is capped at twice the region’s ‘livable wage.’ Our administrative model, on a larger scale, compares admirably with investor-driven HMO excess.

You admit that insurers retain 15-20% of revenue for administration. Some insurers retain 30%. Much is for multimillion-dollar CEOs. Medicare retains about 3%. Will your Department suggest that HMOs are more cost-efficient and consumer-driven than our genuiniely nonprofit plan?

- That though the Ithaca plan has very limited emergency benefits, numerous consumers have had a volume of claims denied because the medical services are not covered by the plan (e.g., vaccinations, pap screening, acute pharyngitis, hormone replacement, dental sealants, nasal polyps, bursitis, kidney stone removal, CAT scans, prescriptions, mammograms, rubella, radiology, etc). This raises a very real concern that consumers simply do not understand their benefits plan or the scope of coverage, unlike that provided by health policies regulated by state insurance laws.

Coverage is made plain and clear at ithacahealth.org/grants.html. Members also receive this list via mail upon joining or renewing.

There has never been a denial to a member for emergency care such as broken bones and stitches. Ithaca Health Alliance’s record in this regard is superior to, and less lethal than, denials by “legitimate” insurers. Desperate people send bills regardless of stated coverage.

Between one and five claims are denied monthly, upon a member base between 700-1,400. This is a half-percent denial of claims to members. Most of these are for the annual $20/$30 dental exam reimbursement, which requires that a dentist provide a 10% discount at time of service.

Since you regard the IHA denial rate as excessive we may assume you evaluate denial rates for HMO claims.

-That about 40 cents on the dollar is being used to fund a "free clinic." It does not appear that this is being disclosed to members in any of the written materials, or on the Ithaca website.      

The Ithaca Health Alliance makes clear and plain on its home page and in all literature that it sponsors an emergency Health Fund and the Ithaca Free Clinic; makes grants to local health-related programs; makes interest-free loans to local healers for facilities, equipment and training; and hosts health education events.

Annual income and expense are on the web at ithacahealth.org/moreaboutus.html. According to the Ithaca Health Alliance’s President, and its Office Manager, “PID has not contacted our office with any request for information, and I find it unlikely that they requested our 990 filings from the federal government; if they had, they would already have documentation contrary to their assertion.”

No member has ever complained to the New York State Insurance Department about the services provided by the Alliance. A Claims Committee handles any challenges to denial of claim in a face-to-face manner, in a location mutually convenient. By contrast with “legitimate” insurers, all Alliance board meetings are open and democratic. Members may present themselves as candidates for the board, and dozens have.

You mentioned that the program is designed to "cover the uninsured", however, it only offers partial coverage because members are balance billed for unpaid amounts of claims.      

Are you suggesting that “legitimate” insurers fully cover every illness and injury without maximum limit?

For example, a new member who buys coverage pays $100 a year, but would only receive $500 in benefits, and it would only cover broken bones. As discussed, if for example, a member is billed $2,000 by the hospital, the member would still be liable for the remaining $1,500. This is not a reasonable alternative to legitimate insurance, either from the standpoint of consumer expectation, or as a matter of compliance with Pennsylvania insurance laws.

Your numbers are incorrect. New Alliance members are instantly eligible for claims totalling $3,000 during their first year. Second and third year members $3,500. Fourth and subsequent $4,000. For the same $100/YEAR since 1997.

This is not a reasonable alternative to legitimate insurance, either from the standpoint of consumer expectation, or as a matter of compliance with Pennsylvania insurance laws.

The Ithaca Health Alliance does not pretend to provide an instant alternative to “legitimate” health insurance. The Ithaca Health Alliance is popular because it offers something far better than nothing, for those without health insurance. This is far better than what your letter apparently offers us, which is nothing.      

You had also suggested that the Department consider permitting PhilaHealthia to operate under some form of monitoring. However, the Department does not have the statutory authority to design an ad hoc health plan, let alone one that fails to conform to Pennsylvania law.

Your Department’s Mission Statement charges you to “innovate to meet the changing financial services marketplace.” This is a charge to apply relevant law creatively, to accommodate new conditions.

For three years we asked your counsel for the existing corporate form likeliest to match your regulatory concerns. We inquired whether a hospital plan or mutual benefit society would be preferred. To this you never replied. We have invited your Department to be flexible and humane.

You have the authority to recognize the benefits to uninsured Pennsylvanians of this model, commend our intent and honesty, to advocate with the Commissioner for space for our co-op process, and to decline recommend prosecution.

Further, to the extent PhilaHealthia would be based on the Ithaca model and experience, it does not appear to have a modicum of safeguards necessary to protect consumers in obtaining meaningful, reliable health coverage.

Safeguards provided through the Ithaca model are superior to those offered by “legitmate” insurers, and members are more reliably paid, regulation notwithstanding. See again: healthdemocracy.org/legislation.html.

Simply put, offering a limited set of benefits-- or more precisely, a limited, defined monetary payout, because there is no full indemnification for claims-- which has no actuarial basis for its rates, and then expanding benefits based on assumed increased membership, does not constitute a reasonable, affordable alternative to traditional coverage.

Insurers do not fully indemnify claims. Some major medical plans start paying at $5,000 or $10,000. Co-op plans can cover the uncovered part of such bills, paying from the first dollar.

We provided you with Ithaca’s detailed actuarial experience-- charts of injury frequency and payments during its first nine years. You have these.

You may perhaps regard coverage offered through these co-op plans as not “meaningful” because you earn $103,000/year, live surrounded by six golf courses, and enjoy the best health insurance taxpayers like ourselves can provide.

Because you cannot see us from Harrisburg, nor accurately assess how “meaningful” this minor coverage can be, nor how beneficial it may gradually become, you are herewith invited to speak to un-insured Pennsylvanians at a public meeting in Philadelphia.

We will suggest some dates and places.

cc: Nicole L. VanOrder, Deputy Attorney General
Ron Gallagher, Deputy Insurance Commissioner
Jacob Yanosky, Director, Bureau of Producer Licensing and Enforcement

REPLY TO COMMISSIONER JOEL ARIO

Dear Joel Ario,

After 3 years of fruitless negotiation with the Pennsylvania Insurance Department regarding the right of un-insured Pennsylvanians to form a health co-op, we have decided to protect ourselves notwithstanding.

As you are aware, the 1.4 million uninsured in this state suffer without medicine or cure, and die earlier. Our children are likelier orphaned, we likelier lose our homes and jobs due to medical conditions and costs.

Sixteen percent of Philadelphians have no health insurance. Five percent of our children have no health insurance. This is due to the greed of health insurance companies and failure of legislation and regulation.

Governor Ed Rendell said (2/5/08), “The cost of escalating health care coverage is crippling small business in Pennsylvania, and for growing numbers of our fellow citizens, lack of health insurance can literally be a death sentence.”

We have sent you evidence that the Ithaca Health Alliance, permitted in New York state, is a responsible model for paying specified health costs (ithacahealth.org), for those who cannot afford health insurance and who are not eligible for state or federal coverage. It is a minor medical plan helping preserve the dignity and small bank accounts of that state’s un-insured.

Ithaca’s Alliance is accountable to the New York State Insurance Department and is self-regulated according to standards such as those at healthdemocracy.org/legislation.html. These standards require transparency and democratic management found in no other health plan.

PhilaHealthia, in Philadelphia, requested permission to proceed as a pilot program regulated by PID according to these standards, but were prohibited by Terry Keating (8/4/08). His primary stated concern was that, in Ithaca, 1-5 members per month submitted claims not yet covered. Most of these are for misreading of the $20 dental rebate. Every member has had their covered emergency claims paid, and no member has complained in 12 years.

Mr. Keating remarked, in our last phone conversation (7/14/08), that Governor Rendell’s plan would take care of us. When? How long would you wait to protect your family?

Your Department has placed us in defiance of your authority by forcing us to choose between your regulations and our lives. We have begun an underground movement.

Let me put it this way. If there’s a severe drought and your family is thirsty, and the owner of the only water truck in town tells you that you can’t afford their water, then prohibits you from digging a shallow well, then the truck driver has got trouble.

Therefore, on _________ the enclosed press release will be sent throughout Europe, Canada, Asia, Africa, Latin America and the United States. Media will be invited to contact you and Mr. Keating, so you may explain why un-insured Pennsylvanians are not allowed to organize to help one another.

We have preferred to communicate with PID constructively and to provide documents requested. All our correspondence with PID is at healthdemocracy.org/pid.html. Our reply to Terry Keating’s 8/4/09 letter, and this letter too, are there also.

We asked for your counsel regarding a suitable corporate form. After three years we have nothing. We are un-insured. And we are taking action.

We have begun making a documentary movie of our efforts in Pennsylvania. My booklet “A Crime Not a Crisis: Why Pennsylvania Health Insurance Costs So Much” will be widely distributed, with your reply as latest chapter. We will broadcast the corruption of Pennsylvania insurers, legislators and regulators. Those risking our lives will become famous. Terry Keating, earning $103,000/year, living surrounded by six golf courses and a country club, and well-insured, will be particularly notable.

We invite you to meet these people in Philadelphia to publicly explain why you deserve the state’s best health coverage, paid for by taxpayers like ourselves, while we have none. As public servant, you are asked to tell us face-to-face why we cannot create an honest co-operative fund for preventive and emergency care.

Finally, because your Department has delayed us from developing independent health financing we will invite all uninsured Pennsylvanians to send copies of their medical bills to your office, and to Cigna, the killer of Nataline Sarkisyan.. When injured or ill, we will present ourselves for care at clinics relied upon by state regulators, legislators, and insurance executives who oppose universal health coverage. We are pushing to the front of the line.

Yours,

Paul Glover

cc:
Terry Keating
Governor Ed Rendell
Chakka Fattah
Kathy Mandarino
Philadelphia Area Committee to Defend Health Care
Health Care for All
media worldwide

I am a spokesperson for this group but am not a beneficiary. Nor do I hold the group’s member list or money.