Budget Balancing Tactic Creates Concern In Pennsylvania

Aug 2, 2017

HARRISBURG (WSKG) -- A fund transfer lawmakers are proposing to help balance the state budget is causing some legal headaches. The Professional Liability Joint Underwriting Association--a group created in 1976 to insure healthcare providers--is saying the state is not authorized to take $200 million from its account.  

Credit David Wilson / Flickr

It's a conflict that first cropped up last year, when the cash-strapped legislature decided to move $200 million dollars from the JUA's surplus to the general fund.

The group said it was inappropriate, and filed suit.

Association President Susan Sersha said the state never invested in the JUA after it was established, and as far as she is concerned, its current funds are private.

"All of the money that we have received, we have collected via premiums," she said. "These are predominantly individuals who paid this money in to receive insurance, and we don't think the state has a right to those funds."

The JUA's suit successfully stalled the transfer, and it didn't happen during the 2016-17 fiscal year, adding $200 million to the commonwealth's shortfall.

But now lawmakers are trying again. Language transferring the money was included in the Senate's recent revenue proposal, along with a clause that would dissolve the JUA if it doesn't comply.

A Senate GOP spokeswoman Jenn Kocher defended the transfer, saying few physicians rely on coverage from the association anymore, and that it doesn't need its surplus.

Sersha maintained that insurers always need a surplus.

She said if the transfer passes again, the JUA will renew its legal action.