Loan Forgiveness Legislation
Please read the amended legislation - follow this link to the amended HB 1: http://www.legis.state.pa.us/CFDOCS/Legis/PN/Public/btCheck.cfm?txtType=PDF&sessYr=2009&sessInd=0&billBody=H&billTyp=B&billNbr=0001&pn=2098
Chapter 5 spells out the Loan Forgiveness program amendment.
Salient points:
- Primary Care physicians and OB/Gyn eligible
- Contract is a comittment to practice in PA for 10 years after completion of training.
- There is some preference for practice in underserved communities and for state residents from an in-state residency program
- Both full and part-time physicians can qualify
- Program to be administered by PHEAA
- Funding proposed to come from Healthcare Provider Retention Account
- Loan forgiveness paid is not taxable as income
- Yes, there is a heavy penalty for not completing the 10 year commitment repayment of loan repayment to date plus interest; PHEAA can garnish wages to recover penalties
"(9) A PHYSICIAN WHO FAILS TO BEGIN OR COMPLETE THE
OBLIGATIONS CONTRACTED FOR SHALL REIMBURSE THE COMMONWEALTH
ALL AMOUNTS RECEIVED UNDER THIS CHAPTER AND INTEREST THEREON
AS DETERMINED BY THE AGENCY."
In the coming weeks, as our legislators are battling over balancing the state budget for the next fiscal year, important decisions about state healthcare reform will be made. Stay tuned.
Meanwhile, Pennsylvania's Loan Repayment Program (run by the Dept of Health) has been in operation since 1991. Just last year, a very significant expansion of the program was funded to allow a maximum of $114,000 in loan repayment for a 6 year practice committment to a physician shortage area. For the first time in its history, the program filled all available positions this spring, and will reopen for new applications on July 1, 2009.
The PA LRP offers contracts initially for 3 years, with option to stay for a 4th, and another (new) option to stay on for 2 more years for a maximum of $114,000 in Loan Repayment. There are opportunities to leave at the conclusion of each contract, without peanalty. Even so, the program has a great track record of recruiting and retaining physicians in practice in Pennsylvania's underserved areas. For more on the program, visit: http://www.dsf.health.state.pa.us/health/CWP/view.asp?A=169&Q=204515
