The state of Pennsylvania's local Blue Cross/Blue Shield plans association has agreed to pay $85 million per year to cover an extra 29,000 citizens in the state's low-cost insurance plan for low-income residents.

The plan, which already covers 39,000 people and has a waiting list of over 100,000, is designed to ensure that those who cannot afford health insurance are still covered. According to the most recent statistics taken, 11% of Pennsylvania residents do not have health insurance.

The announcement was made by the state governor, Ed Rendell, who also revealed that the collaboration of Blue Cross/Blue Shield health insurers would contribute another $65 million a year toward community health centers and other programs for six years, making the total deal worth $1 billion.

The deal comes shortly after the Blue Cross/Blue Shield organization, which is a non-profit outfit, was criticized for holding billions of dollars in cash reserves by state officials. However, Rendell said the new announcement was unrelated to that issue.