Editorial: This late, Illinois Covered can wait
Amid a budget stalemate, Gov. Rod Blagojevich is pressing lawmakers to pass Illinois Covered, a massive health care expansion. He won’t take no for an answer.
“There’s not going to be a budget resolution without a health care plan,” he told reporters last week, “whether we have to stay here through August to get it done or through September.”
Blagojevich deserves credit, on the one hand — the one he extended to lawmakers concerned about the program’s $3 billion price tag, funded by an unpopular gross receipts tax. He has proposed a scaled-back version which aides say will cost around $1 billion.
Blagojevich deserves chiding, on the other hand — the one he has over his eyes, blinding him to the inadvisability of expanding health care in a state that carries the nation’s largest unfunded pension liability, that lacks a capital budget to maintain infrastructure, that suffers a multibillion-dollar structural deficit, that barely meets its current health care obligations, particularly to Medicaid providers.
To be sure, Illinois Covered has great intentions. Affordable health care, or lack thereof, is a major issue for residents and businesses. But there are crucial concerns to consider before Illinois takes this leap. There is not enough time to do so in this protracted summer session.
One matter is the scope of Illinois Covered, which would serve two main groups: the very poor who don’t qualify for existing aid, and the lower-to-middle class who may have access to coverage but can’t or won’t pay for it. The first group clearly merits assistance. The other is tougher to handle. For many young adults, going without insurance is a choice, albeit an unwise one. In that regard Illinois Covered lacks teeth; unlike a similar initiative in Massachusetts, it doesn’t mandate that adults buy insurance.
Funding Illinois Covered is a concern, too. Blagojevich wants to raise $1 billion through a 3 percent payroll assessment on businesses that don’t spend at least 4 percent of payroll costs on employee health care. That would appear to target only the stingiest companies, as the average business spends about 8 percent of payroll on health care.
But there may be unintended consequences. Bloomington Sen. Bill Brady has warned that, since firms with fewer than 10 employees would be exempt, smaller companies might lay off workers to make the exemption (part-time workers would count toward payroll costs, too). Companies also may be tempted to drop health plans and let the state, or employees’ spousal insurance, pick up the slack. “We think that employers are pretty creative people,” cautions Doug Whitley, CEO of policy issues for the Illinois Chamber of Commerce, “because ultimately business decisions come down to financial decisions.”
Another concern is Illinois Covered’s mandate that private insurers produce affordable plans for residents to buy. Massachusetts passed a similar decree, but initial plan costs came back much higher than expected, with premiums up to $380 a month. It took time to get insurers to whittle costs.
Finally, an early analysis of Illinois Covered by the Civic Federation of Chicago pointed out the fallacy of relying on a first-year price tag: Medical inflation will drastically boost costs later, especially if the program succeeds. Peoria Sen. Dave Koehler, who has worked hard on this legislation, says Illinois “can’t afford not to do this.” But can Illinois afford to do it, long-term, given the financial canyon it’s already peering down into?
We’re wary of Blagojevich’s insistence that this pass, or else, much as he did in 2005 with the All Kids program, about which we’ve heard mixed reviews. Call it tenacity or call it stubbornness, it’s unbecoming in a governor who has helped drag the Legislature into its longest overtime session on record. Illinois needs a budget. Because the state’s leaders have dawdled, Illinois Covered can wait — the next state budget address is only six months away.
There’s plenty to do in the meantime. The Civic Federation suggested that Illinois should first look at streamlining its existing health care programs. Tucked into Illinois Covered are several such promises, including better chronic condition case management, lowered administrative costs and more efficient record-keeping. The state should pursue these now, and start reimbursing Medicaid providers on time.
Journal Star editorial board