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Employers: Be Informed, Speak Out on
Illinois Health Care Cost Concerns
ALERT! Your input is sought at the bottom of this
message.
Preface:
Illinois Chamber members need to be aware that as the
result of legislation passed two years ago the Illinois
General Assembly will receive a report this fall from the
Adequate Health Care Task Force that is likely to recommend
billions of dollars of increased costs for Illinois employers.
The Health Care Justice Act directed the Task Force members to
propose solutions for meeting the healthcare needs of the
state’s 1.8 million uninsured persons. The preliminary draft
report was available today.
The 29 Task Force members
were appointed by Governor Blagojevich and the four
legislative leaders. Regrettably, employers (those who
currently pay for the bulk of healthcare expenses) were
severely under-represented in the Task Force make-up. There is
not a single member present to represent an employer’s
perspective soley as a purchaser of health care benefits for
its employees.
The Task Force’s preliminary report
recommends an employers’ mandate to assume a 1.4 billion
dollar healthcare tax. The tax would apply to employers who do
not provide at least $2500 in healthcare coverage per employee
per year. The Task Force goes on to identify billions of
additional healthcare costs that the state should cover, but
does not specifically identify the source of the revenue.
Given the Governor’s no tax pledge for individuals and his
history of expecting more and more revenue from employers, it
is predictable that, if the state’s Democratic leaders who
currently occupy all offices of political power in our state
choose to move forward with the Task Force recommendations,
employers will be the target for a huge increase in the cost
of doing business in this state.
Task Force members
are expected to consider the preliminary report at a meeting
scheduled for September 26 in Chicago. You may obtain a copy
of the Task Force report and view a list of Task Force members
by visiting the Task Force web site, http://www.idph.stateil.us/hcja/index.htm.
Publicly financed healthcare is a compelling issue for
all of us. One of every 6 people in Illinois receives
healthcare covered by taxpayers, and 2 of every 5 births are
covered by Illinois’ Medicaid program. Since 1999, Medicaid’s
average annual costs have grown 8.2% while total state
expenditures have grown 3.4%. This year, for the first time,
state expenditures of $8 billion on healthcare will exceed the
amount allocated for education.
Enrollment in state
government-financed healthcare for people under age sixty-five
has risen to an all-time high. The state continues to pursue
expanded coverage, including expensive proposals to cover 1.8
million uninsured residents.
Healthcare expense is a
crucial issue for employers, but all taxpayers should be
concerned about the state’s current approach to providing
healthcare. Ever-expanding healthcare programs and costs
cannot be sustained in Illinois’ current fiscal condition.
The state’s reimbursement rate to healthcare providers
is substantially below the actual cost of service. The state
also fails to pay its obligations in a timely manner. The
current backlog of $3 billion in deferred payments to
healthcare providers is unprecedented, resulting in financial
hardship and forced borrowing by the medical community and
their vendors.
Employers pay higher insurance premiums
because the state’s inadequate payment rates and grossly
delayed payment cycle imposes a hidden Medicaid tax. As long
as medical providers are underpaid and their payments are
severely delayed by Illinois’ Medicaid system, they are forced
to recoup these losses from insured employees and private
payers.
Public policy decisions on healthcare issues
demand attention. The gubernatorial election offers
contrasting approaches.
Governor Blagojevich embraces
a traditional big government solution. He welcomes more and
more people into government-funded healthcare and expands
programs while relying on the federal government to assume a
portion of the costs. The “AllKids” initiative is a bold
expansion of existing state insurance options that has caught
public attention, but its impact is unproven. The
administration was slow to embrace managed care elements for
the Medicaid population. The most troubling legacy issue is
the lack of fiscal integrity that comes from constantly
raising the public’s expectations of government healthcare
programs without having money to pay for them. Even so, the
Governor has obviously made healthcare a priority during his
first term and is expected to continue to do so if re-elected.
Treasurer Judy Barr Topinka’s plan for Medicaid begins
with a focus on management and cost containment initiatives.
She is committed to reduce payment delays and increase
reimbursement to providers. Her approach is to use savings
realized by applying managed care principles common in the
private sector to Medicaid patients.
Reducing payment
delays and increasing reimbursement levels to providers should
enhance access for Medicaid recipients because doctors and
hospitals will be more willing to accept Medicaid patients.
Reliable fiscal practices should benefit employers by
diminishing the need for the hidden employer’s Medicaid tax
now imbedded in insurance premiums.
Treasurer
Topinka’s philosophy is that taxpayers should only pay for
healthcare assistance devoted to the truly needy in Illinois.
She intends vigorous review of Medicaid eligibility and
recommends an income eligibility cap for “AllKids” of
$100,000. Topinka is critical of the Blagojevich
administration decision to adopt “presumed eligibility”, a
loose standard that opens the door to manipulation and abuse.
Judy Baar Topinka intends to align the WIC (Women
Infant Children) nutrition program with Medicaid eligibility.
This can promote better health for children since they
comprise a substantial portion of the served population;
because it is a preventive approach, it is expected to
contribute to the cost savings. Although perfectly sensible,
this has never been done because the programs’ databases
aren’t compatible enough to be useful. The Topinka plan would
resolve technical incompatibility so that children’s’ health
isn’t compromised because of computer problems.
The
Topinka plan has a risky component too, but it demonstrates
willingness to experiment with management emphasis by seeking
the first-ever Medicaid block grant from the US Department of
Health and Human Services. A block grant will provide
incentive to better manage taxpayer dollars by controlling
expenses and promoting efficiency. More importantly, such an
approach acknowledges that expanding and uncontrolled costs
portend inevitable fiscal disaster. If the federal government
approved such an approach, it would challenge the Topinka
administration to improve performance and provide a model for
other states wrestling with uncontrollable healthcare
expenses.
Neither candidate has offered campaign
statements regarding how Illinois should respond to the
uninsured population’s needs. Employers should watch this
issue: any solution that gains political traction in Illinois
will have a multi-billion dollar price tag.
CHAMBER
MEMBERS, PLEASE RESPOND TO THIS MESSAGE
I need to know what business owners, executives and
human resource professionals think about healthcare issues and
the role of public policy in addressing employers concerns. I
am especially interested in how you think the state should
respond to the needs of a growing population of uninsured
individuals. The Chamber welcomes your response to this
message because we want to know what the members think. The
employer’s perspective must receive greater attention. Your
Illinois Chamber is prepared to help communicate the
employer’s perspective in the emerging public debate that will
follow the release of the Task Force report.
I would
remind you that the Illinois Chamber’s Healthcare Council is
the member forum where public policy and healthcare issues are
addressed. If you wish to learn more about the Chamber’s
Healthcare Council, you may view the Council’s charter on our
web site. The Chamber’s Healthcare Council is eager to have
more participation from employers. |
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