John P. Garven, CLU, RHU 2004-2005 State Leg Chair Illinois State Assoc. of Health Underwriters firstname.lastname@example.org 2005 Illinois Healthcare Issues Heartland Capital Forum - April 7, 2005 Quality Inn & Suites, State House Springfield, Illinois Agenda • Health Care Justice Act (Public Act 93-0973) • Illinois Health Care Consumers Right to Know initiative (HB 2343 / SB 1863), aka HealthCHECK (Consumers for Healthcare Effectiveness & Cost Knowledge) • Medical Malpractice (SB 150 / HB 705) • The uninsured • HSAs and the uninsured • Healthy Illinois Plan (modeled after Dirigo) Health Care Justice Act • Signed into law by Governor Blagojevich on August 20th of 2004. Public Act 93-0973 calls for the following: – provides that it is a policy goal of the State to ensure that all residents have access to quality health care at costs that are affordable; – provides that the State is strongly encouraged to implement a health care access plan of some kind; – provides for the formation of an Adequate Health Care Task Force to seek public input on the development of the State's health care access plan; – requires a final report by March 15, 2006; and – provides that by no later than December 31, 2006, the General Assembly is “strongly encouraged” to vote on legislation that either enacts the Task Force's recommendations or provides for another health care access plan of some kind, with implementation of such by possibly as early as July 1, 2007. Health Care Justice Act • After starting out during the 2003 spring legislative session as clearly an effort by some interest groups to implement government-run healthcare in our state, the best way now to characterize the HCJA is it is a study that has been commissioned by the General Assembly. • Structure of the Adequate Health Care Task Force - Each of the 4 legislative leaders have 6 appointments to the task force members, and the Governor has 5 (total of 29). • Also, the Directors of the Departments of Public Health, Aging, Public Aid, and Insurance, and the Secretary of Human Services or their designees shall represent their respective departments and shall be invited to attend Task Force meetings, but not be voting members of it. Appointments to the Adequate Health Care Task Force to date • Governor Blagojevich (3 of 5 so far): • Jim Duffett, Campaign for Better Health Care, Urbana • Jan Daker, United Congregations of Metro-East, Belleville • Tim Carrigan, staff nurse at University of Illinois Medical Center, Chicago • Senate Pres. Emil Jones: • Sen. Donne Trotter, Chicago; • Sen. Iris Martinez, Chicago; • Margaret Davis, Health Care Consortium of Illinois, Chicago; • Colleen Kennedy, St. Francis Blue Island Hospital, Blue Island; • Dr. Quentin Young, Health and Medicine Research Group and Physicians for a National Health Program, Chicago; and • Robyn Gabel, Illinois Maternal and Child Health Coalition, Chicago. • Senate Minority Leader Frank Watson: • Gregory S. Smith, Group Marketing Services Inc., Lincoln; • Catherine Bresler, Morton Grove; • James M. Moore, OSG Healthcare System, Peoria; • Pamela D. Mitroff, Wheaton; • Kenneth Smithmier, Decatur Memorial Hospital; and • Wayne Lerner, Rehabilitation Institute of Chicago • House Speaker Michael Madigan (3 of 6 so far): • Dr. Arthur G. Jones, Lawndale Christian Health Center; • Chicago; Dr. Anthony Barbato, River Forest; and • Dr. Joseph Orthoefer, Rockford • House Minority Leader Tom Cross: • Ken Robbins, Illinois Hospital Association, Naperville; • Joe Roberts, insurance representative/agent, Sandwich; • Mike Murphy, Unicare, Springfield; • Representative Elizabeth Coulson, Glenview; • Andrew Melczer, Illinois State Medical Society, Chicago; and • Dr. Craig Bakes, Illinois State Medical Society Health Care Justice Act • Public hearings will be held in each of the 19 congressional districts between now and November 30, 2005. No hearings have yet been scheduled. • A web-page will be created to inform the public concerning the progress of the task force and its meetings. • An independent research firm will be retained, subject to appropriation or the availability of funds, to assess the different options and models being debated. • The Task Force’s final report (by March 15, 2006) - will recommend a set of recommendations that: • ensures access to a range of preventive, acute and long-term health care services; • maintains and improves the quality of health care services; • provides portability of coverage, regardless of employment; • provides core benefits for all Illinois residents; • contains cost containment measures and has a cost analysis for the plan; and • promotes affordable coverage options for small businesses. HB 2343 & SB 1863 – Illinois Health Care Consumers Right to Know initiative • Health care prices and performance vary widely from one health care facility to the next. Although the State of Illinois is required to collect and publish hospital price and performance data, there are no similar requirements for the state’s ambulatory surgical treatment centers even though a majority of surgeries are now performed on an outpatient basis. • If enacted, the "Illinois Health Care Consumer's Right-to-Know Act“, also known as HealthCHECK (Consumers for Healthcare Effectiveness and Cost Knowledge), will require Illinois’ hospitals and outpatient health care facilities to disclose: • Average charges for thirty (30) established outpatient procedures, and • Number of times the facility has performed those procedures during the previous year. • Bill status as of April 6th: HB 2343 unanimously passed the House on March 16th, and SB 1863 is scheduled for its third reading in the Senate on April 6th. Given the unanimous passage of the bill in the House, the bill is expected to easily pass the Senate as well, and be enacted. • Website: ilhealthcheck.com Medical Malpractice Reform in Illinois • In March of 2004 the U.S. Chamber of Commerce's Institute for Legal Reform released its 2004 State Liability Ranking Study. Illinois was named the seventh worst state in the country based on the way courts treat businesses. • In this same study, two county court systems in Illinois--Madison County and Cook County--were ranked as the nation's 3rd and 5th worst jurisdictions. And, Illinois also ranked among the five states most likely to award excessive punitive damages. • In 2004 the American Tort Reform Association named Illinois' Madison County as the "No. 1 Judicial Hellhole" nationwide. • Following a highly publicized (and heavily financed) judicial campaign, last fall Judge Lloyd Karmeier defeated Appellate Judge Gordon Maag of Madison County during the General Election for a seat on the Illinois State Supreme Court. It is hoped that Judge Karmeier’s election to the Court may shift its balance once tort reform is eventually enacted by the legislature (so that any law containing caps will not get struck down as it already has twice before). • On January 5th of this year, President Bush chose Collinsville in Madison County as his venue for delivering a major policy speech on the subject of medical malpractice reform. Medical Malpractice Reform – SB 150 & HB 705 • Keep Doctors in Illinois: To raise awareness of the risks facing Illinois doctors and their patients, green “Keep Illinois Doctors in Illinois” wristbands were incorporated into the Illinois State Medical Society’s public information campaign promoting medical malpractice insurance reform. Over 25,000 wristbands have been distributed so far, including one to President Bush during his visit to Illinois in January. http://www.realitymedicine.com/ • On February 2nd SB 150 was introduced. It aims to… • Reduce unwarranted lawsuits; • Cap non-economic damages, while preserving unlimited economic damages; • Enact insurance reforms; • Enhance medical discipline; • Allow annuity payments for awards; • Protect doctors’ personal assets; • Limit the liability of hospitals in cases where the individual responsible for malpractice is not an employee of the hospital. • Several House Democrats and Republicans have also signed on as sponsors of an identical measure, HB 705, in the House. More on Medical Malpractice Reform • On February 3rd during his “State of the State” address, Gov. Blagojevich acknowledged the need for medical malpractice reform that protects the personal assets of doctors, preserves the rights of injured people to bring claims, and that makes sure insurance companies reduce their premiums. He stated that reform "is going to require sacrifice and leadership." • Just before adjourning for spring break and less than an hour before the Senate Judiciary Committee was to meet to begin debating the measure, on March 17th Senate Bill 150 was yanked from the Judiciary Committee and sent to the Executive Committee. The move came just two days after a promised vote had been delayed by the Judiciary Committee's Co-Chair, John Cullerton. • Notwithstanding this most recent development in the Senate, many Democrats in both chambers are under pressure from constituents to finally do something this year with medical malpractice reform. It will be interesting to see what, if anything, that House Speaker Madigan and Senate President Jones will be able to get in terms of concessions on this issue from the Illinois Trial Lawyers Association, one of the strongest lobbyist groups in Springfield. The uninsured WHO ARE THE UNINSURED? • Indigent and working poor (under 200% FPL) • Citizens who are ineligible for public programs, including workers who decline group health coverage offered to them at work • People who can afford insurance but simply choose not to buy: Self-Insurers • Persons temporarily without insurance, including those between jobs who do not elect COBRA or state continuation past the coverage continuation election period • Undocumented immigrants • Persons with religious (i.e., Amish) or holistic beliefs Are there 45 million uninsured? • About 1/3 of the “uninsured” (15 million) are reachable through existing public programs, such as Medicaid and the SCHIP program for children. • 1/5 (9.3 million) earn $50,000 or more and may be able to afford coverage. More than ½ of this group earn $75,000 or more. • As many as 5.5 million are between jobs or are recent college graduates, can actually afford insurance, but choose to go without. Sources: 2004 Census Current Population Study (CPS) and Blue Cross Blue Shield Association Congressional Budget Office. “How Many People Lack Health Insurance and For How Long?” May 2003. http://www.cbo.gov/showdoc.cfm?index=4210 How Many Uninsured in the U.S.? 45,000,000 “Uninsured” (Aug., 2004 Census Bureau report) - 15,000,000 “Public Program-Insured”(But not signed-up) - 9,300,000 “Self-Insurers” making > $50k/yr. - 5,500,000 Temporarily uninsured (But can reasonably afford insurance) - 1,200,000 Decline to insure for noneconomic reasons __________ = 14,000,000 Chronically Uninsured Americans Sources: National Institute for Health Care Management for Robert Wood Johnson sponsored project. U.S.Census Bureau, 2002; BCBSA analysis Illinois Health Care Options Matrix As an education outreach to the public at large, the Illinois State Association of Health Underwriters (ISAHU) has developed a consumer- oriented brochure that it calls the “Illinois Health Care Options Matrix”. This brochure may be viewed at http://www.isahu.com/Illinois_Health_Care_Options_Matrix.pdf. The purpose of the Matrix brochure is to educate, inform, and hopefully enlighten the public about our current health care financing system and provide a fairly easy-to-grasp overview as to how the numerous public/private programs relate to each other. Interested parties are encouraged to make use of these brochures with their colleagues, friends, neighbors, legislators, community leaders, anyone whom they have influence with. HSAs and the uninsured • Nationally, 43 percent of applicants lacked health coverage at the time they applied. HSA plans appear to be bringing more people into insurance than many other traditional health insurance products. • At a Smith Barney CitiGroup conference on March 31st in Washington, DC, and later a Lehman Brothers event that same day, Aetna CEO Jack Rowe was quoted as saying that health savings accounts are turning out to be far more successful than first envisioned, with strong interest among small employers and individuals, and a growing interest among large companies that got into the game late because of the timing of industry HSA guidances. • Aetna’s 2004 experience with HSAs: About 33 percent of its customers signing up for HSAs in 2004 did not have prior health insurance -- encompassing both individuals and those whose employers did not offer the benefit. “If this persists, this will identify HSAs as one of the approaches to helping the problem of the uninsured," he told the Smith Barney audience. "It's turning out to be a mechanism that many of us did not fully appreciate." Healthy Illinois Campaign (modeled after Dirigo) • The Healthy Illinois Campaign (healthyillinoisplan.com) is an initiative started by Citizens Action (citizenaction-il.org) with significant financial backing from the Service Employees International Union (SEIU) that is promoting a model for healthcare in Illinois that is not dissimilar to the Maine Dirigo plan. No legislation has yet been proposed that incorporates this concept. • The Campaign’s “fact sheet” states the following: “The primary aim of the Healthy Illinois Campaign is to develop and pass legislation that would make quality, affordable healthcare available to small businesses, self-employed individuals, and all other uninsured residents. If enacted, Healthy Illinois would invite the vast majority of Illinois’ 1.8 million uninsured people to join a statewide insurance plan.” Healthy Illinois Campaign (modeled after Dirigo) • There seems to be an utter lack of detail about how such a plan would work. A basic premise of the plan clearly has some “flawed” logic to it – “The state would be able to negotiate affordable premiums on behalf of the membership pool because the massive size of the pool would give the state considerable bargaining power and insurance risk would be spread across a wide population.”. • Further, the Campaign’s website promotes the notion that participation in the Healthy Illinois Plan (HIP) would be voluntary, and businesses and individuals could keep their current coverage. • Question: Why would Illinois, which has had (and continues to have) a fairly competitive health insurance market (both individual and group), want to model its healthcare after a state that has done everything it can, and then some, to destroy its private market over the last 15 years? Dirigo Health Plan • Proposed by Maine Governor Baldacci, the Act was signed into law in June 2003. The purpose of the Act is to work toward a system of universal healthcare by 2009 (Be sure to read NAHU’s analysis of Dirigo.). • Anthem Blue Cross and Blue Shield and its network of appointed insurance producers/agents began selling DirigoChoice to small businesses and self-employed individuals beginning October 4, 2004, with coverage beginning January 1, 2005. Marketing to individuals began in February with coverage starting April 1, 2005. • Results so far? “Dirigo health plan a disappointment Tuesday, January 25, 2005 - Bangor Daily News”: • “DirigoChoice is the premier example of what happens when well-intentioned bureaucrats design an insurance product for a group that they totally don't understand - small businesses. Here are just four of the reasons why small businesses are rejecting DirigoChoice.” Dirigo Health Plan 1. “DirigoChoice is still expensive for small businesses, which must pay 60 percent of the employee-only premium for all their employees (about $2,230 a year).” 2. “DirigoChoice is inflexible.” 3. “Simplicity is key to reaching small businesses. DirigoChoice is the most complex health plan on the market.” 4. “Employees must provide significant confidential information to qualify for premium subsidies, and employers are in a difficult position of helping their employees provide information to the state that is illegal for them as employers to know.” Conclusions 1. With all that is going on in our state, between the Health Care Justice Act and Healthy Illinois, over the next couple years our citizens are going to firsthand see the “push and pull” between the conflicting philosophies of those who advocate more government control in healthcare versus expanding free markets. 2. HSAs are making a difference with the uninsured. Further, citing data from e-HealthInsurance, in 2004 more than 40 percent of singles and 53 percent of families setting up HSAs had household incomes of $50,000 or less. So much for the notion that “HSAs are a tax break for the wealthy”. 3. We need to do all that we can to educate the public about the availability of a myriad of already existing federal, state and local healthcare access and affordability programs. It is ISAHU’s hope that the “Illinois Health Care Options Matrix” is a step in that direction.