Reframing the Debate by fionan


									John P. Garven, CLU, RHU
            2004-2005 State Leg Chair
  Illinois State Assoc. of Health Underwriters

2005 Illinois Healthcare Issues

Heartland Capital Forum - April 7, 2005
  Quality Inn & Suites, State House
         Springfield, Illinois
• 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
• 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
    –     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

•   Website:
    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

•   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

•   On February 2nd SB 150 was introduced. It aims to…

       •    Reduce unwarranted lawsuits;
       •    Cap non-economic damages, while preserving unlimited economic
       •    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

• 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
• 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.
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

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 ( is an
  initiative started by Citizens Action ( 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
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.”
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.

To top