In a significant policy change, Gov. Rod Blagojevich plans to shift 1.7 million Medicaid members to a form of managed health care next year–a move that he hopes will help finance a broad expansion of health insurance to children throughout Illinois.
The governor’s ambitious proposal would alter the way Medicaid oversees medical care and make Illinois the first state in the nation to offer coverage to all uninsured children.
For the first time, most Medicaid members would be required to select a doctor who would be responsible for managing all their medical care. Currently, patients on Medicaid can see any physician they like, and care management is virtually non-existent.
The program would save $57 million next year, and Blagojevich wants to use $45 million of that to extend health care coverage to uninsured children from middle-income families.
The governor, who has made health care a signature issue, said he would try to pass his plan in the legislature’s veto session this month and was “cautiously optimistic” about its prospects.
“It’s about time government did something to help [middle class families] … get health care for their kids,” he said.
Senate President Emil Jones (D-Chicago) and House Speaker Michael Madigan (D-Chicago) have signed on as lead sponsors.
But Republicans immediately questioned whether Blagojevich’s financial projections were reliable and whether his proposal was affordable.
“We are $1 billion already behind,” said Sen. Dale Righter (R-Mattoon), referring to the state comptroller’s request for $1.1 billion in short-term borrowing to help pay Medicaid bills. “Are we prepared to jump now into another obligation?”
The governor’s plan would subsidize health insurance to uninsured children living in families earning $40,000 to $79,999 a year. To qualify, children would have to have been uninsured for 12 months. Lower-income families already are eligible for health insurance through a program called KidCare.
The state would keep premiums for the new plan low by providing subsidies and negotiating favorable rates with drug companies and other suppliers. Families earning up to $79,999 annually would pay monthly premiums ranging from $40 to $70 per child for up to two children. Additional children would be covered at no cost for those who earn less than $100,000. Uninsured children in families with higher incomes could also join the All Kids program, but their families would pay higher rates for coverage and higher copayments for drugs and doctors’ visits.
Some 253,000 Illinois children have no health insurance, according to the Census Bureau. About half are eligible for KidCare. Nearly three-quarters of the remaining children live in families with incomes less than $80,000.
With rates for family coverage averaging $1,100 a month, private insurance is increasingly unaffordable for these middle-income families.
“I think many, many families will sign up,” said Jerry Stermer, president of Voices for Illinois Children.
Bianca Sanchez is just waiting for the chance. A single mother, she earns $34,000 a year–too much to qualify for Medicaid or KidCare, but too little to pay for $700 in monthly medications needed to control her 7-year-old daughter’s severe asthma.
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Sanchez weeps as she describes skipping doses of drugs she can’t afford and watching her daughter stay home from school “gasping” and falling behind her classmates. “This new program, it will be wonderful,” said Sanchez, who lives on the South Side.
Sen. Dave Syverson (R-Rockford), one of the original sponsors of KidCare, worries about that. He predicted Blagojevich’s proposal would make Illinois a magnet for families who have trouble getting insurance for severely ill children in other states.
“There will be a significant migration” to Illinois, Syverson said. “Where’s the government going to get the money from to pay for that?”
Righter said he was concerned that employers providing health coverage might drop their benefits and let the state pick up the tab, resulting in large unexpected expenses.
Blagojevich argues that the new All Kids program wouldn’t cost much, because of another major change: the shift of all but the poorest and most frail Medicaid members into a form of managed care known as “primary care case management.”
If the trade-off of more managed care is extending coverage to children, it’s worth it, the governor said.
Under primary care case management, 1.7 million Illinois Medicaid members would have to select a primary-care physician (the name of the Illinois health insurance program as published has been corrected in this sentence and in a subsequent reference in this text). That doctor would become a gatekeeper who would oversee patients’ access to services. The goal is to make sure Medicaid members get basic care and don’t end up as often in hospitals or emergency rooms.
Nationally, 29 states have similar Medicaid care-management programs in place. Research shows the programs typically produce savings for a several years, but those level off, said Diane Rowland, executive director of the Kaiser Commission on Medicaid and the Uninsured. By making sure Medicaid members have personal doctors, often the plans improve the quality of care, she said.
Though “the devil will lie in the details, we’re pleased with what we’ve been told about how the Illinois’ program will work,” said Barbara Otto of Health & Disability Advocates, a Chicago firm that sued the state of Illinois in Cook County for failing to provide needed care to children (this sentence as published has been corrected in this text). HMOs are a more stringent form of managed care than primary care case management.
“We’ll all have to make sure these arrangements work well and don’t end up skimping on care in any way,” said Stermer, “but I’m optimistic.”
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All Kids premiums
Any family with uninsured children could join All Kids under the governor’s proposal. Upper-income families would pay the full cost of insurance for each child. Families earning less than $80,000 would have premiums subsidized. To qualify, most children would have to have been uninsured for 12 months. There also would be copayments for drugs and visits to doctors, emergency rooms and hospitals.
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Family income Monthly**
$40,000-$59,999 $40*
$60,000-$79,999 $70*
$80,000-$99,999 $100*
$100,000-$119,999 $150
$120,000-$139,999 $200
$140,000-$159,999 $250
$160,000 and up $300
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