Hundreds of thousands of low-wage workers in Illinois are enrolled in public health programs, adding hundreds of millions of dollars in medical costs to the state budget, according to a new report.
That means taxpayers are paying medical bills for these workers, most in service jobs, instead of the companies that hired them, experts said.
The scope of the problem is highlighted in the study from the Illinois Department of Healthcare and Family Services, released Friday. It reveals that 363,506 workers from 3,270 companies obtained medical benefits from Medicaid, KidCare and FamilyCare between August 2005 and March.
The cost of medical services received during that period: $335.7 million.
The report, a first of its kind for the state, puts a number on the hot-button issue of whether companies should be required to provide medical coverage. It is likely to be used by unions lobbying for new laws, and discounted by employers.
“When people are uninsured, everyone pays,” including Illinois taxpayers, said Anne Marie Murphy, who oversees the Illinois Medicaid program for the poor and disabled.
The study also looked at uninsured workers who get charity care at Illinois hospitals or who fail to pay all or some of their bills. Hospitals’ charity bills for these workers came to $77 million during a recent eight-month period.
Companies whose workers most often request subsidized care are a who’s who of the service industry, including Wal-Mart, McDonald’s, Burger King, Target, Jewel, Manpower and Kelly Services, according to the report. Also at the top of the list is the State of Illinois, which doesn’t offer insurance to workers who provide in-home care for the elderly.
“This goes far beyond Wal-Mart or any other service industry provider. It’s a much broader problem,” said state Sen. Jeffrey Schoenberg (D-Evanston), who sponsored legislation last year mandating the new report.
“The myth is that public health insurance has expanded because of individuals and families who have no employment. The reality is that enrollment is increasing because employers in retail and hospitality and other service sectors are failing to provide health insurance coverage to their employees.”
Businesses contend they do the best they can to provide benefits while trying to stay competitive.
“A lot of these folks are part-time workers and aren’t eligible for benefit packages. It is not the responsibility of the employer community to solve all of the financial issues in people’s lives,” said David Vite, president and chief executive of the Illinois Retail Merchants Association.
Long-term economic trends are behind the uninsured worker phenomenon. Most employment growth is in the service sector, where wages are low and health-care benefits are scarce. Faced with soaring medical costs, more employers have cut benefits or stopped offering health insurance, and it’s been clear some of these workers are ending up on public assistance.
Until now, data about the extent of this phenomenon in Illinois was unavailable.
Mandatory coverage sought
On the political front, unions have been trying to stir outrage over costs associated with uninsured workers. They want states to pass legislation requiring large companies to provide health insurance or pay into a public pool, said Naomi Walker, assistant director of politics and field operation for the AFL-CIO in Washington, D.C.
Last year, Illinois became one of nine states to mandate an annual state report on businesses whose employees receive medical benefits from public health programs and hospitals. Wal-Mart lobbied vigorously against the legislation, and other businesses believe it is fundamentally misguided.
The state compiled its report by matching data about public-health-program beneficiaries with data from state employers. Also, it asked hospitals to identify how many recipients of charity or discounted care listed an employer on aid applications. The information isn’t required, and fewer than 10 percent of charity patients gave it.
Wal-Mart tops list
Based on the incomplete data, the cost of hospital charity care to 1,132 patients who identified themselves as Wal-Mart employees during a recent 12-month period totaled nearly $2.5 million, more than any other Illinois employer. Total costs can’t be extrapolated from this partial data, experts warned.
Wal-Mart employs more than 45,000 people in Illinois.
Company spokesman Dan Fogleman said the retailer is improving benefits, most recently by cutting the waiting time for eligibility for insurance to one year from two years and adding a health insurance plan that costs as little as $11 per month.
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“We are doing our part as an employer to provide affordable, accessible and secure health insurance,” he said.
McDonald’s ranked No. 2 after Wal-Mart, with medical costs totaling $2.4 million for 1,248 uninsured who said they worked for the fast-food chain. The Oak Brook-based employer and its franchisees employ more than 10,000 in Illinois, the majority employed by franchisees who set their own wage and benefit standards.
“McDonald’s workforce is diverse and cannot be defined as a simple one size fits all,” the company said in an e-mailed statement. “It includes students, moms, dads and seniors who represent full-time and part-time employees and salaried managers in our restaurants.”
Workers at company-owned restaurants have access to health care, the statement said, but coverage for many young adult workers falls under their parents’ medical programs.
Target and Jewel Food stores ranked No. 2 and 3 after Wal-Mart among retailers whose workers depend on hospital charity care.
“This report is reflective of the much larger issue surrounding the accessibility of health care,” Target said in an e-mail.
A Jewel spokeswoman declined to comment because the company had not reviewed the report. But she said Jewel Osco paid more than $100 million in health-care benefits last year to workers in Illinois, where it employs more than 20,000.
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