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Governor seeks to control insurance premiums

Posted July 12, 2007 11:00 pm

Mike Ramsey and Doug Finke

As his proposal for near-universal health insurance languishes in Springfield, Gov. Rod Blagojevich on Thursday announced an administrative maneuver designed to control the cost of individual medical premiums.

Using the state insurance code, regulators under Blagojevich will draft a rule that prevents insurers from hiking a customer's premium based on someone's "health status," or medical condition. A second rule change - filed Thursday on an immediate, emergency basis - would require insurance companies to file quarterly financial disclosures about individual policies. A similar requirement will be created for small-group insurers, a spokeswoman said.

Blagojevich outlined the plans during a news conference at a Chicago hospital campus, where he was joined by health-care consumers who say they've been hit with skyrocketing insurance premiums. Lombard resident Roy Bocchieri said after he was diagnosed with a blood disease, the price of his premiums jumped when it came time to renew his individual policy.

"I think it's fair to say insurance companies shouldn't use someone's illness as an excuse to raise profits," Blagojevich said. "It's wrong, and we intend to stop it."

A national advocate for the insurance industry warned that Illinois, like other states that have tried to control premiums, would suffer "unintended consequences." Illinois insurers would pull out of the individual-policy market or raise baseline premium costs for new customers, according to Karen Ignagni, president and CEO of America's Health Insurance Plans.

"It's appealing rhetorically," she said of the governor's plan. "Unfortunately, the reality doesn't match the rhetoric."

The rule changes must pass a bipartisan legislative panel, the Joint Committee on Administrative Rules, before they can become permanent. Insurers would be permitted to consider rising medical costs when determining premiums for individual policies at renewal time, the governor's office said.

Blagojevich, a Chicago Democrat, insisted he is not abandoning his broader, multibillion-dollar plan to offer medical coverage to uninsured adults. That proposal's funding source - a controversial tax on business transactions - has been rejected by the Illinois House and is considered dead. Blagojevich said his rule changes would be "complementary" to his larger health-care goals.

The governor's appearance was the second time this week that he emerged in Chicago to draw attention from the overtime budget impasse at the state capital that pits him against House Speaker Michael Madigan, D-Chicago, and Republican leaders. On Monday, Blagojevich urged the Illinois House to pass a Senate gun-control bill - an obvious swipe at Madigan.

Madigan spokesman Steve Brown said the governor's travel schedule this week was curious, given the need for policymakers to be in Springfield.

"When the ADD (Attention Deficit Disorder) kicks in, he flits off to Chicago every couple of days," Brown said. "Absolutely, it's diversionary."

Madigan and the three other legislative leaders met in Blagojevich's office Thursday afternoon without the governor to discuss potential gambling expansion.

Madigan and House Minority Leader Tom Cross, R-Oswego, both favor a plan that allows existing casinos to expand their operations, with the gaming tax proceeds going to finance a construction-bond program.

Senate President Emil Jones, a Chicago Democrat allied with Blagojevich, supports a plan that lets existing casinos expand and adds up to four new casinos. He wants money from expanded gambling to pay for a variety of state expenses, including more money for schools.

Sen. Rickey Hendon, Jones' negotiator on a gambling bill, said the Democrats agreed to some compromises, including a provision that any Illinois city could bid on one of the new casino licenses. The original Democratic bill stipulated that new casinos would be in Chicago, Waukegan, near O'Hare International Airport and in the south Chicago suburbs.

"We're opening it up to every city in the state," Hendon said. "I think it's a good thing. You get more people, maybe, to vote for it if they are allowed to participate."

The Senate Democrats have not decided how many new casino licenses would be created. One would still go to Chicago, with either two or three available to the rest of the state.

Cross said the idea of adding that many new casinos is "probably too much" for House Republicans to accept, but he said the issue will be presented to them.

Blagojevich told reporters in Chicago that additional gaming is an option he may accept to raise revenue for his budget priorities, including increased education spending. He did not offer specifics.

"I have historically opposed an expansion of gaming," Blagojevich said. "I have said in the interest of compromise that if it means providing health care to families, I'll hold my nose and support that option."

Both Cross and Senate Minority Leader Frank Watson, R-Greenville, said the atmosphere of the budget meeting was different without the governor in the room.

"We had, without him there, kind of the more frank conversation we had to have," Cross said.

Added Watson: "It was a more businesslike meeting."

The old state budget ran out June 30, and Illinois government is operating this month through a short-term spending plan.

Mike Ramsey can be reached at (312) 857-2323 or ghns-ramsey@sbcglobal.net. Doug Finke can be reached at (217) 788-1527 or doug.finke@sj-r.com.

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