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Revised health insurance plan passes Senate committee

Posted July 25, 2007 11:00 pm

Dana Heupel

A legislative committee lent a hand Wednesday to Gov. Rod Blagojevich's push to offer health insurance for all Illinoisans, recommending that the full Senate pass a revised version of his proposal.

The latest Illinois Covered program would be financed solely through an assessment on businesses that do not offer health insurance to their workers.

That assessment would raise about $1.2 billion in the first year, Michael McRaith, director of the state Division of Insurance, testified before the committee.

"Today we're one step closer to giving working people all over Illinois access to health coverage they can afford," Blagojevich said in a prepared statement.

"Today's action in the Senate Public Health Committee shows that we can work together and compromise on how we achieve our goals - but we are not going to compromise on our core principles."

Blagojevich's insistence on a universal health insurance plan has been a key factor in the current state budget stalemate. An earlier attempt to fund it through a tax on gross business receipts failed by a 107-0 vote in the Illinois House.

The sponsor of the legislation, Sen. Carol Ronen, D-Chicago, said the revised version is "more streamlined, more effective and more constrained by cost."

One part, called Illinois Covered Assist, would provide those who earn less than the federal poverty level - $10,210 for an individual or $13,690 for a couple - access to about 300 community health centers across the state, Ronen said.

Community health centers are local non-profit organizations, such as Capitol Community Health Center in Springfield or Heartland Community Health Clinic in Peoria, that primarily serve low-income patients.

"It picks up people that are now outside the system; there is no safety net," said Sen. Dave Koehler, D-Peoria, who served on a task force that offered recommendations to the Blagojevich administration about various health-care options.

Another part of the revised program, Illinois Covered Choice, would require insurance companies to offer low-cost policies to uninsured individuals or employers with up to 25 workers. Those with incomes below 300 percent of the federal poverty level - $60,000 for a family of four - would qualify for state rebates of up to $5,000 for premiums they paid.

A third part of the proposal, Illinois Covered Rebate, would help pay premiums for low-income families who have employer-sponsored health insurance. They could qualify for rebates of up to 20 percent of the premium costs.

"This program is about helping people who have health insurance but are struggling to pay their bills," Ronan said.

The legislation also would require insurers that offer coverage for dependent children to provide it through age 29. And it would expand the income requirements for the state's current Family Care program from 185 percent to 300 percent of the poverty level.

Businesses with 10 or more full-time workers that don't spend at least 4 percent of their payroll on health insurance for their employees would be assessed 3 percent of their payroll. The $1.2 billion those assessments raise would be placed into a trust fund that would pay for the medical services. The state could not spend more than 90 percent of amount in the fund to cover payments.

Opponents of Illinois Covered, such as the Illinois Chamber of Commerce, say it targets the most economically vulnerable businesses. Todd Maisch, who represented the Chamber before the committee, said most small companies that don't offer health insurance to their employees simply cannot afford to. Others may hire mostly seasonal employees, he said, pointing to businesses such as Knight's Action Park and Water Adventure in Springfield.

Sen. Bill Brady, R-Bloomington, speculated that if Illinois Covered were enacted, many small businesses would simply split into separate companies or lay off workers to fall under the 10-employee limit.

The revisions to Senate Bill 5 passed the committee Wednesday on a partisan 7-4 vote, with Democrats in the majority. If the legislation passes the Democrat-controlled Senate and House and is signed by Blagojevich, the Illinois Covered program would begin June 1, 2008.

It would be phased in during the first year, and Ronen estimated it would cover 600,00 to 700,000 currently uninsured Illinoisans during that period. About 1.4 million Illinoisans have no health insurance, according to state estimates.

"We're not going to initially get as big of a program or enrollment as we'd like," McRaith said, but as the availability of funds increases, restrictions could be relaxed to cover additional uninsured residents.

The cost of Blagojevich's original Illinois Covered proposal was estimated at about $2.1 billion annually.

Dana Heupel can be reached at (217) 788-1518 or dana.heupel@sj-r.com.

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