From the Peoria Journal Star:

Health care, but at what cost?
Recent state program expansions may cover more people, but delayed payments mean fewer providers participate

Monday, November 19, 2007
BY AARON CHAMBERS

OF GATEHOUSE NEWS SERVICE
SPRINGFIELD - Rachel Mackey of Rockford is a clerk for a local government agency who earns too much to enroll her children in Medicaid but not enough to pay for private health insurance.

That was the case, at least, before All Kids, a state program launched in July 2006. It made discounted health care available to all Illinois children, regardless of family income.

Mackey, 31, enrolled her daughter, Amethyst, 10, and son, Ahmad, 4. The coverage freed Ahmad, who has asthma, from a breathing machine, and he now carries an inhaler.

"When he goes to visit with his grandparents, I don't have to worry about packing that big old machine," she said. "It really helps."

All Kids was the centerpiece initiative of Gov. Rod Blagojevich's first term, what he calls a model of success. But critics are concerned about its shortcomings. They say payments are often delayed to health-care providers and reimbursement rates are low - limiting the number of providers willing to participate, thereby limiting the class of children who may receive the care.

But as Blagojevich pushes for even more state-subsidized health care, lawmakers and others say the state should first straighten out the programs it already has.

The governor's latest proposal called for subsidized health care for every uninsured adult. Yet the state's core health-care program, Medicaid, is on track to burn through all its annual spending authority well before the end of the fiscal year.

"No one is against universal health care," said Rep. Chuck Jefferson, D-Rockford. "But we're saying we have to take care of the programs that are already in place."

All Kids provides health insurance for at least 54,000 children who were not eligible for previously existing programs, according to a recent analysis.

'Implementation problems'

There are also questions about whether the Blagojevich administration successfully implemented the two initiatives it said would save the money needed to fund All Kids.

By requiring All Kids and Medicaid enrollees to join primary-care case management and disease management programs, the administration planned to save about $56 million over the first year of All Kids, which was expected to cost $45 million annually.

Those two managed-care initiatives are designed to reduce emergency-room use and referrals to specialists, help patients stay healthy and make it easier for patients to find doctors willing to accept payment from the state.

In August, a report by the California-based Kaiser Commission on Medicaid and the uninsured said those initiatives had "implementation problems." It warned that successful implementation "is critical for the program's long-term viability."

The administration said it had phased in both initiatives, but it acknowledges a mandatory referral system won't be in place until at least early next year. That system, under which patients in primary-care management are prohibited from seeing providers out of network, is key to controlling costs.

Increasing state health care

Just as he did with All Kids, Blagojevich is determined to push the state's health-care coverage beyond federal parameters. That means discounted health care for more Illinoisans - maybe all of them, if Blagojevich gets his way - but it also means a greater financial burden for the state.

The federal government reimburses Illinois for half its Medicaid costs, but it doesn't cover costs associated with the All Kids expansion launched last summer, lawmakers say.

Nor would it help with a separate program Blagojevich attempted to establish recently. Under an emergency rule, his administration sought on Nov. 7 to double eligibility for FamilyCare, extending the program to another 147,000 adults. A family of four must have a combined income of $38,203 or less to qualify, but he wanted to raise that threshold to $82,600.

Lawmakers said the additional 147,000 adults would cost the state $367.5 million a year. Blagojevich spokeswoman Abby Ottenhoff downplayed such long-term estimates as "premature."

"We don't think the cost will come close to the $360 million figure that has been floated by some lawmakers," she said. "Better estimates are more than a third lower."

On Tuesday, a special committee that reviews administrative rules rejected the emergency rule by a 9-2 vote.

It was just the first in a series of rules that Blagojevich is expected to file in the course of his effort to enact universal health care. Last spring when he formally announced his plan, his administration put the price tag at $2.1 billion.

Late last week, the administration directed state caseworkers to begin registering people for the program up to the higher income threshhold, despite the committee's rejection of the plan. State officials and legislators differ on whether the committee's decision is binding.

More Medicaid funds

Meanwhile, the administration is spending its Medicaid dollars at a fever pace.

By Nov. 8 - roughly one-third of the way through the fiscal year - the state had spent 45 percent of budgeted funds.

Steve Brown, spokesman for House Speaker Michael Madigan, D-Chicago, said lawmakers may need to approve additional spending in the spring, but it's not clear where the state may find the money.

Blagojevich and legislative leaders are contemplating an expansion of gambling to generate more tax revenue, but they disagree over whether any of that may be set aside for health care. Competing priorities include mass transit, road and school construction and school operations.

Rep. Dave Winters, R-Shirland, predicts the administration will slow its payment cycle to stretch its dollars.

That would mean even longer delays for doctors, hospitals, pharmacists and other health-care providers seeking reimbursement from the state.

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