When fewer people have health insurance, everyone pays more.
Nationwide, the added expense of treating everything from sore throats to heart disease in the emergency room is significant — about $41 billion in 2004 — according to a January report by the Kaiser Commission on Medicaid and the Uninsured.
Because an uninsured person only pays about a third of his or her hospital bill, the hospital and its patients who are insured pay the difference, says Jim Duffett, executive director of the Illinois Campaign for Better Health Care. "The average family of four last year paid more than $1,000 above their premium costs to treat the uninsured," he says.
Illinoisans who didn't have medical insurance constituted 14 percent of the state's total population, or about 1.8 million people, in 2004, according to the U.S. Census Bureau. That's slightly less than the nationwide average of about 15 percent.
There are two main reasons people don't have insurance. Fewer businesses offer private medical coverage for employees and retirees than they did in 2000, according to the Kaiser report. And public insurance programs offered by state and federal governments don't cover most people until they turn 65. That means middle-aged adults are at risk of falling through the cracks, leaving some without insurance just as they acquire chronic conditions that are expensive to treat. As a result, hospitals and community clinics that care for the uninsured get squeezed to cover those costs.
Furthermore, the federal government's spending on health care subsidies has declined in recent years, according to the Kaiser report, down from an average of $546 per uninsured person in 2001 to just below $500 per person in 2004.
Federal officials don't appear ready to offer solutions to rising costs, either. For years, Congress has avoided discussing "universal health care," a term that has many connotations.
As a result, some states have decided to take the lead in exploring new ways to relieve the fiscal pain. At least one has gone so far as to require all of its citizens to carry health insurance. A handful of others, including Illinois, are inching toward a variety of health care systems that would include everyone. The approaches range from offering a single plan for everyone in the state to expanding employer-based benefits through tax credits, as well as subsidizing plans for the poorest citizens, according to the Kaiser report. While Illinois may not be ready to require health insurance, it has set a deadline for finding more ways to improve access to health care.
Duffett says a new state task force that has been studying the issue may be nearing a compromise, but conflicting ideas about whether government should have a heavy hand in the business sector and in individuals' lives makes mandates unlikely anytime soon.
Illinois already has taken one step, approving a program to insure all children whose parents lack coverage but don't qualify for any other type of public assistance. Democratic Gov. Rod Blagojevich has received national recognition for the All Kids program, which is touted for potentially insuring up to 250,000 children for preventive care, dental, vision and prescription drugs. Enrollment is still under way, but 50,000 children are expected to be covered in the first year, according to Kathleen Strand, spokeswoman for the Illinois Department of Healthcare and Family Services. The benefit will be phased in and won't officially start until July 1.
While All Kids is a laudable program, says Duffett, Illinois simply took the easiest route by focusing on children. "Insuring all kids is the lowest hanging fruit out there. It's the cheapest to do and has the greatest impact on preventive and primary care and the quality of care."
In fact, according to the Kaiser report, adults, especially minorities, are more likely to be uninsured than children. Adults only qualify for Medicaid if they are disabled, pregnant or have dependent children.
But even adults who have health insurance can't always afford to go to the doctor or fill their prescriptions. The U.S. Centers for Disease Control and Prevention says about 503,000 Illinois adults reported not seeing a doctor in 2004 because they couldn't afford it, despite having health insurance. They constitute the group called the "underinsured," which is much harder to reach with a public safety net.
All of these concerns will have to be addressed by the statewide Adequate Health Care Task Force, a group created by the 2004 Health Care Justice Act to expand access to affordable health care. The group includes hospital administrators, physicians, consumer advocates, insurers, researchers and lawmakers. The panel is scheduled to present a plan by the end of this year.
Heads are starting to nod as members tell their sides of the story, says panelist Mike Murphy, director of governmental affairs for UniCare, a health insurance company in Illinois. "There were a lot of preconceived notions and attitudes that took a while to melt away," he says, "and I think that thaw is still occurring."
That's partially because each sector of the health care industry has its own concerns. For instance, Duffett says, hospitals say they can't give out any more charity care; large businesses say they can't compete globally with countries that offer universal health care; small businesses say they want to help their employees, but don't have the stability to afford it; and the public is concerned about paying more out of pocket.
Still, conditions are ripe for a compromise, he says. "We are a heck of a lot closer than all of us thought we were, but at the same time, [we want] to have a real debate," Duffett says. "We want that debate to lay out a variety of different ideas in the middle, figure out where and what level of commitment the people and the politicians and special interests are willing to push."
By December, he says, the panel will either support an approach that says, "You're on your own, society," or a commonwealth approach that champions, "Everybody in and nobody out."
Massachusetts took the commonwealth approach, but there's no guarantee the plan will easily translate to other states, says John McDonough, executive director of Health Care for All, a primary advocate for the state's new law.
By 2007, Massachusetts' residents of that state who can afford health insurance will have to buy it. For those who can't, the state will subsidize their policies. Businesses also would pitch in by offering health insurance to their workers or paying a $295 fee per employee.
That was no easy feat for a Democratic legislature and a Republican governor. McDonough's advice for other states is to unite the political spectrum, not necessarily copy Massachusetts' policy decisions. During a Families USA forum in Washington, D.C., this spring, McDonough said, "Look at this somewhat less as a policy blueprint and perhaps more as a political blueprint. Less so a policy blueprint because there are certain idiosyncratic features of the Massachusetts health policy landscape."
The first point for other states to consider is that Massachusetts has a smaller percentage of uninsured residents, about 10 percent, compared to Illinois' 14 percent.
Second, Massachusetts gets a special spigot of federal money through its Medicaid program. The state taxes businesses and hospitals to pay for charity care, which attracts federal matching funds, says Brian Rosman, policy director for Health Care for All. Massachusetts' new law intends to simply shift the money from reimbursing hospitals to subsidizing health insurance for people who can't afford it.
Illinois has a similar plan to tap into federal funds, about $1.8 billion over three years, through a so-called hospital assessment tax, says Strand of the Illinois Department of Healthcare and Family Services. The new federal dollars would help reimburse hospitals, and a portion of it would go back into the Medicaid system to pay health care providers.
But Illinois is still waiting for federal approval.
Third, Rosman says, Massachusetts only has four major insurance companies that control the market. That's far fewer than the 15-some major competitors in Illinois.
States also would have to be prepared to accept the bureaucratic decisions that still face Massachusetts' lawmakers. For starters, they'll have to define what's affordable.
Rosman says one tough call will be whether middle-income families, say those who make $60,000 for a family of four, would be covered by the subsidy or would have to pay for their own insurance. They'll also have to define benefits that are critical to include, such as dental care, mental health services and prescription drugs. Then there's the logistical challenge of tracking everyone's income and eligibility, not to mention the businesses that offer health insurance versus those that don't.
With all the loose ends, the Adequate Health Care Task Force in Illinois is waiting to take a position on the Massachusetts law. In the meantime, the Illinois group is mulling over which possible solutions are realistic, given the state's own special circumstances.
For instance, Illinois' large and diverse population calls for careful consideration, says Philippe Largent, vice president of governmental affairs for the Illinois Primary Health Care Association. That includes addressing documented and undocumented immigrants who aren't covered by public or private insurance plans. And it includes supporting community health centers that treat most public aid patients.
"To create good public policy, you have to create the expansion of programs that provide coverage to people, but you also have to have a place where folks can go, a place where patients who are now enrolled in those programs can actively use those benefits in the communities that they live in."
Medical providers also want relief from cash-flow problems caused by the state's overdue Medicaid payments to doctors who care for public aid patients and pharmacists who fill their prescriptions. Currently, Illinois is $1.7 billion behind in payments, which has led some doctors to limit the number of Medicaid patients they see — if they accept them as patients at all.
Murphy says the insurance industry offers another perspective on how to address the diverse group of uninsured Illinoisans. He suggests the state take a closer look at the federal trend of offering tax credits to businesses that insure employees through tax-free health savings accounts, which pay for everything from doctor visits to over-the-counter medications. To this point, health savings accounts haven't always been available to people with chronic conditions. With more development, they could become a more viable option, Murphy says.
Businesses, on the other hand, would like to see more stability in the insurance market and fewer requirements that might impact small and large businesses unevenly, says Todd Maisch, vice president of governmental affairs for the Illinois Chamber of Commerce.
He also questions the ability of the state budget to float more programs. "We've got a tax base that is having trouble right now funding existing taxpayer systems and pensions," Maisch says.
Proponents should really rethink whether government has the capacity to take on such a huge role."
The state's Medicaid director says Illinois already offers concrete benefits to hundreds of thousands of people under a new style of managed-care system. Anne Marie Murphy of the Department of Healthcare and Family Services says the switch under the All Kids program will connect children to primary care physicians and specialists.
Having a so-called medical home, with their paperwork in one place, makes children less likely to see multiple doctors, get different treatment plans or need costly last-minute emergency room care, says Strand, the department spokeswoman.
The switch will save the state $56 million, and the department expects $37 million more in federal funding for reaching out to children in existing public aid programs.
While the state is connecting children to preventive care now, the public program may pave the way later for the state to develop a similar system on a larger scale.
But expanding public programs is only one way to address the health care headache. The state's task force has been considering ways to divvy up the responsibility of insuring everybody among businesses, individuals and the state. The next step, says Duffett of the Campaign for Better Health Care, is to reach those hard-to-insure adults — sooner rather than later.
Illinois Issues, June 2006