Critique of Illinois' "Hybrid" Plan

Illinois’ False Promise of Health Care for All

In 2005, a state task force set out to come up with a plan to guarantee access to quality health care for all Illinoisans. Unfortunately, the plan they came up with is anything but. While the Task Force plan offers only band-aids for our sick health system, a single-payer statewide health insurance system could offer real health care for all for no more than we’re paying now:

What’s in the Task Force Plan?

The Task Force plan has three major components:

A Modest Expansion of Existing Public Coverage. The State Children’s Health Insurance Program will be expanded to cover parents up to 200% of the FPL ($39,600 for a family of four); and a new Medicaid program will cover childless persons under 100% of the FPL (~$10,000). There are also some coverage expansions for selected disability groups.

Mandate that the Uninsured buy Coverage. Not buying insurance would become an offense for which the uninsured would punished by the state at tax time. Individuals would be forced to buy a “Comprehensive Standard Plan” from a private insurer individually or through their employer. Employers could offer group plans to their workers or pay a penalty.

Taxpayer Subsidies to buy Private Coverage. Those making less than 400% of the FPL (about $80,000) would get a subsidy to help pay for this coverage.

What’s good about the Plan?

The Plan Expands Some Coverage: Although the coverage is grossly inadequate and the expansion method is to make being uninsured a punishable offense, the plan does expand some coverage to those who genuinely need it.

The Plan Makes Reforms to the Insurance Industry: Although the plan preserves wasteful private insurers, it does make significant reforms to the insurance market and places restrictions on insurance companies.

What’s wrong with this Plan?

The Plan is Not Universal: By the authors’ own optimistic estimate, 185,000 Illinoisans will still be without coverage. Even for those who buy coverage, the policies the Task Force plan envisions will leave many without access to care when needed.

The Plan is Unaffordable:
- For Illinoisans: The average reasonably comprehensive insurance policy costs $4,024 for individuals and $10,880 for families. Most of the uninsured are not rich enough to afford this, even with subsidies.
- For Businesses: Forcing businesses to shoulder rising costs simply encourages them to cut benefits, wages, or jobs.
- For Taxpayers: Of the estimated $3.6 billion cost to the state, 77 percent ($2.8 billion) has no identified source of funding.
The Plan Offers Inadequate Coverage: The authors envision the plan’s benefits to be “consistent with a typical commercial package,” but today’s insurance policies are so riddled with exclusions, co-payments, and deductibles that millions of insured Americans go without needed care due to cost. Nor do typical insurance policies protect against financial ruin: of the 40,000 Illinoisans bankrupted by illness each year, more than three-quarters had coverage when they got sick.

The plan’s authors promise comprehensive coverage for affordable prices, but this is like promising delicious cookies with no fat or calories. The only way to get affordable plans from private insurance companies is to strip down coverage or boost individuals’ out of pocket costs.

The Plan is Unsustainable: The plan has no way to control skyrocketing health care costs. Predictably, the rising costs will cause employers to drop coverage while state revenues are drained by the increasing cost of Medicaid and subsidies for private insurance. A future recession would bankrupt the system entirely.

Are there Alternatives to this Plan?

Yes. A Single-Payer Statewide Health Insurance System was introduced to the Task Force by a coalition of doctor, nurse, disability, labor, civic and seniors’ groups (and endorsed by more than 700 Illinois physicians), but it was defeated by insurance industry interests. A single-payer program would eliminate the private insurers as payers for health care and use the savings to provide comprehensive coverage for all Illinoisans.

Features of the single-payer plan include:

Comprehensive coverage for all Illinoisans including doctor, hospital, long-term, mental health, dental and vision care as well as prescription drugs and medical supplies.

No Premiums, Co-Payments, or Deductibles that inhibit access to care and unfairly burden the poor.

Free Choice of Doctor and Hospital and an end to HMO dictates over patient care.

Pays for Itself by eliminating wasteful private insurance administration and profit. Modest, progressive taxes would replace what is currently paid out-of-pocket.

Controls Costs so Benefits are Sustainable through negotiated physician fees, global budgets for hospitals and bulk purchasing of prescription drugs and medical supplies.