Illinois Lawmakers OK Program to Insure ‘All Kids’

Published December 1, 2005

Illinois has become the nation’s first state to offer health insurance to all children, regardless of family income.

Democrat Gov. Rod Blagojevich proposed the “All Kids” health insurance program several weeks before the state’s six-day veto session in October. The Illinois State Senate approved the measure by a 32-23 vote on October 26. The House voted 79-28 to approve the measure the next day, handing Blagojevich arguably the biggest victory of his administration.

“Passing the All Kids plan is a landmark achievement in Illinois. Every child deserves the chance to be healthy,” Blagojevich said in a statement soon after the General Assembly approved the plan.

“We’ve worked hard for three years to make health care available for more working and low-income families,” Blagojevich continued. “But thousands of kids from working-class and middle-class families have fallen through the cracks because their families earn too much to qualify for government programs, but still can’t afford private insurance.”

The state expects to have the program running by July 1, 2006.

Subsidized through Medicaid

All Kids will provide subsidized health insurance coverage through the state’s Medicaid program. Premiums will depend on family income. Higher-income families will pay higher premiums.

The governor’s office says a family with two children that earns between $40,000 and $59,000 a year will pay a $40 monthly premium per child. Each physician visit would cost the family $10. A family with two children earning between $60,000 and $79,000 will pay a $70 monthly premium per child and a $15 co-pay per physician visit. There will be no co-pays for preventive care visits, such as annual immunizations and regular check-ups and screenings for vision, hearing, appropriate development, or preventive dental.

“These premiums for middle-income families are significantly more affordable than typical private insurance premiums of $100 to $200 a month, or $2,400 per child annually,” the governor’s statement said.

Business, Republicans Skeptical

In an October 26 statement to the author in response to questions about the All Kids program, officials at Blue Cross Blue Shield of Illinois said, “Blue Cross and Blue Shield of Illinois already is actively engaged in extending coverage to Illinois children. BCBSIL currently offers an individual policy with a $250 deductible for a premium of about $64 monthly per child. For those who cannot afford even that amount, BCBSIL for years has actively supported such efforts as the Gilead Outreach and Referral Center, which has taken a leadership role in linking people with existing government programs.”

Republicans in the General Assembly expressed anger and frustration at the concept of the program and the legislation itself.

“Just another press release opportunity for the governor,” said Sen. William Peterson (R-Buffalo Grove), who noted the governor’s media package for All Kids contained 7,800 words while the legislation has only 2,200 words “and almost no details.”

Few Details

Peterson said bureaucrats in the state’s Department of Healthcare and Family Services will be responsible for most of the program’s design. He also complained there is virtually no information about the potential costs. Blagojevich promised to pay for the first year of the program by putting most Medicaid patients into managed care, saving $45 million to apply to All Kids. But that promise is not in the legislation, and there are no estimates of the long-term costs.

Peterson also pointed out the state passed All Kids as it was finishing plans to borrow $1 billion to pay overdue Medicaid bills.

“Medicaid already has financial problems, and this program adds to them,” Peterson said.

The governor’s office estimates 253,000 children who now have no health insurance could participate in the program. That apparently includes illegal immigrants, because the legislation does not require applicants to show proof of citizenship.

Further Expansion Suspected

In an interview on WIND Radio in Chicago three days before the Senate vote, Sen. Steve Rauschenberger (R-Elgin), a candidate for the Republican nomination for governor, said he believes the real reason for All Kids is to move the state toward a single-payer health care system.

“A lot of Democrats believe the way to get to a single-payer system is to expand Medicaid up from the bottom and pull Medicare down from the age group at the top,” Rauschenberger said. “What they’re trying to drive us toward is a single-payer model where they would be able to reduce choice and politically control your health care.”

Michael F. Cannon, director of health policy studies at the Washington, DC-based Cato Institute, agrees with Rauschenberger’s assessment. In an October 13 op-ed in the Chicago Sun-Times, Cannon wrote, “Anyone looking for proof that supporters of government-run health care are trying to push all Americans into government health programs need look no further than Illinois.”

Investigations Strain Trust

The sketchiness of the legislation and the way it was rushed through during the brief veto session were major complaints of opponents.

“We need to ask ourselves, ‘What’s the hurry?'”said Sen. Chris Lauzen (R-Aurora). “If this is such a good idea, it will stand the close scrutiny of deliberate review. Incredibly, payment details and the promised commitment to managed care are not in the legislation that the General Assembly is voting on. We are supposed to trust a governor who has doubled the state debt, raided the state pensions, and disappointed reformers to whom he promised to ‘change the way state government does business.'”

Lauzen’s references to trust and disappointment came in response to federal and state criminal investigations involving the Blagojevich administration. Federal subpoenas seeking hiring records were served to the governor’s office and the Illinois Department of Children and Family Services on the day the legislation passed, the third set of federal subpoenas to hit the governor’s office in recent weeks.

In September a guilty plea by Chicago attorney Joseph Cari to a charge of attempting to extort $850,000 from an investment firm seeking business from the state’s teachers’ pension fund implicated Blagojevich. Cari said in the guilty plea he was one of several persons involved in a kickback and extortion scheme to benefit the political campaign of “Public Official A.” Several news organizations soon identified Public Official A as Blagojevich. (See “Ill. Governor Implicated in Pension Probe,” Budget & Tax News, October 2005.)

Supporters of All Kids avoided discussing the governor’s problems.

Steve Stanek ([email protected]) is managing editor of Budget & Tax News.