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State plan to expand health care won't work

Don't be fooled by Illinois Gov. Rod Blagojevich's proposal to expand government-sponsored health care plans in Illinois. A closer look at the initiative suggests it's more sizzle than steak.

Illinois employers would like to see a solution to address the uninsured in our state. Unfortunately, the plan offered by the governor badly misses the mark by propping up a failing system and taxing jobs out of our state.

While the governor's plan is ambitious, the initial higher than $3 billion price tag is unrealistic given the state's current fiscal chaos. Currently, the state woefully underpays Medicaid providers, which dramatically hurts access to quality care for the poor in Illinois. Yet Gov. Blagojevich suggests that more Illinoisans should be subjected to this health care system built on a shaky foundation.

It is irrational to continue to seek expanded public financed health care programs when the state consistently fails to meet the reasonable expectations of the existing Medicaid system. It is time to stop expanding a broken system and fix what is wrong with Medicaid. Illinois needs to address the shameful hallmarks of the state's broken health care program for the poor, including:

  • Inadequate access to health care providers
  • A lack of quality care incentives
  • High costs for taxpayers.

The solutions must include better payment structures for providers to improve access, establishing care accountability measures to improve quality and utilizing private market techniques to produce savings for taxpayers.

The governor's proposed new $1.1 billion tax increase proposal, a 3 percent payroll tax, would hit those employers who can least afford it  and that puts small business jobs at risk. Many of those jobs can very easily be relocated in neighboring states.

The simple fact is the majority of employers who don't offer health care insurance to employees cannot afford to do so. The governor's payroll tax targets these employers specifically. These are often the same employers who have been forced to absorb two state-mandated minimum wage increases in the last four years. Illinois employers have also experienced increased workers' compensation costs, unemployment insurance costs and escalated energy costs. The impact of an additional billion-dollar payroll tax is concentrated on entrepreneurs and smaller employers, increasing its economic damage.

If Illinois taxpayers wish to judge the governor's plan based on one fact, I would suggest it be the following:

Under the Blagojevich administration's approach to health care, there will be more Illinois citizens receiving health care benefits from government subsidized programs than there will be people working in the private sector funding those programs.

The governor's plan, called “Illinois Covered,” ignores private sector solutions that can reduce the number of uninsured without putting the taxpayer at further risk. The governor's proposal will result in the state being financially responsible for not just those currently uninsured, but for most of the small employer market that now has private insurance. The promise of highly-discounted health care plans financed by taxpayer subsidies will result in employers trading their private insurance for government policies.

In addition, it is unlikely a 3 percent payroll tax will generate sufficient revenue to sustain the expanded public-financed health care program that Illinois Covered would create. With previously pursued publicly-funded health care programs in Maine, Tennessee and Massachusetts, the introductory “low ball” numbers have quickly been revised to achieve reality. Maine and Tennessee were forced to reduce and abandon their health care programs due to the inability to meet costs. Massachusetts promptly acknowledged their initially planned rates were too low and would need to be increased.

Earlier this year, the Illinois Chamber recognized the merit of helping the uninsured obtain coverage for health care and had introduced SB 559, sponsored by Sen. Bill Haine, D-Alton, and Sen. Bill Brady, RBloomington, and HB 1987, sponsored by Rep. Frank Mautino, D-Spring Valley, and Rep. Dan Brady, R-Bloomington. Both proposals target strategies to assist the uninsured without unraveling the private market system most Illinois citizens use. Our proposals also limit implementation until funding is obtained from Medicaid reform and federal funding.

There are important decisions ahead as Illinois policymakers seek solutions to meeting the state's health care challenges. At this critical juncture, the Illinois Chamber urges lawmakers to first find solutions for the structural problems in the state's health care system, before asking Illinois employers and taxpayers for any more of their hard-earned money.

— Doug Whitley is president and CEO of the Illinois Chamber of Commerce. He can be reached at 312-983-7100 or

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