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Hospitals, insurers back Ill. Medicaid expansion

Published on NewsOK Modified: December 26, 2012 at 4:16 pm •  Published: December 26, 2012

"We're talking about billions of dollars coming into the state through federal Medicaid matching funds," said A.J. Wilhelmi, of the hospital association. "That results in a great deal of economic activity in communities across the state and literally tens of thousands of jobs."

Besides hospitals, the list of supporters of the Medicaid expansion includes AARP Illinois, Aetna, Blue Cross Blue Shield of Illinois, the Illinois Academy of Family Physicians and numerous community health centers and patient groups.

It's a powerful list. But some lawmakers are wary of increasing Medicaid costs to the state, said Rep. David Harris, an Arlington Heights Republican who serves on the board of Advocate Lutheran General Hospital in Park Ridge.

Medicaid is an expensive program for a financially struggling state, said Harris, who hasn't decided how he'll vote. "When we start big expansions of an expensive program, that's a big expense," he said.

Q. Who would benefit from Illinois running its own health insurance exchange?

A. Whether run by the state or the federal government, the exchanges envisioned in the health law are intended to be consumer-friendly online marketplaces, one in every state, where people could comparison shop for health insurance plans, just as they now shop for airline tickets on the Web.

Most people buying insurance through the exchanges would get taxpayer-financed subsidies, and the exchanges will help people who qualify enroll in Medicaid. Participating insurance plans would have to take all applicants, regardless of pre-existing health problems. The exchanges would feature cost calculators to help consumers figure out how much they would pay.

An estimated 486,000 Illinois residents will get coverage from commercial insurers through the exchange in 2014, growing to 1 million customers by 2016. The health law requires exchanges to be self-sustaining by 2015. A report last year by the Wakely Consulting Group estimated annual operating costs for an Illinois-run exchange could reach $89 million, a cost that could be passed on to customers in their premiums.

The benefit of an Illinois-run exchange would be keeping state regulators — not Washington — clearly overseeing the system and the insurance industry. Insurance companies want that, said one lobbyist.

"Our preference is a state-run exchange. The way we see insurance markets is they should be regulated at the state level," said Elena Butkus, of Aetna Inc.

Consumer groups also want a state-run exchange, but for vastly different reasons. They see an opportunity to keep prices lower by allowing the state exchange, which could be a quasi-governmental entity with its own governing board, to negotiate insurance premium rates.

"The state already (negotiates rates) for state workers and state legislators' insurance coverage," said Jim Duffett, of the Campaign for Better Health Care. "This isn't something that's a new idea."

The state's major insurers hate that idea, Butkus said. The federal exchanges that will operate in states without state-based exchanges will be open to insurance plans that meet basic standards, and the federal government won't negotiate premiums, at least initially.

"If we can't have a bill that looks out for the insurance market, then we will default to the federal option," Butkus said.


The Medicaid expansion bill is HB6253.

Bill numbers haven't been assigned to insurance exchange legislation.



Illinois General Assembly: