Illinois Effort to Limit Uninsured Health Care Expenses Halted by Governor?s Amendments

The Illinois legislature, hospitals and state attorney general thought they had come up with groundbreaking legislation to help the state’s uninsured from being overwhelmed by rising health care costs that could leave many financially crippled. However, Illinois Governor Rod Blagojevich didn’t think the Hospital Uninsured Patient Act went far enough, amending key parts of the bill that had been unanimously approved by the House and Senate.

The Illinois Hospital Association, which represents about 200 hospitals statewide, is hoping the legislature overrides Blagojevich’s amendments and reinstates the original bill, said Danny Chun, spokesman for the 200-member association.

“We believe these changes aren’t workable,” Chun told insideARM.

But if either chamber rejects the governor’s amendments, or the original bill, the bill dies and lawmakers would have to start from scratch, Chun said. If legislators do not act on the bill by the end of the current session, by rule it will die and need to be restarted.

“It was the first of its kind in the country,” Chun said of Senate Bill 2380. “Now it’s in limbo.”

After months of studies and negotiations, the bill called for the state’s licensed hospitals to provide standardized discounts to uninsured urban residents with income up to 600 percent of the federal poverty level (FPL), and to rural residents with income up to 300 percent of FPL.  Eligible residents meeting those criteria would pay no more than 35 percent above the cost of care for treatment at the state’s hospitals and their out of pocket hospital bills over a  12 month period would not exceed 25 percent of their annual income, Chun said.

Blagojevich’s amendments, however, raised the income eligibility threshold to 800 percent of FPL for urban residents and to 600 percent of FPL for rural residents. Chun said the raised thresholds means a family of four with income of nearly $170,000 annually living in an urban area, and a family of four living in a rural area with nearly $125,000 a year would be eligible for the same discounts as a family of four earning significantly less.

“The median household income in Illinois is $54,000, Chun said. Under Blagojevich’s threshold, “99.999 percent of rural residents would qualify.”

Chun added that Blagojevich’s amendments lowers eligible patients’ out- of-pocket expenses for hospital procedures to no more than 20 percent above the cost of care, and they include a provision that requires hospitals to pay 50 percent of the co-pays, co-insurance or deductible for all insured children who are admitted to hospitals with any diagnosis related to juvenile diabetes.

“This is the first time hospitals are being required to absorb the out of pocket cost for insured patients,” Chun said.

Illinois lawmakers had high hopes for the legislation, which is believed to be the highest income eligibility levels set for hospital discounts.  Now hospitals worry that Blagojevich’s amendments, if accepted, would impose mandates on hospitals that could potentially put many in financial jeopardy.

Chun said Illinois hospitals already are absorbing nearly $2 billion a year in underpayments from Medicare and Medicaid and more than $1 billion a year in uncompensated care expense.