A Bleak Report from Springfield

Observations and comments about state government by State Representative Robert W. Pritchard.

News from the State House

May 14, 2012 – In this Issue:

• Insurance Benefit Changed for Retirees
• State Healthcare Procurement Criticized
• Legislation Updates Swimming Facilities Act
• No Resolution Yet for Restoring Child Care Funding
• Medicaid Reform Bill Likely This Week
• Auditor Documents Problems at College Illinois!
• Fallen Firefighters Remembered

Insurance Benefit Changed for Retirees
The legislature is considering a number of major policy reforms this month as it seeks to gain control of state spending while providing critical services and programs. Both the Illinois House and Senate passed legislation this past week that will require retired state employees to pay health-care premiums.

Based on the comments my office has received on this issue, people saw SB 1313 in black and white terms: no longer affordable “free” health care versus a promised employment benefit. Like most issues, this benefit of employment was both.

Under the legislation, retired state workers, judges, lawmakers and university employees would have premiums for their group health insurance program set each year by the Director of Central Management Services. I pushed to have clarification about how those premiums would be set, assurances that premiums would be affordable for retirees on fixed incomes, and justification for the legislature transferring these responsibilities to a political appointee. The answers were not sufficient.

Currently about 90 percent of this group of retired state employees (78,000 retirees) pay no premium for their health insurance. Like most insured individuals they make a co-payment for services and pay in full for non-covered treatment. Another 7,400 retirees pay a portion of their premiums. Current law provides a 5 percent reduction in premium costs for each year of state service. Retirees with 20 years of state service do not pay a premium. Like many employee benefits, whether in the public or private sector, retiree health insurance costs have exploded over the past several decades and now total over $800 million this year.

My conclusion was that this legislation should have been phased in since current retirees were given a promise about benefits. I also strongly disagree with the transfer of responsibility for defining this important benefit of employment. Standards should have been in the bill rather than leaving everything to union negotiations, which may downplay the concerns of retirees for current working employees.

State Healthcare Procurement Criticized
My skepticism about the fairness of agency determined healthcare decisions was verified at a hearing this past week on the State’s Group Health Insurance Program. The Auditor General’s review of the 2010 procurement of health insurance for some 400,000 enrollees and dependents found disregard for evaluation procedures, lack of documentation to support decisions and inadequate management review.

The Auditor General could not even conclude if the state’s interests in the $7 billion program were achieved. You may remember that many of us legislators were amazed that the health insurance program was awarded to insurance providers that didn’t have agreements with healthcare providers in an area and required employees to pay considerably more for insurance or change providers altogether.

The House Human Services and State Government Administration Committees held a joint hearing to review the audit and its 15 recommendations, the Department of Healthcare and Human Services response to the audit and the agency’s process for awarding a fully-insured HMO program this year. The Auditor’s report can be found on its website: www.auditor.illinois.gov/auditreports and look for LAC 142.

Legislation Updates Swimming Facilities Act
To meet the increased demands of the swimming facility industry, while providing necessary protection to the public, the Illinois legislature is currently considering new legislation to update Illinois law. SB 3727 seeks to hire additional engineers to reduce the time required to review application permits for the construction, installation, or major alteration of swimming pools.

In the past several years, the complexity of swimming facilities has increased dramatically. For instance, a new federal law concerning suction entrapment precipitated changes to almost ever swimming pool in the nation, including those in Illinois regulated by the Illinois Department of Public Health (IDPH).

In response to these rapid changes, SB 3727 seeks authority to require that licensed professionals become prequalified to prepare plans and specifications for submittal to IDPH. It also seeks increased permit fees to pay for the regulatory oversight in a faster manner.

No Resolution yet for Restoring Child Care Funding
A rally of thousands of child care providers in the Capitol this week may be the impetus needed to get legislative action on restoring funding for child care providers. Both HB 6164 and talks among legislative leaders that would supplement the child care funding have stalled.

The Department of Human Services informed providers recently that state funding to supplement low-income family fees had been diverted for other purposes. Some $73 million in additional funds will be required for the State to pay the bills of child care service providers for April to June.

Many child care service providers are licensed individual caregivers and non-profit businesses that can’t afford to wait for state payments. I am working with legislators to find funds within the FY12 budget than can be used to pay these outstanding bills.

Medicaid Reform Bill Likely This Week
A working group has been meeting for weeks seeking ways to cut $2.7 billion from Medicaid spending. The group met over the weekend in an attempt to finalize a bill that can be debated in the House this week.

Governor Quinn preempted the group’s work several weeks ago by announcing his own Medicaid reforms which included reimbursement rate cuts for providers, a $1 cigarette tax and about $1.3 billion in program reductions. Many feel more can be cut from programs.

The working group has been getting the advice of national Medicaid experts who have suggested ways Illinois could make program reductions of an additional $700 million by using best practices of other states. The Quinn Administration has been lukewarm or refuses to even discuss such ideas as recipient asset testing, verifying income eligibility, initiating a small co-payment for office visits, limiting excessive hospital or doctor visits, and reducing or limiting child support.

A local healthcare provider illustrated the abuse in the Medicaid system for me just this past week. The worker sighted incidents where Medicaid clients frequently miss appointments, visit the emergency room or doctor for minor symptoms, get free prescriptions for over-the-counter drugs, and abuse the birth control program.

Medicaid eligibility has been expanded by over a million clients since 2002 and consumed about a third of the state budget last year. Reform is needed and possible if the Administration would sincerely seek it.

Auditor Documents Problems at College Illinois!

I have been reporting the Governor’s efforts to reorganize the Illinois Student Assistance Commission (ISAC) and to salvage its prepaid college tuition program. The Auditor General just revealed how corrupt and mismanaged the agency was allowed to become.

Among the surprising audit findings were how the College Illinois! prepaid tuition program circumvented the state’s procurement code, allowed conflicts of interest, assumed investment returns that were over twice actual returns, and allowed expenses to grow by 300 percent. Marketing material for the program led a purchaser to believe College Illinois! was a safe investment and backed by the State of Illinois; which it wasn’t.

The findings and recommendations can be viewed at http://www.auditor.illinois.gov/auditreports. I doubt that the Quinn Administration will pursue criminal charges against the former leadership team at the agency or seek to recover financial losses. It only pays lip service to ethical behavior.

The new College Illinois! management team has pledged to take a series of steps to stabilize the program, assure tuition funding and reopen the program for new investors.

Fallen Firefighters Remembered
Firefighters from across the state gathered in Springfield last week to remember deceased firefighters and to honor 21 other firefighters for their outstanding bravery and service to their communities. I was pleased to see that two firefighters from our area were remembered in the memorial service.

Among those honored was Kevin McIntyre, Rockford, who was a district fire chief. Laying a wreath in Kevin’s memory was Jim Strey, retired division chief. The family of Richard Watson, Sandwich, was present to celebrate his life and 50 years of service to the Sandwich Fire Department. They were accompanied by an honor guard from Sandwich.

District Office 815-748-3494 or E-Mail to bob@pritchardstaterep.com