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state's intention to implement a healthcare plan that would provide access to a full range of preventive, acute and
long-term healthcare services to all Illinois residents. Since being established, the task force has been holding public
hearings, soliciting proposals and reviewing options. While the legislature is not bound to act on the proposal, the act
"strongly encourages" legislators to adopt its provisions.
According to David Carvalho, deputy director of the Illinois Department of Public Health Office of Policy, Planning and
Statistics, who has been working with the task force, the group got a late start because funding for its operations was not
approved until 2005.
Once the task force was funded, however, it hired three consulting firms to help it through the process: Navigant
Consulting (an international consulting firm headquartered in Chicago), Mathematica Policy Research (a Princeton, N.J. firm
that specializes in policy research) and Milliman Consulting (an international consulting and actuarial firm headquartered
in Seattle).
According to Carvalho, the task force received five proposals offering differing ideas on how to meet the state's goal:
"To insure that all residents have access to quality healthcare at costs that are affordable." The proposals were submitted
by the Campaign for Better Health Care and Health and Disability Advocates (a broad coalition of labor, religious and
nonprofit groups), Citizen Action/Illinois (a nonprofit, public interest organization), the Illinois Hospital Association,
some members of the task force that are associated with the insurance industry and Dr. Clinton Young, a member of the task
force and a member of Physicians for a National Health Program (a nonprofit organization of physicians, medical students and
healthcare professionals who support single-payer national health insurance).
Carvalho said BlueCross BlueShield of Illinois also made a presentation to the task force, but he declined to formally
submit its plan for consideration.
After reviewing the various proposals, taking comments at numerous public hearings and working with the task force, the
consultants drafted a "hybrid" model that drew from all of these sources as well as programs currently operating in other
states. According to the draft proposal, "the 'hybrid' proposal recognizes that the substantial additional funding required
to accomplish the act's goals must necessarily come from all parties - consumers, employers, providers, insurance carriers,
the state and the federal government - redirecting resources now devoted to other types of spending."
"There is no way to do this that is cost-free," Carvalho said. "You can't provide health care at no cost to more than a
million people who don't currently get it. So the question is: How do you spread the burden around? The proposal that the
consultants developed puts the burden on business, on individuals and on government," he added.
The proposal recommends the adoption of the following policies:
l Individuals would be mandated to obtain health insurance coverage.
l Employers would be mandated to spend a predetermined percentage of the payroll on healthcare coverage or pay that same
amount to the state to help fund premium and deductible subsidies to make the mandated coverage affordable (Play or Pay).
l Insurers would be limited on the spread in rates between the most expensive and least expensive rate classes for small
group and individual products.
l Insurers would be required to make a new standard benefit package available that will qualify for subsidies.
l Current public coverage would be expanded.
l State-funded subsidies would be available for residents below 400 percent of the Federal Poverty Level who purchase the
new standard package (as individuals or through their employer).
l The state would establish and administer the Illinois Health Education and Referral Center that would operate as an
enrollment broker and information clearinghouse on coverage options, premium costs, provider quality, individual healthcare
literacy and other information to educate consumers.
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The task force is broad based and bipartisan with members being chosen by the governor, the president of the Illinois
State Senate, the Speaker of the House and the minority leaders of both the house and senate. Carvalho said that it also
operated in a very public manner - under the Open Meetings Act - and that court reporters took minutes of every meeting and
public hearing.
Despite the openness and the bipartisan, multilateral approach, Carvalho says he doubts that the report will come out
with the unanimous backing of the full task force. In particular, the task force is proposing certain changes that the
insurance industry's members are not pleased with.
"One of the features that the consultants said you need in your insurance regulation is a mandate that insurance
companies issue policies to anyone who applies for them," said Carvalho. "In other words, if you apply for insurance right
now in Illinois, you can be turned down based on underwriting criteria. The logic of the individual mandate is that you
can't very well require people to buy something and say, 'Oh, by the way, the insurance companies can turn you down.' A
person would be out of compliance with no way to comply."
The other provision that the insurance industry members are not happy with is what is called "rate banding." Under rate
banding provisions, the top insurance premium rate is limited to a multiple of the lowest rate. Rate banding, therefore,
effectively puts a cap on how much an insurance company can charge.
"When you put a band on it," Carvalho said, "the logic is that if you impose an obligation on people to buy but you have
no constraint on what can be charged, you are putting people in an untenable situation: 'You have to buy this and, by the
way, they can charge you whatever they want.'"
Carvalho said the two provisions - an individual mandate and rate banding - work together. If you have rate banding
without an individual mandate, he said, unhealthy people will buy what would otherwise be unaffordable insurance because the
rate would be capped.
On the other hand, he said, healthy people will simply opt not to buy insurance because it's too expensive. Carvalho said
states that have rate banding without requiring everyone to have insurance experience higher insurance rates because of this
adverse selection.
"The way that society spreads the risk among everybody is everybody gets insurance," Carvalho said. "Our societal risk of
being sick is shared.
"Theoretically, that's what insurance is all about, right? For purposes of this project, however, the folks on the panel
representing the insurance industry have not found that argument persuasive and have indicated their opposition to rate
banding and opposition to the guaranteed issue."
However, Carvalho is hopeful that the legislature will accept the proposal and take action. He says that the approach of
the task force is different from the failed attempt by the Clinton Administration in the early 1990s. The report reviews and
evaluates the various alternatives so that legislators will be able to see the pros and cons of each one and understand why
the task force has settled on its proposal.
"I think when you put something together that has plusses and minuses for everybody, folks tend to focus on the minuses
when it first comes out of the box," Carvalho said. "There's an expression that Congressman Danny Davis (D-Illinois) uses
all of the time. 'Everybody wants to go to heaven but nobody wants to die to get there.' Everybody looks at it and says,
'Okay, I like all of the parts that I like, and if you just take out the one part that I don't like, I'll be happy with it.
But if you take out all of the parts that everybody doesn't like, the whole thing falls apart.'"
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