Governor's Budget Proposal Includes FamilyCare Expansion: Fills $1.7 Billion Deficit Without Cuts in Health Care Programs

Despite the ongoing state budget crisis, Gov. Rod Blagojevich’s budget proposal includes an increase of the FamilyCare eligibility level. This would qualify an additional 77,000 parents for FamilyCare, a health insurance program for parents of children already covered by KidCare or Medicaid.

Illinois officials received federal permission in 2002 to expend federal matching monies for FamilyCare. The program can potentially serve working parents who earn up to 185 percent of the federal poverty level. Before FamilyCare, working parents had to have income less than 39 percent of the poverty level to enroll in state-sponsored health insurance plans.

Governor Blagojevich, who promised to implement FamilyCare fully over a three-year period, increased eligibility last year to 90 percent of the poverty level. This year he proposes increasing the eligibility level to 133 percent of the poverty level, or just over $25,000 per year for a family of four.

The governor also has reiterated his promise to complete full implementation of FamilyCare in 2005, when eligibility rises to 185 percent of the poverty level.

No cuts in health care programs

The governor’s budget plan does not cut reimbursement rates for care provided through state health care programs such as KidCare and Medicaid. Neither does the plan constrict eligibility for these programs.

Instead the Blagojevich administration hopes to make it easier for parents to enroll children in KidCare. The governor is proceeding with efforts to simplify KidCare application by requiring applicants to submit only one payroll receipt as verification of income. The program currently requires a full month of income documentation.

Last year Illinois was one of a few states not to cut health care funding in the face of major budget deficits. The governor’s plan, if approved, would continue this distinction.

Increased funding for child care and job training; major change proposed for private human service providers

The governor’s budget proposal adds close to $27 million to the child care subsidy program. This annualizes an increase enacted last year but not paid for the full year.

The proposal also would appropriate $3.5 million for two programs for employer-based job training for low-income workers. The programs will be funded at  $5 million.

The governor also proposes fee-for-service contracts, rather than grants, for private human service agencies. Several of the larger private agencies receiving grants from the state are negotiating the details of this proposal. One reason for this proposed change is that it will enable the state to claim federal Medicaid matching funds for several types of service.

Balancing the budget

The governor’s plan fills a $1.7 billion budget gap through cuts in some programs such as tourism and Open Lands and through further reduction of the state bureaucracy. He also proposes closing several business tax loopholes; this proposal may save millions of dollars. The extreme example of such loopholes is a sales tax exemption for businesses that purchase luxury yachts.

The budget proposal depends on income from the new—yet unsold—riverboat gambling license. The proposal also assumes revenues of several hundred million dollars from a “hospital assessment” plan enacted in last fall’s veto session but not yet approved by the federal government.

For more information, contact John Bouman, johnbouman@povertylaw.org.