Shriver Center: FamilyCare Articles

Illinois Formally Applies for Family Care Waiver

2007-08-27T18:58:47Z

The Ryan administration formally launched its effort to begin the FamilyCare health insurance program when it submitted a FamilyCare waiver last month to the Centers for Medicare and Medicaid Services, or CMS, an agency of the U.S. Department of Health and Human Services.

CMS and Illinois will discuss the waiver and negotiate any issues, and Health and Human Services Secretary Tommy G. Thompson will rule on it in May. Meanwhile, Gov. George Ryan requested authority from the General Assembly to spend the federal funds that will come if the waiver is approved to start FamilyCare during the coming year.

The waiver plan. The Illinois plan for the FamilyCare program would provide health insurance choices to over 200,000 parents or guardians of children Illinois already insures under its KidCare and Medicaid programs. Under the plan, the parents or guardians may choose either to be covered by state-administered Medicaid or Medicaid look-alike insurance or to receive a cash subsidy to help them purchase private insurance or participate in family coverage under an employer’s plan.

FamilyCare would be offered to families with income up to 185 percent of the federal poverty level (just under $34,000 for a family of four).

The waiver asks for federal funding for 65 percent of the cost of the program. Also, the waiver asks that part of the 35 percent Illinois share of the cost be satisfied by current Illinois spending on health insurance programs that currently do not receive any federal matching funds (for example, the Illinois Comprehensive Health Insurance Program). If approved, this would allow Illinois to implement FamilyCare partially within the next year without any increase in state spending. In the future Illinois would need to appropriate new state funds to complete its 35 percent share of the full program.

Proposed state budget. If Secretary Thompson approves the Illinois waiver, federal funds will begin flowing to Illinois as soon as FamilyCare starts. Because the General Assembly has to appropriate, under Illinois law, any money to be spent on programs, even fully federal money, Governor Ryan included an appropriation of $40 million for the start of FamilyCare in his proposed budget for the 2003 Illinois fiscal year.

This appropriation assumes a January 1, 2003, start-up date for FamilyCare to allow the state the lead time needed to prepare to administer the new program. It would not be spent if the waiver is not approved. It would fund an initial phase of FamilyCare to cover the lowest income group and reach 80,000 families.

Full implementation. The full expansion of FamilyCare up to 185 percent of the poverty level to reach 200,000 people would require new state spending in future state budgets. The new state spending would still be only about a quarter of the total cost of the program. Though not mandated under current law, this new spending requires the commitment of a new governor and General Assembly.

For more information, contact John Bouman, National Center on Poverty Law, 312.263.3830 ext. 250.

Illinois Welfare News
March 2002

FamilyCare Must Start in January 2003

2007-08-27T18:58:47Z

The Ryan administration on February 15 filed with the federal government a waiver that would allow Illinois to begin FamilyCare, the health insurance program for the uninsured parents of children whom KidCare or Medicaid covers. Gov. George Ryan also included in his budget proposal an appropriation authorizing the Department of Public Aid to use the federal funds that the waiver would generate to start FamilyCare on January 1, 2003.

The General Assembly must keep this appropriation in the final budget. The FamilyCare appropriation has no impact at all on the state budget crisis.

The Illinois waiver sets up a program of health insurance choices. All beneficiaries at any income level would have a choice between state-administered Medicaid (or Medicaid look-alike) or a cash subsidy to help pay premiums for employer-based or private coverage.

The Illinois waiver asks for federal funding for 65 percent of the cost of the program. The waiver also asks that part of the 35 percent Illinois share of the cost be satisfied by up to $45 million of current Illinois spending on health insurance programs that do not receive any federal matching funds. If approved, this would allow Illinois to receive around $80 million in federal funding with no new state spending. Therefore:

The first $80 million for FamilyCare would be fully federally funded. These are the funds in Governor Ryan’s announced budget (because he proposes implementation halfway through the year, the appropriation is $40 million). There would be no new state general revenue fund (or other) spending. These federal funds may not be used for anything else. If we do not use them for FamilyCare, we will not receive them at all. This proposed first step for FamilyCare would set eligibility at approximately 65 percent of the federal poverty level and reach 80,000 families beginning January 1, 2003.
The eventual full implementation of FamilyCare will be 75-80 percent federally funded. When FamilyCare is fully implemented to cover families up to 185 percent of the poverty level (up to approximately 230,000 families), the full cost of the program will be in excess of $300 million. New state spending, however, will be $60-70 million (depending on enrollment). This means that new state spending will be only 20-25 percent of the total program cost. This is an excellent investment for Illinois.

U.S. Department of Health and Human Services Secretary Tommy Thompson will rule on Illinois’s waiver application by the middle of May 2002.

Illinois will retain authority to deal with FamilyCare appropriately given state finances. The state will not be committed to spend money in years after the 2003 fiscal year beyond its means and choices. Because FamilyCare is not designed as an entitlement, the state will have the full array of administrative and legislative means to keep spending within authorized levels.
Eleven reasons why FamilyCare should move ahead in the 2003 fiscal year if the waiver is granted are:

The start-up for 80,000 families on January 1, 2003, is fully federally funded.
This is a positive accomplishment for this General Assembly for low-income working families already under pressure from the economy and the difficult state budget.
Illinois risks losing the federal funds that would pay for FamilyCare if it does not use them now—access to the funds (the Illinois KidCare allotment) is time limited.
This is a major work-force investment being made all across the country. Nineteen other states already have parent coverage. Michigan and New Mexico also have waivers pending.
Businesses support FamilyCare. Health insurance improves the health, productivity, and employability of workers.
FamilyCare’s premium subsidy program will keep healthier employees in employer-supported health plans; this controls premium increases. Otherwise, due to rising costs, healthier employees are opting not to be insured; this leaves employers with sicker and smaller insured groups, leading to higher premium increases.
Health insurance allows people to access preventive and maintenance health care; this saves the expense of later acute care.
Enrolling parents helps enroll more children. Covering parents increases well-child use of medical services.
FamilyCare will decrease uncompensated care at hospitals.
FamilyCare will decrease family financial stress and personal bankruptcies.
FamilyCare will not be a center of medical inflation. It costs only $109 per month per member. There will be no long-term care. The average prescription drug use will be three prescriptions a year.

For more information, contact John Bouman, National Center on Poverty Law, 312.263.3830 ext. 250.

Governor's FamilyCare Proposal Is Included in the Budget: Federal Waiver Is Last Step to Start Program

2007-08-27T18:58:47Z

The final state budget sent to Gov. George Ryan includes an appropriation of $40 million to start the FamilyCare program on January 1, 2003. The appropriation authorizes the spending of the federal funds that would be generated when the federal government grants the Illinois FamilyCare waiver.

That request is still pending in Washington, and negotiations are ongoing over finalizing the waiver. State officials’ best estimate as to when it will be granted is mid- to late June, and those officials are very optimistic that the waiver will indeed be granted when the details are settled.

Governor Ryan filed the federal waiver request on February 15. A week later he announced his 2003 fiscal year budget proposal, which included the $40 million appropriation for FamilyCare. Throughout the very difficult spring legislative session, amid ever worsening financial news for the state, FamilyCare stayed in the administration’s plans. At least one legislative “doomsday” budget would have cut the FamilyCare appropriation out of the budget, not because this would save any state money (the appropriation is entirely federal funds), but because of a “no new programs” attitude and fears (unfounded) about possible uncontrollable spending obligations in later years (Illinois retains full control over this under the waiver).

Nevertheless, Governor Ryan reasserted the FamilyCare appropriation in his extraordinary Memorial Day speech announcing his second comprehensive budget proposal for the 2003 fiscal year. The legislative leaders had their fears or misconceptions about FamilyCare satisfactorily answered in the ensuing days, and FamilyCare stayed in all further versions of the budget.

The negotiations on the federal waiver are ongoing. Illinois will receive less matching money than originally expected. Illinois now can expect about $40 million in federal money matching existing state expenditures (instead of $80 million).

For more information, contact John Bouman, National Center on Poverty Law, 312.263.3830 ext. 250, johnbouman@povertylaw.org.

Federal Funding Approved, FamilyCare Begins This Month

2007-08-27T18:58:47Z

FamilyCare, a new health care program for low-income adults with children, is set to begin enrolling and covering the first beneficiaries this month. U.S. Department of Health and Human Services Secretary Tommy Thompson and Gov. George Ryan announced the program’s launch last month.

FamilyCare offers health insurance to low-income working parents (or other relatives who are the chidren’s caretakers) whose children the state already covers under the KidCare or Medicaid programs. At least 28,000 adults will be eligible starting this month—paid for entirely with federal funds. Ultimately as many as 300,000 Illinois parents may be eligible for FamilyCare. Beyond the first 28,000 people, the federal government has agreed to pay for 65 percent of the cost.

Thus the full rollout to potentially 300,000 people must wait until Illinois puts up its 35 percent share (approximately $80 million, depending on enrollment). This is an excellent leverage of federal funds for the popular and important program, and it immediately becomes a high priority for the new governor and the General Assembly to be elected next month.

Working with the National Center on Poverty Law and other community groups and advocates, the Ryan administration espoused FamilyCare late in the 2001 General Assembly session. The Department of Public Aid filed the federal “waiver” proposal seeking approval of federal funds in February 2002. Governor Ryan included the program in his proposed budget, which the General Assembly approved during the 2002 spring session. The General Assembly’s approval depended upon the winning of the federal waiver that gives Illinois access to substantial federal funds for FamilyCare.

Federal funding. The waiver provides federal funding to expand health insurance eligibility for parents from 40 percent of the federal poverty level (the current level under Medicaid, or $7,060 for a family of four) to 185 percent of the federal poverty level (currently $32,650 for a family of four). The waiver provides that Illinois (without having to spend any new state funds) will immediately receive sufficient federal funds to cover the 28,000 people in the program’s first phase, with enrollment and coverage beginning this month. This expands the eligibility level to 49 percent of the federal poverty level ($8,869 for a family of four). Further expansion will require new state appropriations to cover the 35 percent state share.

John Bouman, deputy director of the National Center on Poverty Law, said, “FamilyCare offers a major breakthrough on health services for people working in low-paying jobs, who otherwise cannot afford the employer’s health insurance or whose employers do not offer health insurance.” Health insurance will improve employees’ productivity on the job. Studies also show that covering parents improves both the enrollment of children in health insurance and the frequency and quality of their health care.

Program rules. Under FamilyCare an eligible family must contain children eligible for Medicaid or KidCare, and the children must enroll. For families with income above 133 percent of the federal poverty level ($24,073 for a family of four), the program offers the family a choice of either state-administered insurance (Medicaid) or a cash subsidy to help pay premiums for employer’s or private insurance. The waiver allows Illinois to offer this choice to people lower on the income scale in the future.

For families who are above 133 percent of the federal poverty level and opt for the state’s insurance (Medicaid look-alike), there will be small copayments for FamilyCare as under KidCare. For families who are above 150 percent of the federal poverty level ($27,150 for a family of four) and opt for the state’s insurance, there also will be monthly premiums of $15 for one person, $25 for two, $30 for three, $35 for four, and $40 for five or more.

October enrollment rules. The Department of Public Aid plans to implement the initial rollout this month under a temporary set of procedures. Those eligible include families with income at or under 49 percent of the federal poverty level (see table 1).

Eligible families whose children are already covered by KidCare or Medicaid may call the Illinois Department of Human Services, or IDHS, office that serves their area and request to be added to the existing KidCare or Medicaid case that already includes the child or children. The IDHS office will request current income information from the family, unless the family has recently submitted this information in connection with a health insurance or food stamp redetermination. This process is supposed to be available entirely by phone and mail, although local IDHS office practices may vary, and families may wish to appear in person to ensure that the process is completed.

Eligible families whose children are not already enrolled in KidCare or Medicaid will be required for the time being to appear in person at the IDHS office to process an application for the children and parents or caretakers. Alternatively this type of family may apply for KidCare for just the children under any of the many means of applying for KidCare (including mail-in applications and sites other than IDHS).

After the children are enrolled, the adult can phone the IDHS office to be added to the case (probably at least a month later). The Department of Public Aid intends to structure the application process for FamilyCare to be the same as the current process for applications for KidCare (a variety of ways to apply with a visit to the IDHS office being just one of several options). However, part of the tradeoff for the prompt implementation this month is that it will temporarily be necessary for new families to apply in person at the IDHS office if they want immediate coverage of the adults.

Information is available toll-free on the Department of Public Aid’s KidCare hotline, 866.468.7543 (866.4.OUR.KIDS) (TTY: 877.204.1012).

For more information, contact John Bouman, National Center on Poverty Law, 312.263.3830 ext. 250.

Table 1.--Income of Eligible Families
Family Size	Monthly Income (49% federal poverty level)	Annual Income (49% federal poverty level
1	$362	$4,341
2	488	5,851
3	613	7,360
4	739	8,869
5	865	10,378

Facts About FamilyCare

2007-08-27T18:58:47Z

Early enrollment numbers. The Illinois Department of Public Aid switched 9,500 families from spend-down status to FamilyCare on November 1. These families will receive health coverage at no cost to them (other than the general copays imposed on all Medicaid beneficiaries last year). As of late November the department had enrolled 1,000 additional families. This makes a total of 10,500 newly insured people due to FamilyCare. That’s great. It also means that there are about 18,000 more eligible families out there still to sign up. Keep them coming!

Noncitizens: Are they eligible? Undocumented people are not eligible for either KidCare or FamilyCare. Federal KidCare and Medicaid rules (enacted as part of the welfare reform law in 1996) require that documented (“legal”) immigrants go through a five-year waiting period before being eligible for federally funded coverage. Illinois (using state funds) covers legal immigrant children in KidCare with no waiting period. In FamilyCare, however, the adults will have to go through the five-year waiting period. The federal law requiring the waiting period for legal immigrants will be considered in Congress early next year when Congress addresses reauthorization of the welfare reform law. Proposals to repeal it will be in play, so watch for advocacy alerts from your sources of information on welfare reform.

Please note, however, that pregnant noncitizens—including the undocumented—are eligible for KidCare under the “Moms and Babies” category. This provision preexisted FamilyCare and will continue.

In summary, documented children are eligible for KidCare; undocumented children are ineligible for KidCare; and undocumented (nonpregnant) adults are ineligible for FamilyCare. Documented adults will not be eligible for FamilyCare until they have been in the United States for five years.—John Bouman

Governor Urged to Fund FamilyCare Fully in '04 Budget

2007-08-27T18:58:47Z

Thousands of people are writing to Gov. Rod Blagojevich to urge him to fund the state’s share of the FamilyCare program fully in his budget proposal. The governor, who expressed support of FamilyCare in his recent “State of the State” address, is to announce his budget plan on April 9. Full funding for FamilyCare would allow the program to cover around 300,000 people, mostly working parents. The state’s 35 percent share of the cost of full implementation would mean $33 million in next year’s budget. The federal government has agreed to cover the majority of the cost (65 percent).

Background. FamilyCare provides health insurance for parents and caretakers of minor children who are currently covered by KidCare or Medicaid. Illinois received federal funding for the first phase—which includes about 28,000 people—of FamilyCare on October 1, 2002. Under past law, Medicaid was available to parents and caretakers with family income at or below 39 percent of the federal poverty level, which is $558 per month for a family of four. Phase one implementation of FamilyCare makes health insurance available to those with family income at or below 49 percent of the federal poverty level, which is $739 per month or $8,869 per year for a family of four. As of late November 2002, the Illinois Department of Public Aid, or IDPA, had enrolled about 11,000 people for FamilyCare.

Full implementation. In addition to the federal funds for phase one, the FamilyCare waiver includes a favorable federal match for state expenditures. The federal government promises to pay a 65 percent match for most of the expense of expanding the program to cover people with income up to 185 percent of the poverty level, which is $2,790 per month or $33,480 per year for a family of four. This expansion has the potential to reach 300,000 more adults—ten times the number covered by the first phase. The federal funds come from the State Children’s Health Insurance Program, or SCHIP.

Cost to the state. IDPA estimates that the state’s share of full expansion will cost $66 million; and the federal contribution covers the total cost, which is about $200 million. In the 2004 fiscal year, however, the program costs only $33 million due to normal delays in ramping up to full enrollment.

These cost figures will fluctuate depending on program enrollment, but IDPA’s estimates are based on 73 percent of eligible people actually enrolling.

Here are seven reasons to implement FamilyCare despite a tight state budget:

1. The FamilyCare waiver provides the state with an unusually good leverage opportunity for federal funds.

2. The federal funds come from an allotment already earmarked for Illinois but were lost because the state did not access it. Illinois lost $159 million last September because of underutilization of the KidCare program. FamilyCare is a strategy that keeps this federal money in Illinois.

3. FamilyCare helps working parents access primary and preventive health care, which keeps them healthy, productive, and employed. And the state saves money over time since, when people lose their job or have an acute medical need that is avoidable, they depend on other state programs.

4. Employers benefit because workers are more productive. FamilyCare also has a premium subsidy option that will help make it affordable for employees to stay in employer health plans. Keeping workers, who are often healthier employees, in their employer health plan helps the actuarial performance of those plans and thus control premium increases for all employees.

5. Children are more likely to be insured and more likely to use primary health care when their parents are insured.

6. FamilyCare is good for health care providers because it decreases the uncompensated care burden.

7. This is an ideal initiative for the budget: smart leverage of federal dollars means help for workers, help for families, and help for the stressed medical system.

For more information, contact John Bouman, 312.368.2671 or johnbouman@povertylaw.org.

Governor Makes It Law, Launches FamilyCare and KidCare Expansion

2007-08-27T18:58:47Z

Gov. Rod Blagojevich, joined by both Democrat and Republican lawmakers, signed on July 1 legislation that expands the FamilyCare and KidCare health insurance programs. The legislation’s chief sponsors were Rep. Sandra Pihos (R–Glen Ellyn) and state Sen. Barack Obama (D–Chicago).

The governor stressed in his remarks at Children’s Memorial Hospital in Chicago that the expansion of FamilyCare would occur over a three-year period. He noted that the current state budget crisis made such an increase in health insurance for low-income working families even more important. FamilyCare, he said, is one of his core priorities, and his administration is committed to see through the full three-year ramp-up of the program.

In the first year, the eligibility level for the program is increased from 49 percent to 90 percent of the federal poverty level (or about $16,500 for a family of four). The increase extends health insurance coverage to about 65,000 working parents.

The KidCare increase takes full advantage of federal law that allows states to set eligibility at 200 percent of the federal poverty level. Illinois had failed to take full advantage of this opportunity because eligibility had been capped at 185 percent. The governor’s decision means that health insurance now is available to about 20,000 more children.

The state investment in health insurance expansion means that it will leverage a federal contribution, which covers 65 percent of program cost. Illinois will make full use of these federal funds, which in previous years had been forfeited and either reallocated to other states or returned to the federal treasury.

Promoting the programs. The expansion of both programs is effective immediately. The Illinois Department of Public Aid, or IDPA, which administers KidCare and FamilyCare programs, intends to enroll automatically approximately 12,000 cases currently enrolled in a Medicaid “spend down” program. The program had been available to people within the new FamilyCare eligibility limit. These families will no longer need to spend down substantial amounts of money in order to qualify for coverage.

FamilyCare applications can be filed at offices of the Illinois Department of Human Services, or IDHS. KidCare applications can be filed with application agents throughout Illinois communities. If a child is already enrolled in KidCare, an eligible parent does not need to file a new application at an IDHS office; the parent can request by telephone to be added to the health insurance coverage. IDPA announced that it would soon expand FamilyCare application procedures to include the same community-based methods used to enroll children in the KidCare program. Additional details about KidCare and FamilyCare are available at www.kidcare.org.

As a practical matter, the new expansion means that, for income up to 90 percent of the federal poverty level, FamilyCare has absorbed KidCare; they are the same, and they cover the whole family. From 90 percent to 200 percent of the federal poverty level, only children are eligible for KidCare. If adults in the higher-income range need medical coverage, they can still apply for the “spend down” program; this makes sense for people with high medical needs even though it requires a significant monthly contribution.

Due to the state’s budget crisis, IDPA does not have a large budget for outreach efforts to enroll eligible children and families. This budget decision was part of a trade-off to devote most of the funds to coverage expansion. Therefore, everyone must assume responsibility to help extend the outreach effort. At a minimum, all organizations working with eligible populations should include information about these health insurance programs in their waiting rooms and publications. Agencies that can do so should consider a more aggressive publicity campaign and offer hands-on help. Ideas on how organizations can help promote the program are available from the Illinois Maternal and Child Health Coalition (www.ilmaternal.org).

FamilyCare Advocates Must Spread the Word

2007-08-27T18:58:48Z

Now that FamilyCare, a health insurance program for low-wage parents who live with their children 18 or younger, is law, every effort must be made to get people enrolled. Unfortunately the state has few resources for an elaborate marketing and outreach plan. So it is up to advocates and social service and healthcare providers to promote the program.

Service providers and others pushing FamilyCare should keep in mind the following eligibility criteria:

FamilyCare, like KidCare, covers doctor visits, dental care, specialty medical services, hospital care, emergency services, prescription drugs and more.
Parents can enroll in the program if they live in Illinois and if their household income does not exceed 90 percent of the federal poverty level (see chart).
Parents must be either U.S. citizens or a permanent legal immigrant who has resided in the United States for five years.
The program also covers relative caregivers that meet all of the other eligibility conditions.

Parents can apply with a KidCare application agent or by contacting an Illinois Department of Human Services Local Office. For more information, call 866.468.7543 or 877.204.1012 (TTY).

Total Family Size, including parents	Monthly Income equal to or less than: 90% of federal poverty level
2	$909
3	$1,145
4	$1,380
5	$1,616

Report: Good economic times not so good for young men

In its report “Boom Times: a Bust for Less Educated Young Men,” the Center for Law and Social Policy, or CLASP, reports that men 18 to 24 with a high school diploma or less were less likely to work in 1999 than in 1979, another period of economic growth. CLASP also reports that African American men in the same age group were even worse off. The employment rate for African American men dropped 13 percentage points, from 66 percent to 53 percent.

In response to the grim data, CLASP recommends an expansion of the Earned Income Tax Credit, increasing the minimum wage, setting more realistic child support orders by states, public jobs for youths, more quality job training programs, and improving pre- and postrelease assistance for prisoners.

A copy of the report can be found at www.clasp.org.

California program evaluated

The Economic Roundtable, a private nonprofit organization located in Los Angeles, recently released a report, “Prisoners of Hope,” an evaluation of the Los Angeles County welfare program, Greater Avenues to Independence, or GAIN. The program was one model for the 1996 federal welfare reform law. The report includes the following recommendations:

Promote community college, adult education, or vocational training. The evaluators found that parents who participated in education and training increased their earnings by 46 percent up to three years after entering the labor force. However, even though half of welfare parents in the county are in need of a high school diploma or English skills, these parents were twice as likely to be sent to “Job Club” (three weeks of motivation and job search program) than education or training programs.

Almost half of GAIN participants entering the labor force between 1998 and 2001 had no earnings in 2001; 85 percent were poor by federal standards.

Identify and serve welfare recipients with domestic violence, mental health, or substance abuse problems. The participants with one or more of these barriers were twice as likely to be sent to “Job Club” than referred to clinical services, and four times as many were sanctioned than completed clinical treatment. These parents also were the lowest earners with an average income of $2,950 in the year 2001.

Screen all parents who have used half of their lifetime limit on welfare for domestic violence, mental health, substance abuse, and disabilities, and provide appropriate clinical services and exemptions from time limits. Sixty-five percent of parents reaching the five-year time limit had one or more major barriers to employment, with a growing proportion of disabled recipients expected to reach the time limit by 2005. Parents projected to reach the time limit between 2003 and 2005 had an average earned income of $5,391 in 2001.

“Prisoners of Hope” can be found at www.economicrt.org.

Second Chance at KidCare, FamilyCare Funds

2007-08-27T18:58:48Z

Congress in August passed a bill allowing states a second chance to use funds that had been allocated to them under the State Children’s Health Insurance Program, or SCHIP, known in Illinois as KidCare and FamilyCare. Illinois and most other states had forfeited these funds by failing to spend them on children’s health insurance. The bill makes these forfeited funds available for another year if the states can draw them down and use them. Illinois gets a second chance to spend $89 million that it had forfeited.

SCHIP allots to the states annual federal funds at highly favorable matching rates. For Illinois, this matching rate is 65 percent, compared to the standard Medicaid matching rate of 50 percent. For every dollar that KidCare and FamilyCare cost, the federal government pays $0.65 from the state’s SCHIP allotment. However, the states must spend each year’s allotment within three years, or else it is reallocated to other states that have spent their allotments. Anything left over reverts to the federal treasury.

SCHIP began in federal fiscal year 1998. The states had until the end of the 2000 federal fiscal year to spend their 1998 allotment. They had until the end of the 2001 fiscal year to spend the 1999 allotment; until the end of the 2002 fiscal year to spend the 2000 allotment; and until the end of the 2003 fiscal year (September 30) to spend the 2001 allotment.

The problem. Illinois and many other states could not spend their allotments within the three years. In the case of Illinois, this was because (1) Illinois had a slow start enrolling children in KidCare and so spent the funds slowly at first and (2), more important, the SCHIP formula allotted to Illinois more funds than Illinois could spend on children alone. That is why Illinois had plenty of SCHIP funds available to fund the FamilyCare program, and why the federal government granted the FamilyCare waiver for Illinois to use these funds.

What the bill does. The “SCHIP fix” allows states a second chance to spend the 1998 and 1999 fiscal year funds that they forfeited to the federal treasury (not the funds already reallocated to other states). They may keep half of their unspent 2000 fiscal year funds (which originally would have been forfeited last year but had been temporarily preserved while Congress debated the “SCHIP fix”). And they will have another year to spend 2001 fiscal year funds that they are scheduled to forfeit at the end of September 2003.

What Illinois gets. The bottom line is that Illinois regains access to $20.3 million in forfeited 1998 and 1999 fiscal year funds and $68.7 million of unspent 2000 fiscal year funds. This total of $89 million must be spent by September 30, 2004, or it will be lost permanently. Illinois has until September 30, 2005, to spend half of the 2001 fiscal year funds—tens of millions of dollars—that it would have forfeited at the end of September 2003.

How Illinois can use it. The challenge for Illinois is to find ways quickly to access this valuable lode of federal funds for health insurance. One is to maximize enrollment in KidCare and FamilyCare as quickly as possible. Another is to prompt families aggressively to bring their children to the doctor for needed well-child examinations and health screens and any resulting treatment. Illinois can also consider speeding up the FamilyCare phase-in. This year Gov. Rod Blagojevich promised to move FamilyCare eligibility up to 185 percent of the federal poverty level over the next two years. If he did it all in next year’s budget, Illinois would have a better chance to access SCHIP funds. Illinois could consider increasing KidCare eligibility beyond the current 200 percent of the federal poverty level. The budget crisis, of course, makes these last two suggestions difficult, but full utilization of highly favorable federal matching funds for a valuable program is well worth considering.

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

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

2007-08-27T18:58:48Z

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.

State Budget Remains in Limbo: Fight for Crucial Antipoverty Programs Continues in New Fiscal Year

2007-08-27T18:58:48Z

Illinois lawmakers wrapped up the scheduled Spring legislative session at the end of May without a new budget. To now pass a spending plan, 60 percent of legislators in both houses must agree, which means votes from both parties are needed. State lawmakers did not agree on a budget in June, because Democrats could not agree among themselves and Republicans have injected new issues to the debate. The bottom-line: Illinois entered the new fiscal year on July 1 without a complete budget in place.

Stop-gap prevents general shutdown, but hurts key programs

The General Assembly did manage to pass a one-month operating budget to avoid a major government shutdown. Medicaid coverage and need-based cash assistance programs can continue operating without interruption, because of a court order obtained 11 years ago during the last budget impasse; the Shriver Center reminded state officials of this court order in June to assure continued assistance.

Still the July stop-gap budget contains only funds for “core” services—it includes only two-thirds of the money that would be in a regular budget; and, it includes no funding for new programs. In addition, severely damaged are crucial community services, which private agencies provide through contracts. Such services include welfare-to-work, homeless prevention, substance abuse treatment, immigrant services, teen parent programs. The stop-gap measure appropriates no money for these services, and state agencies cannot contract with providers without them. Technically, the temporary budget does empower a state agency to transfer funds from other budget lines to cover contracts it deems important enough to fund in July, yet realistically, few contracts are expected. Therefore, many social service providers have to find a way to “carry” the programs or shut them down indefinitely.

The stop-gap budget is only effective during July. By the end of the month, everyone hopes that lawmakers will enact a regular full-year 2005 budget plan. If lawmakers fail, they must consider another stop-gap measure for August.

Debate involves crucial priorities

The state budget contains issues of immense importance to low-income people. Gov. Rod Blagojevich proposed increased spending for Medicaid (7 percent, compared to 13-14 percent inflation nationwide in private health insurance), FamilyCare (year two of a three year plan to fully implement the program), child care (annualizing a change that actually was enacted last year by unanimous votes in both chambers), early childhood education (also the second year of a prior commitment), basic state aid for local schools, and a number of other programs. These are core priorities for the governor, most Democrats, and some Republicans.

There also is a consensus among leadership that state government must cutback; for example a 3.5 or 4 percent across-the-board reduction for state agencies is one idea, another is to close certain state prisons or other facilities. There appears, however, to be no consensus on the exact lineup of such austerity measures; for example, what programs shall be exempt from cuts, and what facilities to close?

Problem is revenue

With a revenue shortfall of over $2 billion, the most serious disagreement is over how to fund the final spending plan. While lawmakers and the governor have floated many ideas on how to raise the money, there is still no agreement.

The governor, whom Senate Democrats generally support, has proposed a revenue plan that includes closing corporate tax loopholes, using special state funds that remain unspent, and borrowing. House Democrats, most of whom generally support the governor’s spending plan, want to borrow less and close fewer corporate loopholes.

And since the governor strongly opposes a tax increase and has yet to propose alternatives, the current position of House Democrats is to oppose some or all spending, although there is no unified caucus position. The caucus, in fact, has continually provided core support for the governor’s spending initiatives.

Although House Republicans appear willing to compromise, Senate Republicans will not support a revenue increase to cover a spending increase no matter the importance of a service or if it was clearly promised in the past. It looks as if Senate Republicans will insist on reducing spending to match existing revenue; they however have not stated which populations or services would be cut.

Some lawmakers have injected huge and controversial non-monetary issues into the budget negotiations. For example, one such bargaining chip would enact reforms to reduce medical malpractice premiums by limiting damage awards for injured patients. Another would affect state-mandated health insurance provisions, which require Illinois policies to include coverage for breast and cervical cancer screens, mental health coverage, family planning services, and other care. The proposal is still to require employers to offer policies that include all mandated services, but also to allow them to offer policies with either some or none of such services.

Health care dominoes

The budget dispute has snarled Medicaid, KidCare, and FamilyCare at many levels. The state last year approved a plan to assess hospitals and circulate the proceeds through the Medicaid program to draw federal matching funds to maintain and increase health care statewide. At stake is $500 million—money already assumed in this year’s budget. The plan must get federal approval, and the federal officials require states to demonstrate clearly that they will use these funds to maintain or expand health care services.

The governor’s budget plan does so because it does not reduce eligibility guidelines for, or cut services under, current health programs, and it also contains a Medicaid increase to keep pace with inflation. In addition, the FamilyCare expansion provides the necessary proof that Illinois is actually expanding care rather than using the hospital assessment plan to close budget holes. Thus, the governor’s health care budget not only funds important priorities, but also is essential to win approval for the hospital assessment plan.

Moreover, in its own right FamilyCare is an excellent leverage of federal funds. Federal funds cover 65 percent of the cost to expand FamilyCare. Furthermore, if Illinois does not use the federal money available for FamilyCare, the money returns to the federal government and other states will use it to insure their residents.

Maintain pressure

The governor’s spending plan hits the right priorities. It includes targeted expansion, holds the line on crucial services, and maximizes the draw-down of federal money. Now he and state lawmakers have to create a revenue plan to cover it.

These are not ordinary times. The Blagojevich administration began last year in the teeth of a historic state fiscal crisis, already a couple of years in progress. Illinois has an antiquated and inadequate revenue system that is unable to fund crucial state services even in good times. The recession has both exposed and deepened this flaw. Considerable reform of the income, sales and property tax system is necessary to avoid an annual budget crisis and to create a system more aligned with the modern economy. Since such reform is unlikely in an election year, new and the expansion of old (gaming) revenue ideas are under consideration.

It is understandable that all the players in state government are struggling this year to find ways to shore up revenues so that excellent policy priorities, which most support and their constituents demand, can move forward. Now is the time for our leaders to select adequate revenues from their menu of choices and then enact a spending plan that includes these priorities. After that, it is essential for responsible leader to address significant reform of the Illinois revenue system.

New FamilyCare Income Guidelines

2007-08-27T18:58:48Z

The Illinois Department of Public Aid has confirmed that the effective date for the increase in eligibility for FamilyCare from 90 percent to 133 percent of the federal poverty level is September 1. The department intends to automatically enroll all the parents already on “spenddown” Medicaid that are within the new income guidelines—some 20,000 parents. This means that such parents, who currently pay an amount every month to meet their “spend-down” before they are covered by Medicaid, will now be covered without any charge.

As for additional enrollment, it is up to all of service providers and advocates. Please identify eligible families and encourage them to enroll.

The new income guidelines (by family size) are:

2 person:	$16,612 (annual); $1,384 (monthly)
3 person:	$20,841 (annual); $1,698 (monthly)
4 person:	$25,071 (annual); $2,089 (monthly)
5 person:	$29,300 (annual); $2,442 (monthly)

Details about FamilyCare enrollment are on the IDPA website at www.kidcareillinois.com. As Illinois Welfare News goes to press, the old income guidelines remain on the IDPA website (but it should change on or around September 1).
Stay tuned later in the year for action steps on the final year of the FamilyCare rollout—expansion to 185 percent of the poverty level in next year’s budget.