Final Step of FamilyCare Implementation Will Help Workers

FamilyCare, one of the signature achievements of Governor Blagojevich’s administration, provides health insurance for parents of minor children who are already covered under Medicaid or KidCare.  Governor Blagojevich has moved forward with his promised implementation of FamilyCare over a three year period, starting in 2003 and coming to a head in the first months of 2005.

The federal government has promised very favorable 65% matching funds to pay for most of the costs of expanding Family Care all the way to 185% of the federal poverty level.  For the first two years of his plan during state fiscal years 2004 and 2005, the Governor pushed an expansion of the program from 49% to 90% of the poverty level and then up to 133%, making 77,000 more families eligible for health insurance at each increase.

Features of the final step of FamilyCare implementation

The third and final year of the Governor’s implementation plan is scheduled to be announced in his budget message in February 2005 for state fiscal year 2006.  The final step of FamilyCare implementation will increase eligibility from 133% of the poverty level to 185%, a household income of  $34,044 for a family of four, effective July 1, 2005.  Another 77,000 families would be offered health insurance.  This moves eligibility well into the ranks of low income workers, those who struggle to meet their living expenses and afford health insurance even when their employers offer it.

This final step also includes the “premium assistance option”.  Under this option, the working parent can choose to be covered either by the state’s insurance (basically the same as Medicaid), or to accept a monthly cash amount per family member, probably about $75, to partially subsidize the premium for private insurance or employer-sponsored insurance.  This choice is free and can be reversed back to state health insurance.  Generally speaking, the state’s insurance will usually offer fuller coverage and lower expenses, but the private or employer-based insurance will offer better access to a variety of doctors.  The parents will be able to choose which is more important to them.

Employers should benefit as well from the premium assistance option.  The cost of employer-sponsored insurance has been going up, and as a result more and more employees are declining the coverage, especially those  who are basically healthy.  As a result, the employees left in the employer’s insurance pool are less healthy, so the employer’s premiums increase even faster.  The FamilyCare premium assistance should help to keep more of the healthier employees in the employer-sponsored plans, thus helping to control the premiums for all of the employees covered by the plan.

Why FamilyCare makes sense

Governor Blagojevich is to be commended for holding steadfast to his FamilyCare promise, in spite of the difficult state budget.  He understands all of the reasons why FamilyCare makes sense.  These reasons include:

• Children benefit -- they are more likely to be insured and more likely to use primary health care when their parents are insured.
• Illinois gets unusually high 65% federal matching funds for FamilyCare.
• The federal funds come from a “use it or lose it” annual allotment earmarked for Illinois but taken away if we do not use it.  FamilyCare keeps this federal money in Illinois.
• FamilyCare helps working parents access primary and preventive health care, which keeps parents healthy, productive, and employed.  It also helps families avoid the stress of debt and bankruptcy from medical bills.  
• FamilyCare completes welfare reform – without it, low income working families with health care needs are punished for working by losing their health insurance coverage.
• Employers benefit because workers are more productive.  Also, the premium assistance option helps employees afford to stay in employer plans.  When these on-average healthier employees participate in health plans, those plans have better actuarial performance and this helps control premium increases for all employees.
• FamilyCare is a net gain for health care providers because it decreases the uncompensated care burden.
• This is an ideal positive initiative for the budget:  smart leverage of federal dollars (which we otherwise lose), help for workers and employers, help for children and families, and help for the stressed medical system.