FamilyCare's Final-Year Part of Budget Negotiations Would Extend Health Insurance Options to More Working Families

Gov. Rod Blagojevich has proposed $5.75 million in state funds in his 2006 fiscal year budget for the FamilyCare program to fund fully the third and final year of his promised three-year phase-in plan for the program. The funds will leverage $11 million of federal funding next year for this expansion of health insurance. The budget is being negotiated in Springfield during May.

This budget allocation will increase FamilyCare’s eligibility ceiling, effective January 1, 2006 , from the current 133 percent of the federal poverty level ($25,000 for a family of four) to 185 percent ($35,000 a year for a family of four). Some 74,000 more parents will qualify for health insurance coverage, bringing the total potentially eligible for FamilyCare health insurance to 400,000.

The newly eligible group will also qualify for the “premium subsidy choice.” This group will be able to choose either to be covered by the state’s insurance (Medicaid) or to receive a cash subsidy to help pay the premium to be covered by an employer’s health insurance or private insurance.

FamilyCare offers these health insurance options for parents or caretakers of minor children (the children are already covered under Medicaid or KidCare). The federal government pays 65 percent of the program costs.

This last year of the FamilyCare ramp-up completes a promise made over two years ago, but some legislators are worried about expanding a program during a difficult budget year. However, the General Assembly has supported the governor on FamilyCare in each of the last two years, which were just as difficult budget years. Here are the leading reasons why FamilyCare is a priority deserving support in any kind of budget year:

• 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 percent 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 Illinois does not use it. On September 30, 2002, Illinois lost $159 million of its own money, which was given to other states to insure their families. 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.
• FamilyCare helps control the cost of health insurance for employers. The premium subsidy option will help employees afford to stay in employer health plans. When these on-average healthier employees participate in health plans, those plans have a better actuarial performance, and this helps control premium increases.
• FamilyCare decreases the uncompensated care burden on health care providers. With more people insured, more will be able to pay their medical bills.

This is an ideal positive initiative for the budget: smart leverage of federal dollars (which Illinois otherwise loses), help for workers and employers, help for children and families, and help for the stressed medical system.