Shriver Center: May 2007

Shriver Center Convenes Roundtable on Medicaid Citizenship Documentation Rule

2007-05-15T20:31:10Z

The Medicaid citizenship documentation rule, as implemented in states around the country, continues to threaten the health coverage of millions of U.S. citizens who are fully eligible for Medicaid. The Sargent Shriver National Center on Poverty Law last month convened a two-day meeting of experts and advocates from Nebraska, Michigan, Mississippi, Kansas, Wisconsin, Virginia, New Mexico, and Illinois. The Chicago law firm Goldberg Kohn hosted the meeting. The roundtable concentrated on the successes of Bell v. Leavitt, the national class action lawsuit challenging the citizenship documentation rule.

The experts and advocates discussed actions that could be taken on the state level to mitigate further the rule’s harmful effects now that the Bell plaintiffs voluntarily had the case dismissed. Organizations representing the plaintiffs in Bell were on hand: the National Health Law Program and Health & Disability Advocates besides the Shriver Center and Goldberg Kohn. The National Senior Citizens Law Center, the fifth organization representing the Bell plaintiffs, could not attend the meeting. Representatives from the National Center on Law and Economic Justice and the Center on Budget and Policy Priorities attended.

The meeting covered what had been attempted and accomplished in Bell and the reasons why a national class action was no longer the best vehicle to attack the citizenship documentation rule. Advocates from the states explained how the documentation requirements were being implemented in their respective states, and the roundtable discussed ways to challenge, in lawsuits against federal or state officials, the federal statute and regulations and state implementing procedures on the documentation requirements. The conveners also discussed strategies to change federal documentation requirements to lessen their harm to eligible citizens. They agreed to continue communicating about these ideas and to coordinate their advocacy efforts.

Savings for Life

2007-05-15T20:33:39Z

All Americans should have opportunities to save toward important goals such as education, homeownership, and retirement at every point of the life cycle, according to a new report by the Aspen Institute. In Savings for Life: A Pathway to Financial Security for All Americans the Initiative on Financial Security of the Aspen Institute introduces a new way of understanding national savings policy and a set of pragmatic savings vehicles that can help more people achieve financial security.

The report’s proposals include four innovative savings vehicles: Child Accounts (modeled on the United Kingdom’s Child Trust Fund); Home Accounts (to be used for the down payment on a home); America’s IRA (a standardized, simple Individual Retirement Account with a government match for working Americans without access to employer-based retirement plans); and Security “Plus” Annuities (basic life annuities to provide an additional layer of lifetime, guaranteed income as a complement to Social Security).

The policy recommendations for increasing financial security for all Americans—across income levels—culminate more than two years of a groundbreaking, bipartisan collaboration with chief executive officers from the financial services sector and public policy experts to identify market-based strategies for more Americans to save, invest, and own. The full report and a video from the May 3 release event are available at www.aspeninstitute.org.

The Sargent Shriver National Center on Poverty Law and others throughout the United States are working to implement many of the policies suggested in the Aspen Institute report, including universal child savings accounts and expansion of Individual Development Accounts. For more information on Illinois efforts, contact Dory Rand at doryrand@povertylaw.org.

Bipartisan Bill Would Revitalize the Children’s Health Insurance Program

2007-05-15T20:44:38Z

S. 1224, the Children’s Health Insurance Program (CHIP) Reauthorization Act of 2007 that Senators Jay D. Rockefeller IV (D-WV) and Olympia Snowe (R-ME) introduced last month, would expand eligibility while remedying the current funding shortfall in the children’s health care program. The bipartisan proposal more than doubles funding for the program over the next five years and significantly improves the federal reimbursement mechanism to match states’ efforts. These reforms would create a more reliable source of funds for states and help sustain the program.

With nine million American children currently uninsured, the CHIP debate takes on greater significance as advocates look for ways to cover all kids. But successful programs such as the State Children’s Health Insurance Program (SCHIP) are already in place and, if expanded, can cover virtually all children today. Lawmakers support expanding and permanently securing SCHIP so that no American child will ever have to go without medical care.

According to Senator Rockefeller, “the legislation [adjusts] state’s allotments to reflect both states’ current funding needs and the funding they need to make more progress in covering uninsured children in their states; explicitly incorporating health inflation and population growth into the allotment structure; [and] guaranteeing each state an unprecedented level of stability and predictability over time in its access to federal CHIP funds….”

“As a VISTA volunteer in southern West Virginia, I worked with children who had gone years without seeing a doctor or dentist,” Senator Rockefeller said. “Healthcare should not be a luxury. Regardless of where someone lives or what they do, everyone has a right to healthcare—especially our children.”

The CHIP reauthorization act would make it easier for states to identify additional eligible children by allowing states to utilize financial information of other public benefit programs. Moreover, it provides higher matching rates for states that improve information coordination and offers a financial safety net to states with more SCHIP enrollees.

The bipartisan bill would give states the option of opening up enrollment to pregnant women and legal immigrant children or pregnant women. States may choose to grant children of state employees coverage under limited circumstances. The bill would authorize states to spend CHIP dollars on subsidies for working families that are currently receiving employer-based health insurance but are unable to afford skyrocketing premiums and copayments.

Reducing Predatory Mortgages

2007-05-15T20:46:11Z

Over two million households in the subprime market by year’s end will either have lost their homes to foreclosure or hold subprime mortgages that will fail over the next several years. These foreclosures will cost homeowners as much as $164 billion in home equity.

In light of this prognosis, Congresswoman Stephanie Tubbs-Jones (D-OH) recently introduced the Predatory Mortgage Lending Practices Reduction Act (H.R. 2061). This legislation would set minimum licensing standards for mortgage brokers, authorize $2 million for training and certifying of mortgage brokers, authorize $2 million for housing counseling to raise awareness of predatory practices, set minimum disclosure standards, establish standards for appraisals, and create civil penalties for violation.

The legislation would set up best practices for dispute or complaint resolutions. A best practices plan would be established and maintained in accordance with regulations that creditors would face. Employees of the creditors would be trained on best practices and would have to be reviewed and evaluated on their performance under the plan. H.R. 2061 would make brokers accountable and would set up funds to continue to educate consumers about predatory practices. A number of other bills will soon be introduced to deal with predatory lending, a problem affecting many families nationwide.

For more information, contact Dory Rand at doryrand@povertylaw.org or Patrick Hain at patrickhain@povertylaw.org.

Advocates Litigate to Improve Access to Health Care for Children

2007-05-15T20:48:43Z

As advocates across the country encourage legislators to create innovative health care plans in their states, they can look to the courts for help, following the lead of health care advocates in Illinois. In 2004 a groundbreaking federal class action lawsuit, Memisovski v. Maram, established that Illinois was violating the Medicaid Act by failing to establish a system to deliver health care to all covered children. This decision led to a negotiated settlement offering comprehensive new policies ensuring preventive care to all Illinois children with Medicaid.

The May–June 2007 issue of Clearinghouse Review: Journal of Poverty Law and Policy’s article “Litigation to Improve Access to Health Care for Children: Lessons from Memisovski v. Maram” describes the ideas that went into building the record, the decision, the outcomes, and the lessons learned in the process. John Bouman, president of the Sargent Shriver National Center on Poverty Law and cocounsel on the lawsuit, explains the lawsuit’s challenges such as the enforceability of plaintiffs’ rights, naming plaintiffs and trial witnesses, and using the state’s own data against itself. In their detailed description of the case, Bouman and coauthors and cocounsel Frederick H. Cohen and David J. Chizewer of Goldberg Kohn and Stephanie Altman and Thomas Yates of Health and Disability Associates suggest how such challenges can be handled.

Lack of access to health care confines people to poverty by limiting their education, employment, and family assets, and reforming the nation’s health care system is an essential step in helping Americans move out of poverty. In view of this, “Litigation to Improve Access to Health Care for Children” shows that the judicial system is an important route for advocates to take to improve health care.

Published by the Sargent Shriver National Center on Poverty Law, the May–June 2007 Clearinghouse Review features the following other articles by advocates and attorneys nationwide:

·    “Against Employer Retaliation: Protecting Low-Wage Workers Who Oppose Sex Discrimination” by Michael I. Marsh and Evangelina Fierro Hernandez
·    “The Modern-Day Poll Tax: How Economic Sanctions Block Access to the Polls” by Erika L. Wood and Neema Trivedi
·    “Preserving Tribal Families, Culture, and Communities: California’s Legislation to Enforce the Indian Child Welfare Act” by Maureen Geary and Mark Radoff
·    “Wait a Minute: Slowing Down Criminal-Activity Eviction Cases to Find the Truth” by Lawrence R. McDonough and Mac McCreight
·    “‘I Just Need More Time’: Making the Case for an Extension of Time to Vacate a Rental Unit as a Reasonable Accommodation” by Nisha N. Vyas
·    “Affirmatively Litigating: How the Federal Rules of Civil Procedure Require Early Case Planning: The Rule 26(f) Conference” by Greg Bass
·    “Medicare Coverage of Dental Care Following Radiation Treatment and Chemotherapy” by Sally Hart and Jamie L. Wyman
·    “Left Behind Before Katrina and Left Behind After” by William P. Quigley

Published bimonthly by the Shriver Center, the Review is an advocate’s best resource for information on developments in poverty law. Each issue of the Review features in-depth, analytical articles, written by experts in their fields, on topics of interest to poor people’s and public interest lawyers. Substantive areas covered include civil rights, family law, disability, domestic violence, housing, elder law, employment, health, and welfare reform. The Review also includes case notes written by legal aid attorneys from across the country.

To subscribe to the Review, go to www.povertylaw.org.

Health Policy Expert Endorses Governor Blagojevich’s Illinois Covered Plan

2007-05-15T20:54:45Z

Kenneth Thorpe, former deputy assistant secretary for health policy in the Clinton administration, last month released a report detailing how Gov. Rod Blagojevich’s Illinois Covered plan would yield a net savings of nearly $9 billion between 2008 and 2011 for Illinois families and businesses.

Thorpe’s Estimated Savings to Employers and Workers Under the Illinois Covered Plan predicts what Illinois’s health care system will look like in four years if the system is unchanged. Thorpe finds that if no changes are made, in 2011 employers will spend 10.25 percent of payroll on health care expenditures, employees will collectively have spent $4.4 billion on health care premiums over the next four years, health care costs will have grown more than twice as fast as wage inflation, and there will be an additional 500,000 uninsured Illinoisans by 2010—bringing the total of uninsured to 2.3 million. According to Thorpe, who is a professor of health policy management at Emory University, this spike in the number of uninsured will shift costs to those with insurance and increase private health insurance expenditures by 9 percent.

Thorpe outlines each initiative in Governor Blagojevich’s Illinois Covered plan and projects a 9 percent savings on premiums following the full implementation of the program in 2011: 3.8 percent savings from Roadmap to Health, a program aimed at improving preventive care and the management of chronic illnesses; 2.5 percent savings from Electronic Records and Information Technology, a mandate to institute electronic medical records and to improve technological resources; and 2.7 percent savings from Reduction in Cost Shifting, due to the reduction in the number of uninsured Illinoisans.

Thorpe emphasizes the necessity for health care reform in Illinois not only because medical coverage for the uninsured is needed but also because millions of Illinoisans are financially threatened by job layoffs, benefit cutbacks, and skyrocketing medical bills. If Illinois Covered is adopted, Illinoisans covered on the private market can expect to save $675 for an individual contract and $1,775 for a family policy.

Thorpe’s final argument is that Illinois Covered is good for business. His report demonstrates that businesses will save nearly $2.5 billion by 2011 due to reduced cost sharing and reasonable regulation of the insurance industry.

Estimated Savings concludes that Governor Blagojevich’s Illinois Covered plan will accrue $8.4 billion in net savings and that each $1 of public revenues spent on Illinois Covered will generate more than $2 in new health care savings mainly through reduced growth of health insurance premiums paid by Illinois businesses, families, and individuals.

To learn more about Thorpe’s report, visit http://www.americasagenda.org/. To learn more about Illinois Covered, visit http://www.illinoiscovered.com/. To learn more about what you can do to support Governor Blagojevich’s Illinois Covered plan, visit http://www.povertylaw.org//advocacy/health/illinoiscovered.html.

MAY 2007 PAR

2007-05-15T21:07:03Z

Funding Health Care For All and Important State Services

2007-05-16T17:53:33Z

The Illinois Debate Over the Right Mix of Revenues

A highly public dispute over tax policy is dominating the political landscape in Illinois this year. Governor Rod Blagojevich has proposed a budget that would accomplish four important and longstanding public policy aims. The budget would dramatically increase and alter the basis for funding public education, ending decades of shameful imbalance and relieving pressure on the property tax. Second, it would also rescue the state's desperately underfunded and constitutionally mandated pension programs for state employees and teachers. Third, it would resolve the state's chronic "structural deficit" by creating revenues responsive to the economy and reducing large costs (like the pension fund catch-up payments) that have consumed most of any revenue growth under the current system. Finally, the budget would establish a program, called Illinois Covered, which would offer affordable decent health coverage to everyone in Illinois.

These four issues have festered for so long in Illinois that there is relatively broad consensus that all of them need to be addressed. Each issue independently is an acknowledged crisis. This is one of those rare times when a consensus exists that substantial new revenues are needed. In the first legislative session after an election, the timing is also right (conventional wisdom holding that tax increases done right after an election stand the best chance of being forgotten by the time the next election rolls around). The challenge, of course, is to identify and approve of the specific revenue measures in a climate where any proposed change in the existing revenue scheme is immediately tagged as having "winners and losers" by the interest groups. The reality is that all Illinoisans are losing under the current tax structure.

The centerpiece of Governor Blagojevich's proposed revenue reforms, which would provide the bulk of the money needed to fund the four reforms listed above, is a new gross receipts tax, or GRT. The GRT would replace the corporate income tax and would tax all business revenue, regardless of profitability. It taxes this broad base at a modest rate, generating substantial revenues overall, but having minimal impact on particular business transactions. Governor Blagojevich's proposal would tax transactions involving goods at 1% and services at 2%. He would exempt non-profit organizations, retail food and drug transactions, most businesses with revenues under $5 million (over 90% of all businesses in the state), goods sold for export to other states or countries (50% of all goods manufactured in Illinois), and other transactions. The proposal would generate $7.5 billion and fund all of the priorities in the budget.

The Governor justifies replacing the corporate income tax with the GRT on the grounds that the corporate income tax is so riddled with loopholes that many large corporations are now avoiding paying any tax at all, or are making only nominal payments. He points out that last year, 37 Fortune 100 companies with average sales of $1.2 billion in Illinois paid no corporate income tax, that 12,500 of the largest corporations doing business in Illinois paid an average of $151 in corporate income taxes, and that overall receipts from the corporate share of the income tax have fallen from 21 to 12 per cent of total income tax receipts.

Opposition to the Governor’s Funding Proposal

The opposition to the GRT from the business community has been swift and fierce. Interestingly, the opposition has focused on the tax proposal and not the spending priorities. This is telling. Education, healthcare, the pension crisis, and the antiquated and inadequate Illinois revenue system are all spending imperatives that are supported broadly and that deeply fracture the business community. There is much business support, although in varying configurations, for new funds for each of these priorities. The opposition therefore has focused on one factor: the GRT, a new business tax, not the programs.

The Illinois Chamber of Commerce, the Illinois Manufacturer’s Association and the rest of the mainstream business community has united in opposition to the Governor’s GRT plan, contending that it will put Illinois at a competitive disadvantage that will cause businesses to layoff workers, move out of state, or close. Business sounded the same false alarms when Governor Ogilvie proposed a state income tax decades ago and just last year when Illinois raised the minimum wage. Indeed, the same arguments were used to oppose the 8-hour day and the prohibition of child labor. Illinois has a world-class trillion-dollar market that businesses do not exit on emotional grounds. It is interesting that in contrast to the mainstream business community, the Black Chamber of Commerce supports the GRT proposal since most of their members would be exempt from it and they recognize the need to address the skyrocketing cost of health care and our broken education funding system.

On the other hand, as with any tax, there are credible arguments against the GRT. The rates proposed by the Governor are higher than the GRT rates in other states that have such a tax. Therefore, there is a higher possibility that some or all of the tax will be passed on to consumers, which creates a "regressive" impact. The taxation of every business transaction creates an accumulation of taxable events as an item proceeds through the business process to its eventual market. These and other arguments must be reckoned with in assessing the Governor's proposal.

It is important, though, that the perfect not become the enemy of the good. All tax increases are imperfect, creating unfairness and avoidant behavior on the margins. Economists since Adam Smith have preferred broad-based, low-rate taxes like the GRT because they minimize disruption to the economy, unfairness and avoidant behavior.

Moreover, some elements of the business community, led by the Civic Committee of the Commercial Club of Chicago, recognizing the need for substantial new revenues and reform of the revenue system, and recognizing the strong spending needs, proposed a package of new taxes before the Governor proposed the GRT, and not including the GRT. The package features an increase in the income tax and expansion of the sales tax to cover consumer services. This proposal is in substantial harmony with a package proposed by education and revenue reform advocates, led by the A+ Illinois Coalition, now contained in Senate Bill 750. The main difference is that the reformers' proposal includes a property tax reduction (a "swap") and the business version does not. The opposition of these groups to the GRT proposal is formidable, because they bring other revenues to the discussion.

The main flaw in these alternative proposals in their current form is that they do not support the enactment and funding of a program to provide affordable health coverage for all. These proposals also do nothing to combat the corporate tax avoidance that the Governor has highlighted and they raise fairness issues by extending the sales tax to cover consumer services like haircuts that everyone uses but not professional services like attorneys and accountants that the well-to-do are more likely to use. The Governor also has pledged not to raise income or sales taxes, believing that they tax individuals while corporations escape paying their fair share. It is in this context that he has called the GRT proposal his "tax fairness" plan.

For more information on Illinois Covered, visit us on the web here, or respond to this article directly by emailing John Bouman.