Illinois lawmakers may have balked at establishing a state-run health insurance marketplace, but the controversial federal reforms known as “Obamacare” appear to be working nonetheless.
The Illinois House opted not to vote on a bill during the recent veto session that would have created a state-run “exchange” on which individuals and businesses could purchase health insurance that meets certain benchmarks. The House adjourned a day early last week without voting on the bill, meaning the state will miss out on about $270 million in federal funds set aside to create an exchange.
However, Illinois residents can still access the federally run exchange, and the underlying law seems poised for a successful year with strong participation in the first weeks of enrollment.
A health insurance exchange is meant to provide uninsured people a place to compare insurance plans that meet basic standards of coverage. Fourteen states have created their own exchanges, and the federal government operates an exchange for residents of the remaining states. Illinois could have claimed $270 million in federal funds to create its own exchange, but that money won’t be available after Dec. 31, and the House isn’t scheduled to meet again for the rest of the year.
State Rep. Robyn Gabel, D-Northbrook, sponsored Senate Bill 636 in the House to create the state-run exchange, but she said she “ran out of time” to get enough support. Asked by a reporter to explain what factors prevented other members of the House from supporting the bill, Gabel walked away. It was clear even before adjournment that no Republicans in the House would support the bill, and some of Gabel’s fellow Democrats were on the fence, peeling away crucial votes.
The bill was particularly timely in light of an ongoing U.S. Supreme Court case that could strip subsidies from people who bought insurance through the federal exchanges instead of state exchanges. In King v. Burwell, several individuals sued the federal government saying the language of the Patient Protection and Affordable Care Act excludes subsidies or tax credits for people purchasing health insurance through the federal exchange. The subsidies or tax credits are based on income and family size, and they are intended to make health insurance affordable for everyone.
Democratic lawmakers in Washington, D.C., say there was a drafting error in the law, and their intent was to offer subsidies or tax credits in the state and federal exchanges. Meanwhile, Republicans say the letter of the law must be followed. A decision in the case is expected in summer 2015.
Joan Sheforgen, interim director of the Champaign-based Campaign for Better Healthcare, says Illinois’ failure to establish a state-run exchange leaves it vulnerable to the Supreme Court’s decision in King v. Burwell. Because the case focuses on subsidies or tax credits through the federal exchange – which many Illinoisans used to purchase their insurance – a decision upholding the letter of the law could leave 167,000 Illinois residents unable to afford health insurance.
“I think the legislators on both sides of the aisle really let the citizenry of Illinois down by not doing their jobs,” Sheforgen said. “They are down there to protect the citizens of Illinois. They have not done that.”
Sheforgen doesn’t blame Gabel for not calling the bill, however.
“There’s always a danger in ‘do you call it; do you not call it’,” she said. “What are the political ramifications if you call it and it fails? It’s a hard decision to make, and I think she probably made the right choice.”
Instead, Sheforgen blames those who actively worked against the bill or failed to support it. She believes Republican lawmakers are out to undermine Obamacare, while Democratic lawmakers are afraid to support the law because they don’t understand it.
That much was evident in a Dec. 1 House committee hearing on the Illinois exchange bill. The conservative Illinois Policy Institute’s Kristina Rasmussen portrayed Gabel’s proposal as limiting the number of African-American members on the Illinois exchange governing board, which prompted one African-American Democratic lawmaker from Chicago to aggressively question Gabel. Gabel then explained that the bill required proportional representation of Illinois’ demographics to ensure African-Americans wouldn’t be shut out from the governing board.
Fifty health advocacy groups supported the bill, while the Illinois Policy Institute and the Illinois Manufacturers’ Association opposed it.
Despite Illinois’ failure to create a state exchange, the federal reforms are showing promise. The federal exchange has shown strong participation since the beginning of the open enrollment period on Nov. 15. During the first three weeks of open enrollment, more than 765,000 people used the federal exchange to purchase health insurance, which is significantly higher than the 470,000 people who purchased insurance in the first two months of the 2013 enrollment period through both the federal and state exchanges. Meanwhile, the federal government announced on Dec. 3 that the growth of health care spending nationwide fell to its slowest pace since 1989, the earliest year on record.
The open enrollment period ends Feb. 15, but people wishing to be covered by Jan. 1 must purchase insurance by Dec. 15. The website for the federal exchange is www.healthcare.gov.
Contact Patrick Yeagle at pyeagle@illinoistimes.com.
This article appears in Dec 11-17, 2014.
