Illinois to offer health coverage to all children

Illinois has passed a groundbreaking plan to offer health insurance coverage to all uninsured children, but support from the medical community is tempered by uncertainty over how the state will carry out and finance the program.

"All Kids," which Gov. Rod Blagojevich signed into law Nov. 15, will cover a broad array of benefits, including doctor and emergency department visits, hospital stays, prescription drugs, vision care, dental care and medical devices such as eyeglasses and asthma inhalers.

The program will begin providing benefits July 1, 2006. Currently, more than 250,000 Illinois children lack health insurance.

The initiative could be seen as a model for other states, particularly in the absence of any movement in Washington to further expand children's health care coverage, said Alan Weil, executive director of the National Academy of State Health Policy.

All Kids has garnered endorsement from the Illinois State Medical Society, the Illinois Academy of Family Physicians and the Illinois Chapter of the American Academy of Pediatrics.

"Anything that improves access to health care is a good development as far as family physicians are concerned, so we're hopeful for the program," said IAFP President Fredric Leary, MD. On the other hand, "we're skeptical about the details," he said.

IAFP and other physicians groups have been meeting with the Illinois Dept. of Healthcare and Family Services to discuss the details of the program's implementation.

Among the issues on the table is the state's plan to move almost all of its Medicaid and State Children's Health Insurance Program beneficiaries into a primary care case management model next year as a means of financing the All Kids program. All Kids enrollees also will be put into the PCCM model.

Under PCCM, the state pays primary care physicians a monthly fee to manage patients' care.

Physicians will be paid the same reimbursement rates for All Kids as they are for Medicaid.

Shifting the state's health insurance programs to PCCM is expected to save Illinois about $56 million during the first year of implementation. Most of the savings will be used to cover the cost of All Kids, which is estimated to be $45 million in its first year, according to the governor's office.

Illinois physician groups are not opposed to the move to PCCM, but they have questions about how the shift will be carried out.

"We have reason to be skeptical, due to past issues with Medicaid and what they've been able to provide not only for the patients but for the providers," Dr. Leary said.

Low reimbursement rates and lengthy waits for payment have been among physicians' major concerns about Medicaid.

A settlement approved by a federal judge on Nov. 19 requires that Illinois increase Medicaid payment rates for preventive care and certain other services provided to children. A federal court had earlier determined that Illinois' rates were too low to attract enough physicians and dentists to the program and thereby violated federal laws that require states to provide children on Medicaid adequate access to health care. The new payment levels -- some of which are double the current rates -- will take effect Jan. 1, 2006.

Illinois is seeking to add further incentive for physicians to participate in All Kids by addressing their concerns about prompt payment.

"We recognize that when payments are slow to physicians, that it often presents cash-flow issues," said the state's Medicaid director, Ann Marie Murphy, PhD. Physicians who participate in All Kids can expect to receive payment on "clean claims" within 30 days, she said.

Physician groups are taking a wait-and-see attitude on that promise.

"There is obviously skepticism among doctors who have waited months and months to get paid," said Scott Allen, executive director of the AAP's Illinois chapter. But expedited payment, combined with higher reimbursement rates, could attract more physicians, he said.

The state also hopes to allay physicians' concerns about getting swamped with Medicaid patients by allowing them to limit the number of patients they'll take, Dr. Murphy said.

A massive undertaking

The program is "very ambitious," said Rakesh Singh, a spokesman for the Kaiser Commission on Medicaid and the Uninsured in Washington, D.C.

"As far as we can tell, this is the most comprehensive effort to cover kids that we've seen by a state."

Any uninsured child is eligible to enroll, including those in middle-class families who can't afford private insurance but whose incomes are too high to qualify for Medicaid or the State Children's Health Insurance Program, called KidCare.

Families who enroll their children will be charged monthly premiums and co-payments on a sliding scale based on their income. For example, a family with two children that earns between $40,000 and $59,999 a year will pay a $40 monthly premium per child and a $10 co-pay for physician visits. A family with two children that earns between $60,000 and $79,999 will pay a $70 premium per child and a $15 co-pay for doctor visits.

State officials hope to see about 50,000 children enrolled during the first year, growing to about 200,000 within five years.

Other states have considered similar programs. In California, Gov. Arnold Schwarzenegger vetoed a bill in October that would have offered coverage to all of the state's uninsured children. Massachusetts offers coverage to all children, but its benefits are not as comprehensive as those provided by All Kids, according to the Illinois governor's office.