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Thursday, May 3, 2012 03:32 pm

No mandate? No problem.

Group pushes for health insurance exchange even if federal reform is struck down

As the U.S. Supreme Court considers the fate of controversial federal health insurance reforms, advocates in Illinois are urging the state to implement the federal law even if it’s struck down.

At the center of the federal Affordable Care Act is an “individual mandate” that requires every person to have health insurance, an idea challenged by several states as unconstitutional. If the nation’s highest court strikes down the individual mandate, the rest of the reforms in the law could also be discarded. But the Campaign for Better Healthcare (CBHC), a coalition of Illinois groups supporting the reforms, says Illinois should implement the federal law regardless of the court’s decision.

Among other things, the federal law urges states to set up public marketplaces, or “exchanges,” where consumers can buy health insurance plans that are sold by private companies and approved by state regulators. Kim Cochrane, employee benefits manager for Springfield insurance agency R.W. Troxell & Company, says insurance plans within the exchange would probably be standardized, and companies would compete to offer the standardized plans at their own price. Cochrane compares it to the existing system used for Medicare supplemental insurance.

Consumers could still purchase health insurance directly from insurance companies outside the public exchange, but the exchange would likely attract small businesses and individuals with preexisting medical conditions who can’t afford insurance otherwise or don’t qualify for other plans.

Cochrane says she can’t predict the Supreme Court’s decision, but some aspects of the law could remain either way.

“I would like to think they’re going to strike the bill down in its entirety,”

Cochrane says. “Because of the way it’s written, it has to be either all or nothing. … However, a lot of it’s already enacted (by insurers), and I would think the insurance carriers would leave a lot of it in play because it’s already set up in their systems.”

Jim Duffett, executive director of CBHC, says Illinois need not wait for a decision on the federal reforms because the public exchange can work even if the rest of the law isn’t in place. He says the exchange would increase competition among insurance providers, improve access to health insurance and reduce health care costs by reducing the number of people without insurance.

“People who do not have health insurance are already in the marketplace,” Duffett says. “When they get sick, they show up in the emergency room or a clinic. Who pays for that? Everyone else. It comes down to the question of do we allow freeloaders? It’s a harsh word, but that’s frankly what the right wing is embracing – not taking personal responsibility.”

Duffett says the insurance exchange will likely have about 1 million participants if the Supreme Court upholds the individual mandate, compared with about 500,000 to 700,00 people if the federal law is struck down. Still, he says it benefits insurers to participate because the exchange provides new customers.

State Rep. JoAnn Osmond, R-Antioch, proposed legislation to prevent Illinois from implementing any more of the federal reforms until the Supreme Court makes its ruling. Osmond has a separate bill that would create a public insurance exchange, but only if the Supreme Court preserves the federal reforms in its eventual decision. Neither of Osmond’s bills have advanced past committee hearings – the first step in legislative approval – which Osmond attributes to reluctance on the part of House Speaker Michael Madigan to address the issue.

Osmond says her bills were meant to prevent the state from wasting time on reforms that might later be tossed out.

“It’s hard to create a good setup when we don’t know the rules,” Osmond said. “Let’s stop and take a good look at what we’re doing. Why are we spinning our wheels?”

Still, Duffett sees health insurance reform as a political “wedge issue” utilized by Republicans.

“Republicans are not going to give up an issue they can hang their opponent on in the upcoming election,” Duffett says.

Both Duffett and Osmond agree that Illinois lawmakers will likely avoid the issue until after the Supreme Court’s decision, and possibly even until the Nov. 6 general election.  Instead of waiting for legislative action, CBHC wants Gov. Pat Quinn to create the exchange through an executive order, as has been done in New York and Rhode Island.

“We feel very confident there’s not going to be any bipartisanship here,” Duffett says. “The politics here and the upcoming Supreme Court decision are making the issue moot for this legislative session.”

Contact Patrick Yeagle at pyeagle@illinoistimes.com.
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