Illinois Health Plan Encounters Backlash From Business Community

A universal health coverage proposal by Illinois Gov. Rod Blagojevich (D) "has created outrage in the business community, and its unpopularity is threatening to doom the entire health care initiative," the New York Times reports. The plan, called Illinois Covered, would create a new tax on the gross receipts of businesses that make more than $2 million annually. The tax would range from 0.08% of gross receipts for businesses, such as retailers or wholesalers, to 1.95% for service businesses. Retail sales of food and medicine would be exempt from the tax.

The plan would create a statewide pool of low-rate insurance plans that anyone would be allowed to purchase. The plan also would offer rebates for middle-income families to help them pay premiums for the state program or private coverage, and it would expand access to coverage for low-income state residents through a program similar to Medicaid. In addition, the plan would permit parents to keep adult children on their family policies until age 29, among other benefits.

An independent study by Kenneth Thorpe of the Department of Health Policy and Management at the Rollins School of Public Health at Emory University found that from 2008 to 2011, the plan would generate a total of $15.6 billion in savings.

Opposition
However, "several leaders who usually find themselves allied with the governor have expressed outright opposition to the new tax," including Blagojevich's former running mate Lt. Gov. Pat Quinn (D) and civil rights leader the Rev. Jesse Jackson, the Times reports. Quinn said, "I've told the governor it's time for 'Plan B' because a strategic retreat from [the tax] is better than overwhelming defeat," adding, "It's the wrong remedy for a serious issue. I think we can do much better than that."

Jackson in an interview said, "For a substantial number of small businesses and many of our established businesses, the tax would be higher than the profit. That is the real problem with it." He added, "We all want health care. But business closure is not good health." Some businesses have said they would move out of the state if the tax were imposed, and the state Chamber of Commerce has launched a campaign opposing the health care plan and tax.

Other Comments
Diane Rowland, executive vice president of the Kaiser Family Foundation and executive director of the Kaiser Commission on Medicaid and the Uninsured, said, "You could say it's 'courageous' or you could say it's 'not politically feasible,' but many who look at state reforms say the key is, 'is the financing adequate?'" Rowland added, "It's not just how you propose to cover people, but are the dollars there to make the coverage real? This proposal seems to be addressing both sides of the equation, talking about coverage while being honest about financing."

Alan Weil, executive president of the National Academy for State Health Policy, said, "If this happens, I'd put it in the same category as Massachusetts as far as a comprehensive plan designed to reach everyone. That would put it very much in the lead" (Saulny, New York Times, 5/5).