The state of the State                                                

What the Clinton health plan means to Illinois is anybody's guess By JENNIFER HALPERIN

It's difficult enough for owners of small businesses to predict exactly what's in store for them under President Clinton's proposed health care plan. After all, the final plan may look very much or not at all like the one outlined in the president's September address to the nation. Multiply that uncertainty by several thousand and one can begin to imagine the confusion faced by state officials, who already wear several hats in the health care system. Not only are they gigantic employers that provide health benefits for employees and retirees; they are administrators of Medicaid and regulators of health care providers and insurance companies as well. The exact impacts expected on state policies and state finances are just about incomprehensible at this point.

Creation of new health care boards in individual states leads to questions regarding whether the extreme savings alluded to by the Clinton administration in terms of cutbacks in paperwork would come to fruition

But a variety of predictions are making the rounds regarding eventual effects in Illinois. Among those that would have a significant impact are ones that forecast an overhaul of state agencies in Illinois that have a hand in social services. For instance, if state governments are to assume responsibility for health care within their boundaries, would that task fall in Illinois to the Department of Public Aid? The Department of Public Health? Would these agencies be merged, or even abolished and replaced by a new one?

All of these scenarios have been suggested — though people are careful to stress that any departmental changes would hinge upon which agencies' services would be covered by a health plan. For example, if mental health services are included in the final plan approved by Congress, the Department of Mental Health in Illinois would undergo a change in function.

"I think you could probably do it under the Department of Public Aid," said Sen. Judy Baar Topinka (R-22, North Riverside), who chairs the Senate's Public Health and Welfare Committee. "But maybe it would be left to a new board. Depending on which services are included, we could wind up scooping up all of these agencies and putting them together under a health czar."

Topinka's counterpart in the House of Representatives, Rep. David D. Phelps (D-118, Eldorado), agreed. "State agencies as the way we know them may require restructuring," said Phelps, who chairs the House Health Care and Human Services Committee and will help lead a legislative health care task force to be convened by Speaker Michael J. Madigan (D-22, Chicago).

Creation of new health care boards in individual states leads to questions regarding whether the extreme savings alluded to by the Clinton administration in terms of cutbacks in paperwork would come to fruition. As Topinka observed, patients and providers could continue to be swamped with paperwork if we wind

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up with a net increase in bureaucracy between new and existing federal and state boards' regulatory panels.

Health care experts have been expressing caution, saying that less paperwork or not, it is unclear whether individual states have the political commitment or technical expertise to arrange insurance for all residents in the time span laid out by Clinton.

Conventional Wisdom has Congress approving some type of major health reform during 1994 — in time for congressional incumbents hitting the campaign trail to be able to point to their own efforts to improve health care. But as details large and small are debated on the federal level next year, state legislatures will be meeting at the same time.

Without final word from Washington on what 1994's health reform measure actually consists of, Illinois and other states' lawmakers won't have a firm base upon which to plan their response. That will put off legislative action here until spring of 1995 at the earliest, it would seem. That timetable doesn't make it look especially promising that Clinton's target date of 1997 for universal coverage will be met. Plans espoused by some Republicans in Congress have touted the year 2000 for such coverage. In light of the difficulty that can plague federal and state bureaucracies when they work together, the later date seems to be a more realistic goal.

On the financing front, as unpredictable as it seems at this point, some people see red flags ahead for states. It appears that states at a minimum will bear a proportionate share of national health care spending increases as they pay for state employee and retiree health plans, health care for wards of the state and prison inmates and Medicaid, which provides health care for the needy. But Topinka uses the metaphor of the card game "Old Maid" when thinking about what's in store. "Remember that game, where at the end somebody would get stuck holding the Old Maid card?" she asks. "That's what I'm afraid is going to happen to the states — to Illinois. I'm afraid we may wind up paying full freight for Medicaid."

The Congressional Budget Office has projected that all states' outlays for Medicaid, which now are matched by the federal government, would rise from $66 billion in current fiscal year to $174 billion a decade from now. Illinois' fiscal year 1994 budget allocates nearly $2.4 billion in state money for Medicaid.

Some state officials fear the national health care plan might wind up developing into what one person called "the mother of all unfunded mandates" placed on states. Under several pending proposals, this scenario could develop if no limit is placed on the need for medically necessary care, if the federal government limits the responsibilities paid for by federal funds and private employer plans, and if states are left as the payers of last resort. "Before we embrace the plan we have to make sure how much money the state would wind up having to put forth," said Phelps. "Medicaid is a growth industry in Illinois, courtesy of high-tech medical treatment," Topinka said. "More infants with severe health problems are able to be saved, but they're going to grow up needing intensive medical services their whole lives. More senior citizens with high health needs are alive. This could necessitate a massive increase in taxes, but I don't know from where. I mean, no amount of 14-cent taxes on cigarettes are going to bail this one out."

'Remember that game, where at the end somebody would get stuck holding the Old Maid card? ... that's what I'm afraid is going to happen to the states ...we may wind up paying full freight for Medicaid'

Unlimited increases in health care costs would make it impossible to cut back on the nation's deficit, and would continue to hurt the U.S. economy. On the state level, these ever-increasing costs eat into money that could otherwise be spent on education and other services.

If costs do overwhelm states, a move toward rationed care may be in our future. "Is Illinois prepared to do that?" Topinka wondered. "In the next 20 years we probably will see discussions of this. *

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