Adam Doster

Finding A Way To Pay

Adam Doster — Fri, 20 Nov 2009 14:16:57 -0800

The backlog of payments to Medicaid providers is a serious problem in Illinois. When these notoriously low reimbursements to primary care physicians administering care to Medicaid patients don't arrive on time, it makes the doctors increasingly reluctant to treat that population. That diminishes health care access for some of the state's most vulnerable citizens, thus raising the potential for public health outbreaks and preventive disease and deaths. It's an unsound system, both economically and morally.

Since the recession hit, Illinois has been making payments to most providers by the skin of its teeth, thanks almost exclusively to President Obama's stimulus bill, which provided $2.9 billion in short-term federal aid. Congress could pass along a little more help if the Democrats' health care reform bill passes; the version that the House approved provides $23.5 billion for state legislatures to pay a higher share of all Medicaid costs -- 66 percent on average, up from 57 percent prior to the stimulus -- for an additional six months in 2010.

This morning, the state also took some independent action aimed at solving this problem, as Gov. Pat Quinn signed into law HB 542, sponsored by Rep. Dan Reitz (D-Sparta) and Sen. Jeffrey Schoenberg (D-Evanston). The bill frees up $120 million from the state's Hospital Assessment Program to make payments to hospitals treating a high level of Medicaid patients, as well as pharmacists and smaller medical providers previously shafted by the stop-gap state budget. Making good on those payments could trigger additional matching funds from Washington, totaling an estimated $1.1 billion over the next two years. Here's Schoenberg's statement:

“Hospitals and other health care providers are key economic engines in communities all over the state, with hospitals employing nearly a quarter of a million Illinoisans and supporting many other businesses, including suppliers and vendors,” said Sen. Schoenberg. “At a time when unemployment continues to climb, this legislation will also create an immediate economic stimulus to preserve jobs and provide the residents of our state continued access to quality health care.”

Accessing all of the available resources is smart policy. And hopefully, Congress will ante up more state aid shortly to counteract the boom/bust budgetary pressures here in Illinois.

But let's be clear: These are short-term fixes to a problem that's dogged Illinois since well before the economy collapsed. Contrary to the talking points you'll hear from the Illinois Republican Party, the state is making solid progress at controlling rising Medicaid costs. We just need sustainable revenue to ensure we can pay the bills going forward.

Image used under a Creative Commons license by Flickr user Big Grey Mare.

Dept. Of Bad Headlines: Daily Herald Edition

Adam Doster — Fri, 20 Nov 2009 09:07:46 -0800

Take a look at this headline from today's Daily Herald:

Reading that, you might guess that the west suburban town of about 150,000 passed a referendum opposing an income tax increase in Illinois. Or perhaps someone polled Naperville residents' on the various tax hike proposals being discussed at the state level. Well, not exactly:

Naperville's business community on Thursday had a chance to voice its concerns about jobs, taxes and the economy directly to Gov. Pat Quinn. [...]

Some [Naperville Chamber of Commerce] members said Thursday an income tax increase would be detrimental to the business community.

John Schmitt, president and CEO of the chamber, said he was not prepared to comment specifically on Quinn's income tax proposal but that the chamber doesn't typically support tax increases. But he was glad the business community had a chance to share its concerns and called the visit productive.

Last we checked, the Naperville Chamber doesn't represent the entire town ...

IL-SEN: New Videos Abound!

Adam Doster — Thu, 19 Nov 2009 15:31:03 -0800

All four Democratic candidates for U.S. Senate Democratic have produced new videos in the last few days. Let's take a look, shall we?

The first comes from David Hoffman, who cut a highlight reel from a forum held by the Northern Illinois Coordinated Campaign Committee in Rockford on Sunday. In the clip, Hoffman discusses the economy, banking reform, the federal deficit, and Afghanistan:

The Hoffman campaign also released a new polling memo this week that The Hill, the Washington Post, and Politico all picked up. While pollster Geoff Garin took pains to argue that Alexi Giannoulias too "flawed" a candidate to beat GOP Rep. Mark Kirk in the general election, the underlying data is similar to other polls we've seen so far (Kirk leads Giannoulias 40-37 percent, but out-distances Hoffman -- whose name identification is at only 26 percent -- by 10 points.) Here's what Giannoulias campaign manager Tom Bowen had to say to the Post's Chris Cilliza:

"Every public poll shows Alexi Giannoulias leading or neck-in-neck with Mark Kirk while David Hoffman is trailing badly. ... He is behind, desperate and now he is running a negative and dishonest campaign, preferring to attack fellow Democrats instead of telling us what he would do in the Senate."

Speaking of the Giannoulias, he earned an endorsement from Illinois' own U.S. Rep. Jan Schakowsky on Sunday. In this video clip from the press conference, the congresswoman said Giannoulias would be a strong voice for health care reform in the Senate. Watch it:

Health care was also on the mind of Cheryle Jackson, who filmed a short video from Washington D.C. in which she said she was "stupefied by Stupak," the anti-choice amendment slipped into the House reform bill:

Lastly, Jacob Meister has released a video documenting his 32-hour campaign trip through Central Illinois and the Quad Cities:

Full Disclosure: The SEIU Illinois State Council, which sponsors this website, has endorsed Alexi Giannoulias in the Democratic primary for U.S. Senate.

Illinois Unemployment Rate Climbs To 11 Percent

Adam Doster — Thu, 19 Nov 2009 10:40:20 -0800

The state's unemployment troubles just keeps growing. Today, the Illinois Department of Employment Security released the October jobless rate. In just one month, it jumped from 10.5 to 11 percent, the highest level in 26 years. CBS 2 has more:

The state reported job losses in numerous industries. The trade and transportation sectors lost 1,400 jobs, and the manufacturing sector lost 800. But some sectors reported significant gains in jobs – 3,600 for educational and health services, 1,300 for professional and business services, and 1,000 for construction, according to the Department of Employment Security.

Here's our updated graph showing the comparison between the state and national unemployment figures, dating back to January 2008. It's not pretty:

For those trying to stay afloat, there is some good news to report from Washington. Roll Call (subscription required) notes that Senate Majority Whip Dick Durbin and Sen. Byron Dorgan (D-ND) have been "quietly trying to write a jobs bill that the Senate can act on early next year." Durbin was a staunch advocate in the Senate fight to extend unemployment insurance through 2009, so his involvement probably increases the chances that jobless benefits will be factored into the new bill.

Quigley Leads Charge On Domestic Partner Benefits Fight

Adam Doster — Thu, 19 Nov 2009 09:08:39 -0800

The federal government is one step closer to providing health care and retirement benefits to domestic partners of its gay and lesbian employees. Yesterday, the House Oversight and Government Reform Committee approved H.R. 2517 by a 23-12 vote. Illinois Democrats Mike Quigley, Danny Davis, and Bill Foster all supported the legislation. GOP Rep. Aaron Schock voted against it. From Alyssa Rosenberg's report on the contentious hearing:

Republican committee members argued that the 2009 Domestic Partnership Benefits and Obligations Act was an inappropriate extension of benefits to a small subset of federal employees at a time when unemployment was rising. They also said such a move would threaten the definition of marriage as a union between a man and a woman, and could open the door to fraud by people of the same sex who simply wanted access to benefits.

Democrats countered that extending access to health and survivor benefits to the same-sex partners of federal workers in exchange for an agreement that those employees would abide by rules governing nepotism and financial disclosure for their partners, was a matter of equality and of establishing the federal government as an inclusive, competitive employer.

In a fascinating volley between the two parties, Rep. Jason Chaffetz (R-UT) offered an amendment calling for the Government Accountability Office to study, two years after the bill's implementation, how the extension of domestic partnership benefits impacts health care premiums for other employees. Quigley quickly countered, filing an amendment requesting a similar report on whether the bill increased federal recruiting and retention -- an often-overlooked factor in such cost-benefit analyses. Both measures passed.

Here's Quigley's statement on the vote:

“The fact that the federal government, which should be setting an example for the rest of the nation’s employers, is currently discriminating against individuals based on their sexual orientation is frankly, embarrassing,” said Quigley. “Not only are we denying people thousands of dollars in benefits and violating our equal pay for equal work laws, but we’re making the government less competitive for top talent than private sector employers, 10,000 of which offer benefits to people no matter who they choose to love.”

According to The Advocate, the full House could vote on the measure before the end of the year.

Quinn-Hynes Health Care Debate Turns Towards Tax Reform

Adam Doster — Thu, 19 Nov 2009 07:33:23 -0800

Yesterday afternoon, as part of the Campaign for a Better Health Care's annual conference, Gov. Pat Quinn and Democratic primary challenger Dan Hynes engaged in an hour-long debate on health care reform. Because it costs the state money to provide coverage to the poor and to protect public health, the debate routinely veered into discussion about the state deficit and the gubernatorial candidates' competing tax reform proposals. When it did, things got snippy. Watch this compilation:

Notice how neither candidate even broaches the most important aspect of this debate: how they plan to convince the legislature to go along with their respective proposals next year. In a sense, this debate is taking place solely in the abstract.

Also of note in the video above: Towards the end, you'll hear Quinn name-drop an October study from the Institute on Taxation and Economic Policy (ITEP) which determined that the amount of revenue the Hynes campaign projects their tax package will generate ($5.5 billion annually) is dramatically overstated. We highlighted this finding when the study was released, noting that the discrepancy stems from the amount of taxable income reported by the highest earners in the state, who would be subject to the highest income tax rate if Hynes' progressive income tax amendment was adopted. The Hynes campaign's numbers appear to assume that all of that wealth will be taxed, ignoring the ways in which rich Illinoisans shelter their income. That said, the campaign has not disclosed their methodologyand we've had trouble getting the underlying data from the Illinois Department of Revenue, so it's still unclear how Hynes (or ITEP, for that matter) reached their conclusion. But it's a big, nagging question that the local media has categorically ignored.

Of course, tax reform was only one component of the debate. Unlike their GOP counterparts, three of whom turned down CBHC's invitation to appear yesterday, Quinn and Hynes both called health care reform a fundamental human right and promised not to opt out of any ofthe provisions in the federal health care bill should it be approved. Instead, they both agreed in principle to implement the federal regulations and coverage mechanisms thoroughly and then extend state-based coverage (depending on cost) to anyone still unable to receive affordable care.

Because he knows the consequences of bad budgeting, the comptroller emphasized "his obsession withfinancial responsibility." As governor, he said he would push to makethe higher reimbursement rate for Medicaid, which was established under the stimulus, permanent and continue to push for stem cell research at the state level (as he did in Illinois when President Bush eliminated federal funding). Quinn repeatedly reminded the audience of his 2001 walk across the state with Dr. Quentin Young, an ardent public health advocate. Quinn also suggested that voters look at his record fighting for the All Kids and Veterans Care programs as well as his veto this summer of a budget that would have eviscerated social service programs throughout the state.

Full Disclosure: The SEIU Illinois State Council, which sponsors this website, has endorsed Pat Quinn in the Democratic primary for governor.

NELP: Without Extension, One Million Will Lose Unemployment Benefits In January

Adam Doster — Wed, 18 Nov 2009 15:13:49 -0800

Just in the past week, two key Democratic leaders in Washington expressed interesting in crafting a federal jobs package that would likely extend federal unemployment insurance for workers who exhaust their benefits after December 31. But they better move quickly, as more than one million unemployed Americans are scheduled to lose their insurance sometime in January.

That figure comes via a new analysis by the National Employment Law Project (NELP), which has been crunching the unemployment numbers for months now. When the stimulus plan was approved last winter, those looking for work in Illinois were eligible to receive up to 53 weeks of federally-funded insurance, through the Emergency Unemployment Compensation program and the Extended Benefits (EB) program, on top of the 26 weeks of state-backed benefits that are always available. The legislation President Obama signed earlier this month -- deadline glitch and all -- supplied an additional 14 weeks. But the funding for all of these federal programs expires at the end of 2009.

NELP estimates that almost 600,000 workers nationwide will lose eligibility for the next tier of benefits sometime in January. An additional 450,000 workers will exhaust their 26 weeks of states benefits. Even more frightening, the number without federal jobless benefits will balloon to nearly three million workers by March. Unless the 2009 extensions are reauthorized in some form, none of those families will be receiving any additional benefits. "Congress has less than four weeks left on its schedule to legislate this year," NELP executive director Christine Owens said in a statement, "and unless it acts to renew the unemployment provisions during this period, the clock will run out for a million workers."

Check out NELP's graph below:

Task Force Urges New Revenue To Relieve State Pension Debt

Adam Doster — Wed, 18 Nov 2009 10:44:33 -0800

Earlier this week, the State Journal-Register asked the candidates contending for their respective Illinois gubernatorial party nominations a series of questions about state pension system. According to the paper, most called it their "high" or "highest" priority. If the pols want to get a better sense of what type of shape the system is in, they should flip through the report released today by the Pension Modernization Task Force, a 19-member group assembled by Gov. Quinn earlier this year.

Some members of the media have already maligned the 19-member coalition. Most notably, the Tribune called the report a "less than candid document" even before it was released. But as the debate moves forward about how to crawl out from under the staggering accumulated debt, it will be essential reading. Here's what the panel concluded:

Unfunded liability growth:

Between the FY 1996 and FY 2008, Illinois' total unfunded pension liability ballooned by $35.7 billion. The primary cause was insufficient contributions from the state, which added $18.8 billion to the shortfall. From the paper:

The deadly combination of nearly 30 years of systematic State underfunding of its employer contributions to the pension systems, followed by the cataclysmic decline in asset values caused by the national meltdown in financial markets over the last year, combined to create an all-time high in the State's unfunded pension liability. (Page 44)

Other factors -- including "more retirements than expected, rates of mortality that did not meet actuarial projections, and terminations that did not meet actuarial projections" -- added $8.5 billion to the tally. The size of the pension benefits played only a marginal role, according to the report. "In sum," the task force writes, "the main culprit is the State’s inability to fund its pension systems according to actuarial [sic] principals."

Benefit size:

Now to those benefit packages. On this issue, the committee first explored whether the Illinois' current level of benefits is in line with other states in the region. According to their research, total retirement costs as a percentage of payroll were higher in Indiana (12.85 percent), Iowa (14.24 percent), Kentucky (7.25 percent), Michigan (11.8 percent), Missouri (8.71 percent), and Wisconsin (10.6 percent) than here in the Land of Lincoln (6.63 percent).

The panel also compared the cost of public defined-benefit pensions (in which the pensioners is guaranteed a certain amount each year) as compared to the contributions made by private employers to private 401k retirement plans (in which the benefit level depends on the performance of the plan). When the average employer contribution to Social Security (6.2 percent) is factored in -- a cost the state does not incur for many of its employees -- the task force found that "the private sector retirement costs are more expensive."

Investment returns

An analysis by Aon Senior Vice President William B. Fornia suggested that the projection the state makes on the future investment returns of its pension funds is "not unreasonable," although lowering the assumption from 8.5 percent to 8 or 8.25 percent "might be considered more reasonable."

Reform savings

Here's the real meat of the study. The task force asked the Commission on Government Forecasting and Accountability to study the two-tiered pension proposal that Gov. Quinn announced during his FY 2010 budget address and assess how much the state could shave off our pension debt between 2010 and 2045 by implementing the proposed reforms.

Increasing the retirement age to 67 would have the greatest impact, saving $88.3 billion over this 35-year period. Next they considered capping pensionable income at $150,000, which would save $33.1 billion. As opposed to awarding an annual 3 percent cost-of-living adjustment (COLA), Illinois could save $12.3 billion if it instead pegged the COLA to 50 percent of each year's annual consumer price index (with a maximum of 3 percent). Reducing the retirement benefit formula would only save $9.98 billion.

It should be noted that most of these savings would not be realized for another 25 or 30 years, when the first batch of new public employees retire.

Funding

As with most of the state's other fiscal problems, the task force recognized that generating new revenue is crucial to getting the pension system back on track:

Given that the State's poorly designed revenue system created the structural deficit that in turn incentivized elected officials to shortchange the State's employer contributions to its pension systems, pension funding reform is not possible without enhancing State revenue. (In theory, the State budget also could be balanced by an enormous reduction in expenditures, but there is little likelihood that the General Assembly could make such cuts without reducing social services and programs to politically unacceptable levels). If State revenue is to be enhanced, it should be done in a manner that: (i) reforms major aspects of Illinois’s flawed revenue system; and (ii) modernizes the fiscal system to both comport with the State's economy and support long-term economic growth. As a final note, the unfunded liability has grown to such a significant size that a new, rational payment schedule, one that front-loads costs, should also be considered. (Page 44)

The report also appeared to offer lukewarm support for the continued use of Pension Obligation Bonds, "but only when market conditions are favorable and only as a debt swap to refinance a portion of the existing unfunded liability."

It's worth mentioning that the report in its entirety was not approved by a majority of the members. To that end, there are lots of letters and minority reports offering counterpoints, including a long response from the Civic Committee of the Commercial Club of Chicago and its supporters. We'll update the post with any interesting insights from those materials.

(H/T Illinois Federation of Teachers)

Manzullo Apologizes ... Or Does He?

Adam Doster — Wed, 18 Nov 2009 07:46:00 -0800

In an interview with Rockford's WREX earlier this week about the possible transfer of Guantanamo Bay detainees to the Thomson Correctional Center, Rep. Don Manzullo unleashed what seemed like an unhinged attack on the religion of Islam. "These are really, really mean people," he told the television reporter, "whose job it is to kill people, driven by some savage religion."

After his office apparently received numerous complaints about the remark, Manzullo released a statement of apology last night, emphasizing that he really meant terrorists practice a "violent, anti-modernity version of Wahhabism." The Tribune printed more from the Rockford Republican:

He said Islam is a "religion of peace" and that the vast majority of its adherents are "men and women of good will."

He added: "Nevertheless, I apologize for any misunderstanding of my comments and I will endeavor in the future to clarify my remarks to make it absolutely clear that America is not opposed to Islam, but that we are fighting terrorists who believe in a savage, perverted, and violent form of Islam."

But check out the AP's more detailed account. Here, Manzullo sounds a lot more defensive, blaming those offended for making a "false assumption."

In a statement Tuesday, Manzullo confirmed those were his words during the Sunday interview, but he said they have been misinterpreted.

Most prisoners at the U.S. naval base in Cuba come from Muslim countries or have Muslim surnames.

Manzullo said he never specified Islam and apologized for any misunderstanding stemming from his comments.

"The religion of these terrorists is indeed savage _ it is not the religion of Islam," he said. "I never once said that Islam is a savage religion. It is a false conclusion or assumption. These terrorists have perverted the peaceful nature of Islam for their own demented purposes."

Manzullo shouldn't blame the reader for misinterpreting his comment. Instead, he should blame himself for using such a bombastic generalization about an extremely sensitive issue. Ahmed Rehab, a spokesman for the Chicago office of the Council on American-Islamic Relations, gave the AP this rejoinder:

"It is outrageous and very sad that a representative of the people would partake in an attack against a global faith," said Ahmed Rehab, a spokesman for the Chicago office of the Council on American-Islamic Relations. "He could have said, 'a savage ideology' or 'a savage interpretation' or any type of nuance that a politician like himself knows how to do."

Image courtesty of Flickr user donmanzullo.

Hoyer: Unemployment Benefits Extension To Be Considered As Part Of Jobs Bills

Adam Doster — Tue, 17 Nov 2009 15:09:35 -0800

Senate Majority Leader Harry Reid (D-NV) has already expressed some interest in extending unemployment insurance through 2010. Now it appears that Rep. Steny Hoyer (D-MD) is thinking along the same lines.

In a news conference today, the House majority leader said now that his chamber has passed its own version of heath care reform, they will move onto a "jobs-creation" package. And another unemployment benefits extension is certainly in the mix, according to CongressDaily (subscription required):

Still, Hoyer said the measure would focus on public jobs, job-creation tax credits, infrastructure projects and assistance to state governments.

"There are a lot of options available," said Hoyer. "We're discussing with economic advisers as to what is the most effective, and frankly there are differences of opinion on that." He said the legislation ought to address another extension of unemployment insurance and adjustments to the health-insurance program that provides coverage to those who recently lost their jobs.

Aside from the benefit extension, it's good to see that state aid and funding for infrastructure projects are high on the priority list of House leaders. These are two areas that got shorted in the Obama administration's first stimulus package that Illinois desperately needs help with. In a joint statement today, a bevy of progressive organizations -- the Economic Policy Institute, the AFL-CIO, Center for Community Change, Leadership Conference on Civil Rights, NAACP, and National Council of La Raza -- called on Congress to pass a bill along these lines. "If we act swiftly and decisively," they write, "we can create millions of jobs and provide urgently needed relief to American families."

When can we expect movement on this front? Hopefully, before Christmas. The Washington Post has more:

Tuesday that House leaders have asked key committee chairmen to offer up proposals that would be compiled into a single larger piece of legislation, with a goal of bringing something to a House vote before Dec. 18, when the House hopes to adjourn for the year.

Because the Senate would have to pass its own bill, this deadline wouldn't solve the end-of-the-year filing snafu that prevents anyone from collecting the full extension of unemployment insurance recently approved by Congress. But it would provide a lifeline to the millions of Americans scheduled to exhaust their benefits in 2010.