One Step Forward, Huge Step Backward

Charity Care has advanced—and retreated—in the Illinois General Assembly.

SB 3261, House Amendment 2—the process bill—which sets standards for patient discounts for low-income uninsured patients at Illinois hospitals, passed the House unanimously on Friday, May 25, 2012 and the Senate concurred with House amendment by a vote of 43 to 23 on May 29th.

The bill directs the Attorney General to set by rule standard provisions for a universal application and presumptive eligibility (a process for determining eligibility for financial assistance based on an applicant’s receipt of other needs-based, public-benefits programs, such as Food Stamp benefits) to be used by all Illinois hospitals.

The bill requires urban hospitals to provide charitable discounts of 100% of charges to uninsured patients with family incomes not more that 200% of the federal poverty level ($30,260 a year for a two-person family). It requires rural and Critical Access Hospitals to provide charitable discounts of 100% of charges to uninsured patients with family incomes not more than 125% of the federal poverty level ($18,912 a year for a two-person family).

The bill directs the Attorney General to take the recommendations of the hospitals into account in adopting rules, but, oddly enough, does not call specifically for input from consumers and community groups. However, testimony by the Fair Care Coalition in the House Human Services Committee called for the inclusion of these groups, and the Illinois Hospital Association (IHA) quickly indicated its commitment to continue working with community organizations and patient advocates that work with individuals needing financial assistance for hospital care in this process. Representatives Harris and Cassidy brought this “legislative intent” into the House debate, thereby making the call for community input a part of the public record.

The Fair Care Coalition, of which PCG is an active member, has worked long and hard for this standardized process, and we applaud the passage of SB 3261 HA 2.

However, our campaign to require nonprofit hospitals to provide more charity care in fair exchange for their tax exempt status did not advance. Instead, the Illinois Hospital Association (IHA) was successful in its efforts to expand the definition of charity care to include a wide range of community benefits, i.e., research, training, free health outreach events, thereby making it easier for hospitals to obtain and maintain their tax exempt status. This legislation—SB 2194, House Amendment 3—flies in the face of the 2010 Provena decision by the Illinois Supreme Court which clearly defines charity care as free and reduced-cost hospital care for uninsured and under-insured individuals. According to the Court, community benefits do not count as charity care.

The bill also included provisions for raising the tax on cigarettes and other tobacco products by $1.00 a pack and changing the hospital assessment tax system. During the House debate, some legislators urged the passage of SB 2194 to avoid further cuts to Medicaid while others called for a yes vote to protect the hospitals. The Senate debate had senators supporting the bill, again, to avoid more budget cuts, but others declared opposition to any new tax, calling instead for further cuts.

The General Assembly, the Governor, and the IHA had the opportunity to create a better system of charity care in Illinois, one that improved access to health care, equity for all hospitals, and accountability to taxpayers. Instead, they decided to extend additional benefits to wealthy hospitals and failed to take any action that would ease some of the struggles of the safety nets.

While the Fair Care Coalition decries the passage of the charity care provision of SB 2194, we do see a glimmer of hope. Implementation of the universal application and presumptive eligibility (SB 3261 HA 2) will require all hospitals to give medical services to any eligible low-income individual or family who needs care regardless of the amount of community benefits the hospital has already provided.

Upon hearing about the passage of the two bills, one of our Fair Care leaders said, “I’m coming to learn that it’s all about the little steps to make real change.” So, we’ve made a small step. Our work to create a more just health care system in Illinois will continue.

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