Public Aid budget fulfills governor's commitment to protecting health care for Illinois' families and seniors

SPRINGFIELD, ILL. - Gov. Rod R. Blagojevich today proposed fiscal year 2004 General Revenue Fund appropriations of $5.7 billion for the Department of Public Aid, an increase of $570 million over fiscal year 2003 GRF appropriations of $5.1 billion. The budget funds an expansion of drug benefits to seniors with incomes up to 250 percent of the federal poverty level and expands health care coverage to children and parents.

"This budget will preserve adequate access to quality health care at affordable cost to the state while we tighten our administrative belts and prudently manage operations and resources," said Barry S. Maram, director of the Department of Public Aid.

The governor's proposal takes advantage of prescription drug savings of $120 million generated by the governor's special drug advocate at the Department of Central Management Services and saves $49 million by buying generic rather than brand name drugs when a generic substitute is available.

The budget contains $9.5 billion in total funds for medical services. Through a combination of short-term borrowing and aggressive cash management, the department projects average payment cycles for medical providers of approximately 40 days. This will be achieved with no rate cuts for direct medical providers.

To assure low-income seniors in Illinois never have to choose between food and the prescription drugs they need, the state will make SeniorCare available to single seniors with annual incomes up to $22,450 and to couples with annual income up to $30,300. An estimated 50,000 additional seniors will receive full prescription drug coverage as a result.

The state will make aggressive use of federal funds to finance the expansion of SeniorCare. By increasing federal revenue and drug rebate collections, the state will actually realize a net benefit of more than $18 million as a result of the expansion.

Keeping to the commitment made by Blagojevich in his State of the State address, the recommended budget will make health benefits available to an additional 20,000 children and 65,000 parents and caretaker relatives. The department will expand KidCare to cover children in families with incomes up to 200 percent of poverty, or $36,800 annually for a family of four. FamilyCare coverage will expand to parents and caretaker relatives with incomes up to approximately 90 percent of poverty, or $16,560 annually for a family of four.

The department estimates that child support collections will continue to set new records. Total collections are projected to reach $932.2 million in fiscal year 2004. The budget includes $215 million for child support enforcement activities.

The department will shift control of the State Disbursement Unit (SDU) to ACS State and Local Solutions, a private vendor. "The department is committed to continuing to improve SDU's performance in delivering child support checks to families on time," Maram said.

The department will reduce administrative spending by $5.8 million in fiscal year 2003 and $23.3 million in fiscal year 2004, achieving savings through reductions in headcount as well as reductions in funding for contractual services, travel, equipment and other administrative expenses.

Pursuant to the Governor's Executive Order 1, the department will cut personnel from 2,794 in fiscal year 2003 to 2,521 in fiscal year 2004.

At the governor's direction, the department will explore ways to use managed care principles to increase use of preventive care, to improve the quality of services and to better contain growth of drug, hospital and physician costs.

The recommended fiscal year 2004 budget for the Public Aid inspector general includes funding for continued development of the Long-term Care Asset Discovery Project. The project monitors applications for long-term care and seeks to identify unreported or diverted assets that may affect eligibility for tax-supported care.

The budget also includes funding to implement the requirements of the federal Health Insurance Portability and Accountability Act of 1996 on time. Under HIPAA, the department will convert all electronic transactions to new national standards and will enforce additional privacy and data security protections.

Overall, the proposed budget will enable the department to provide access to quality health care for Illinois' neediest families and to enforce child support payment obligations. At the same time, the budget preserves rates paid to medical providers and supports payment in a more timely fashion.