Illinois Legislature Passes Bill to Protect Homeowners

Bill seeks to ensure that Illinois homeowners benefit from federal Making Home Affordable Program

On April 29, 2010, the Chicago Tribune reported that the number foreclosures reaching completion in the Chicago area was higher in the first quarter of 2010 than in any other period during the past five years. This is according to Woodstock Institute data released the same day. 

While the worsening crisis in the Chicago region certainly highlights the shortcomings of federal foreclosure prevention programs like the Home Affordable Modification Program (HAMP), HAMP servicers have also been failing Illinois homeowners. Advocates report that homes are being lost to foreclosure even while homeowners are still trying to modify their loans under HAMP, in violation of the program. Indeed, the National Consumer Law Center and the National Association of Consumer Advocates reports that in a recent survey of over 100 consumer advocates, nearly 95% of the surveyed advocates have represented homeowners in cases where a servicer tried to proceed with a foreclosure sale without a completed review under HAMP. HAMP can hardly be successful if homeowners who apply to the program are losing their homes because the program is violated. Illinois homeowners deserve the opportunity to try and benefit from federal foreclosure prevention programs, even if they are not as effective as was hoped.

Recognizing the need to improve the effectiveness of the HAMP program, the Treasury Department issued new directive 10-02 on March 24, 2010, that, among other things, (a) clarifies that servicers must inform homeowners who meet basic criteria about the HAMP program, (b) prohibits referrals to foreclosure until either the homeowner has been evaluated and determined ineligible for HAMP or reasonable solicitation efforts have failed; and (c) requires that a servicer of a mortgage potentially subject to HAMP certify to the foreclosure attorney or trustee that the homeowner is not HAMP-eligible before a home can go to foreclosure sale. 

Although these new rules give foreclosure attorneys better guidance about when to file cases and proceed to sale, the directives still rely on the compliance of servicers. In order for the HAMP program to truly benefit homeowners, they must be able to stop foreclosure court proceedings when the HAMP program is violated before their homes are lost.

A proposed Illinois law may help. HB 5735, spearheaded by former Representative Deborah Graham, Representative Al Riley, and Senator Jacqueline Collins, makes clear that if a home goes to foreclosure sale in violation of the Making Home Affordable Program (of which HAMP is a major component), the homeowner can have the court set aside the sale, so that the owner can continue to work through the federal program. HB 5735 should be heading to Governor Quinn’s desk shortly. We implore Governor Quinn to sign the important protections of HB 5735 into law.

Healthy Communities, Housing Choice Vouchers, and Segregation: How Do You Solve a Problem That Won't Go Away?

HousingA new report released by the Illinois Assisted Housing Action Research Project (IHARP) shows that Chicago families in the Housing Choice Voucher (HCV) Program continue to live in overwhelmingly poor, African American neighborhoods on the city’s south and west sides. These neighborhoods also experience high rates of crime, mortgage foreclosures, poor health, and high levels of lead.

The HCV program is supposed to give families the chance to rent in “healthy communities,” meaning areas with job opportunities; good schools, services, and transportation options; and low rates of crime. But this study and others like it shows that the majority of HCV families don’t live in those communities.

Being stuck in communities without opportunities is a significant issue not just for HCV families but for all low-income families, especially minority families. A recent Urban Institute report on residential mobility found that “residential churning,” or moving short distances due to financial stresses and housing problems, is prevalent in low-income communities. Nearly half of families originating in the report’s study areas were described as “churning movers” who gained little in neighborhood amenities and opportunities by moving. Strikingly, higher percentages of African-American and Hispanic families who moved were “churning movers” than white families who moved. 

This may be due to the fact that minority households face race-related barriers to residential mobility, and remain in poor neighborhoods due to racial segregation and social and economic inequities. As cited in the Urban Institute report, African Americans are less likely to move to better neighborhoods than other groups, even when they have achieved the same levels of income and education as other groups who moved out.   

We can do more to help HCV families move to healthy neighborhoods. Mobility counseling must be offered and supported provided both before and after families move. The rents offered by the HCV program must also be adjusted to reflect the block-by-block distinction of many communities, particularly in urban environments. If the rents are not set high enough to compete with the actual market rents in a healthy community, then no amount of mobility counseling will make a difference. As well, too many HCV families across the country are denied the chance to live in a healthy community because of open discrimination by property owners. Only by protecting voucher holders against source-of-income discrimination will these types of practices end. Finally, some thought should be given about how to make these moves to healthy communities more permanent--converting some of these vouchers to site or project-based subsidies (so the housing subsidy remains even after the tenant leaves but the tenant receives another voucher) could secure a long-term supply of affordable housing in these communities.

All in all, we need to reconsider how many housing choices not just low-incomes families really have under the current HCV program, but all low-income families in this country have.

This post was co-authored by Elizabeth Frantz.


 

Acting on the Data: The Measuring American Poverty Act

[This is the fourth in a series of six articles summarizing the half century history of the US poverty threshold and the dire need for an updated poverty measure.]

MoneyIn September 2008 and again in 2009, the Measuring American Poverty Act (MAP Act) was introduced in Congress. The bill had a number of provisions intended to build on the NAS approach while seeking to address many of its criticisms. In general, it would have incorporated NAS’s suggestions that the poverty measure be based on current consumption patterns for food, clothing, shelter and other basic necessities, include income assistance from public programs (e.g., Earned Income Tax Credit, Food Stamps, Housing Assistance) and deduct necessary expenses (e.g., federal income taxes, work expenses, and out-of-pocket medical expenses). Finally, it would have also taken into account NAS’s suggestions to include geographical differences in the cost of living. Among the bill’s key provisions were:

  • Thresholds: The Census Bureau would have been required to adopt thresholds along the lines recommended by NAS to better reflect the needs of children.
  • Resources: The bill would have adopted the NAS approach of counting tax credits, non-cash benefits such as food stamps, and housing subsidies as household income, and, at the same time, subtract expenditures for health care, necessary work-related expenses, and child support.
  • Historical Measure: The bill would have treated the current official poverty measure as the “historical” measure, and require that calculation and reporting of poverty rates be done for both the modern and historical measure.
  • Use of New Measure: The bill would have specified that adoption of the modern measure would have had no automatic effects on program funding formulas or eligibility rules that currently use the official poverty measure. Instead, Congress would, over time, have been required to make whatever adjustments it considered appropriate on a program-by-program basis.
  • Decent Living Standards and Medical Care Risk Measure:  The bill would have directed that NAS make recommendations for Decent Living Standards and Medical Care Risk measures. The Decent Living Standard would be defined as “the amount of annual income that would allow an individual to live at a safe and decent, but modest, standard of living,” that is, an amount intended to be above that of the poverty thresholds. The Medical Care Risk measure would calculate the extent to which individuals are at risk of being unable to afford needed medical treatment, services, goods, and care, taking into account both uninsured and underinsured statuses.
  • Calculation of Relative Measure: While the bill would not have mandated reporting of relative poverty measures using percentages of median income, it would have required that public online tools be made available to allow members of the public to calculate poverty using alternative approaches, including calculations based on 50 and 60 percent of median income.

In sum, the proposed bill would have addressed a range of concerns leveled against the NAS approach. First, in addition to establishing a “modern” poverty measure the bill would have laid the groundwork for developing a Decent Living Standard measure. This measure would recognize that a family needs resources far exceeding the current poverty line in order to have a “reasonably” decent life, while acknowledging that it would not be feasible to immediately implement a new poverty line that is twice as high (or higher) than the current one. Finally, over time, a Decent Living Standard recognized in federal law could have become an important vehicle for analyzing and talking about the need to increase the number of families that have the resources not just to get by but to thrive.

The bill also would have ensured that there would be no immediate effects on existing funding or eligibility rules by specifying that there would be no automatic effects on program funding formulas and benefits eligibility.  Instead, it recognized that there may be good reason to adjust funding formulas and eligibility rules overtime.

One drawback to the MAP Act was that implementation of the new measure would have required Congressional action. In contrast, the administration could have, and still can, change the current measure without Congressional action since the directive to use the original poverty measure came from the Office of Management and Budget. Administrative action would be preferable to legislation because the measure could be developed and continually refined without locking in the detailed rules contained in parts of the Act. Still, the introduction of the MAP Act was an important step forward in showing how the administration or Congress could build on NAS’s recommendations and the subsequent learning and experience to develop a significantly better poverty measure.

The next blog in this series discusses the recently announced supplemental poverty measure.

The U.S. Census, Arrest Records, and Employment Discrimination

The U.S. Census rejected 69-year-old Evelyn Hauser from a job because of her past arrest, even though she was never formally convicted and even though she hasn’t had any interactions with the criminal justice system in the nearly three decades since. The federal government didn’t have a problem with her criminal record when it hired her for the 1990 Census, so a class action lawsuit is asking: “What’s the problem now?”

Ms. Hauser is one of the named plaintiffs in Johnson v. Locke, a federal class action lawsuit challenging the Census’ screening practices for applicants with arrest records. The purpose of this lawsuit is to effect “simple changes to the Census’ hiring process that not only reduce its discriminatory effects, but will promote the public interest by expanding [its] hiring base in historically under-counted communities, thereby helping to achieve [the federal government’s] mandated goal of counting all who live in the United States.”  

The screening process goes like this: for every person who applies for one of these over one million temporary but well-paying positions, the Census runs an FBI criminal background check. If an arrest turns up, the applicant is ineligible for employment unless she can, within thirty days, produce a court document describing the disposition, i.e., outcome of the case.   

There are several problems with this screening system. First, the FBI database is notoriously incomplete. Half of all arrest records in the database are missing dispositions, which means that a significant number of applicants with arrests will have to track down these court documents. The 30-day requirement is especially burdensome for Ms. Hauser and other people whose cases predate the computerization of court files. 

Second, without having a complete picture of an applicant’s criminal history, the Census risks basing its hiring decisions on arrests and thus violating Title VII of the Civil Rights Act of 1964. Title VII prohibits employment policies that unjustifiably and disparately impact racial minorities. Indeed, the Equal Employment Opportunity Commission – the federal agency charged with enforcing Title VII – advises employers that bans on people with arrest records discriminate against racial minorities. Not only do racial minorities experience higher arrest rates, but arrests also have limited value in screening applicants since they are not reliable indicators of criminal activity.

As a result of this screening process, the complaint notes, “All applicants, whether or not they will work with the public, who have an arrest record at any point in their lives – no matter how trivial or disconnected from the requirements of the job – face an arbitrary barrier to employment.”  All Ms. Hauser wants, though, is to “continue contributing to her community.”

For more information on this case, visit the Census Worker Class Action Website.

For Good Measure: NAS's 1995 Report on Updating the Poverty Measure

[This is the third in a series of six articles summarizing the half century history of the US poverty threshold and the dire need for an updated poverty measure.]

MoneyFor the last fifty years, there has been no improvement to the Federal Poverty Measure. The National Academy of Sciences (NAS) 1995 approach for updating the poverty measure was probably the closest the U.S. has come to such reform in recent history. Among the report’s recommendations were that:

  • The poverty threshold should be comprised of a budget for three basic categories (e.g., food, clothing, shelter including utilities) and a small additional amount to allow for other needs (e.g., household supplies).
  • Actual data on household spending should be used to develop a threshold for a reference family.
  • Each year, the threshold should be updated to reflect changes in spending on food, clothing, and shelter over the previous three years and then adjusted for different family types and geographic areas of the country.
  • The resources of a family to be compared with the thresholds to determine poverty status should be defined to include money and near-money disposable income (e.g., resources should include most in-kind benefits and should exclude taxes and certain other nondiscretionary expenses (e.g., work expenses).
  • A regular updating procedure to maintain the time series of poverty statistics should be used.

The primary advantage of NAS’s proposal was that it would have directly addressed many criticisms of the current poverty measure by:

  • applying thresholds that actually reflect the costs families incur to meet a set of basic needs;
  • ensuring a logical relationship between the thresholds and resource-counting rules;
  • using resource rules that both better reflect family resources and expenses such as health care, work-related costs, and child support paid, and that do a far better job of showing the effects of key policies; and
  • providing for geographic variation in the thresholds to reflect variations in actual costs.

These changes are important, in that they would have created a measure that better reflects the effects of government and anti-poverty policies. For example, the American Reinvestment and Recovery Act, or ARRA, contained a number of provisions intended to help poor and vulnerable groups. The current poverty measure does not reflect these efforts since ARRA’s expansion of tax credits, such as the Earned Income Tax Credit, Making Work Pay, and Child Tax Credits, as well as SNAP benefits and child care assistance, are not considered in the measure.Thus, there is no way to measure their effectiveness. Similarly, removing these credits and benefits would financially hurt many, but will not affect the poverty level at all. Adopting an NAS-type approach would have fixed this problem.

However, NAS’s approach also had a number of drawbacks. Among them:

  • Measuring economic deprivation by assessing whether households can afford to meet a set of basic needs is not productive when international comparisons and many other developed countries use a “relative” measure of poverty based on the share of families below 50 or 60 percent of median income (on the premise that, in a developed society, measuring the number of families far from the median provides a better measure of whether families are outside of the social mainstream).
  • Using self-sufficiency standards, basic living budgets, and family budgets aims too low because often such measures conclude that the amount of income a family needs for a reasonably decent life or similar formulation may be twice the current poverty line or higher.
  • Using thresholds that reflect only food, clothing, shelter, and “a little more” do not adequately reflect the developmental needs of children.
  • Excluding health care and work-related costs in the thresholds can make the measure misunderstood by suggesting that these costs are not important. And, by only subtracting actual expenses, the measure provides no recognition that some families have low or no expenses because they are going without needed health or child care.

Despite these drawbacks, NAS’s approach became the one most widely debated. There was great consensus as to many of its principles, but, as always, disagreement among others. Eventually, NAS’s suggestions were used, at least in part, as the basis for several legislative proposals for updating the poverty measure that were eventually introduced.

These legislative proposals are discussed in the next blog in this series.

15,000 Rally to Demand a Responsible State Budget

“Act like leaders, not like fools,

Save our services, save our schools!”

So chanted 15,000 people gathered in front of the State Capitol on Wednesday, in the largest Springfield rally ever. The  demonstrators demanded that the General Assembly not return to their home districts on May 7 as scheduled, or at any other time, until they have enacted a responsible budget that raises the revenue needed to avoid the human catastrophe facing  Illinois in the form of draconian state budget cuts.

Reasonable minds do not disagree: a substantial increase in the state’s revenues is an indispensable piece of the fiscal puzzle if our state is to avoid financial collapse. Earlier this year, the Civic Federation, the voice of Chicago’s business community for over 100 years, released its report on the state’s fiscal crisis and called for an $8 billion tax increase, saying:

We do not enjoy advocating a significant tax increase in the middle of a difficult recession. However, continuing to do nothing would be by far a worse option.   

In jeopardy unless there is a revenue increase are programs that provide vital services to people in need – seniors, the disabled, low-income single parents, people with drug addictions or suffering from mental illness, children at risk of academic failure, adults with developmental disabilities. These same programs provide jobs for teachers, home health care workers, substance abuse and mental health counselors, child care workers, persons who work with adults with developmental disabilities, and others. 

Those who say that raising taxes will cost Illinois jobs are wrong.  The truth is that our continuing failure to raise the revenue needed to pay our bills will result in a devastating loss of the jobs described above as well as those of police, firefighters, and others. 

And let’s consider the private sector. The belief that businesses make decisions on where to locate based solely on tax rates is demonstrably wrong. Does anyone really believe that a crumbling infrastructure and an educational system in shambles create a favorable business climate?

Those who say we over-spend and over-tax have their facts wrong. The facts are that Illinois’ three percent state income tax rate is the lowest of all 41 states that have a state income tax, and Illinois is 43rd in the country in general funds spending as a percent of the state’s gross domestic product.

Nobody likes to pay higher taxes. Nothing is politically easier than to say, “I didn’t raise your taxes.” But we cannot afford to remain on the path of expediency.

Franklin Delano Roosevelt said: “Taxes are the dues that we pay for the privileges of membership in an organized society.”

Oliver Wendell Holmes put it even more succinctly: “Taxes buy civilization.”

We’re not going to climb out of our $13 billion hole in one year, but we can’t wait to start.

“Show some guts,

Stop the cuts!”

Legal Needs of Low-Income Lesbian, Gay, Bisexual, and Transgender Clients

Gay Pride FlagData suggest that poverty rates in the lesbian, gay, bisexual, and transgendered (LGBT) community may be higher than in the general population. A recent study published by the Williams Institute found that 24% of lesbians and bisexual women were poor compared with only 19% of heterosexual women. Moreover, poverty rates for children of same-sex couples were twice as high as those for children of married couples. Another study found that 23% of the transgender community in California lived below the poverty level.

There are many reasons that LGBT people experience more poverty than their heterosexual counterparts. LGBT people sometimes lose the support of their families when they come out. They are more vulnerable to employment discrimination than the general population. And, because of their lack of access to marriage in most states, LGBT people may face difficulties accessing health insurance and other necessary benefits.

What is, and what should be, the response of legal services advocates? Health care, housing, retirement, and estate planning are all areas in which low-income LBGT older adults may need advocates to help them tailor the law to their particular needs. Medicare-participating long-term nursing facilities much comply with “quality-of-life” requirements, and Section 8 housing can be used to secure long-term housing for LGBT partners. Advocates can help LGBT older adults arrange their affairs and name beneficiaries to reflect these individuals’ wishes and protect their partners.

Advocates interested in learning more should check out the March-April issue of Clearinghouse Review, which features two articles on meeting the legal needs of LGBT clients.

No Real Progress: 1969-2004

[This is the second in a series of six articles summarizing the half-century history of the U.S. poverty threshold and the dire need for an updated poverty measure.]

MoneyToday's policy experts are not the first to raise concerns over the poverty measure's accuracy. As early as November 1965, policymakers expressed concerns about the poverty thresholds and how to adjust them for increases in the general standard of living. In 1968, ideas began to be discussed about raising the thresholds to reflect such increases. A committee was established to reevaluate the thresholds. Ultimately, the committee decided to adjust the poverty thresholds only for price changes, and not for changes in the general standard of living. Thus, in 1969, it was decided that the thresholds would be indexed by the Consumer Price Index (CPI) instead of by the per capita cost of the economy food plan.

In 1973, a thorough review of federal income and poverty statistics occurred. Specifically, the Subcommittee on Updating the Poverty Threshold recommended that the poverty thresholds be updated every ten years using a revised food plan and a multiplier derived from the latest available food consumption survey. It also recommended that the definition of income used to measure overall income should also be the income definition used to calculate the multiplier for the poverty thresholds. This would generally have resulted in higher poverty thresholds at each decennial revision. Unfortunately, none of these changes were implemented.

Interestingly, beginning in 1979 the Census Bureau began testing a variety of experimental poverty measures using various expanded definitions of income and alternative methods to account for inflation. None of these, however, replaced the official poverty measure.

In 1981, several minor changes were made to the poverty thresholds in accordance with recommendations of an interagency committee. During most of the 1980s, although there were extensive debates about poverty measurements, particularly about proposals to count government noncash benefits as income for measuring poverty without making corresponding changes in the poverty thresholds, no changes were actually made.

Perhaps the closest the U.S. came to succeeding in revising this measure came in 1990. A Congressional committee tasked the National Academy of Sciences/National Research Council (NAS) with studying the official U.S. poverty measure and providing suggestions for how to revise it. In May 1995, NAS’s report was published. According to the report:

The major conclusion is that the current measure needs to be revised: it no longer provides an accurate picture of the differences in the extent of economic poverty among population groups or geographic areas of the country, nor an accurate picture of trends over time. The current measure has remained virtually unchanged over the past 30 years. Yet during that time, there have been marked changes in the nation’s economy and society and in public policies that have affected families’ economic well-being, which are not reflected in the measure.

Ultimately, none of NAS’s recommendations were implemented.

In 2004, the Office of Management and Budget held a workshop to review progress made in moving towards a new measure of income poverty as recommended by NAS’s 1995 report.  Over the succeeding three years, these discussions continued but did not result in any consensus. That is, not until recently.

Stay tuned for the next installment in the series where we discuss the findings and implications of the National Academy of Sciences’ Report.

Hard Numbers: A Measure Meant for Research, Not Eligibility

[This is the first in a series of six articles summarizing the half century history of the U.S. poverty threshold and the dire need for an updated poverty measure.]

CashThe Federal Poverty Measure is badly in need of revision. The current measure is not an accurate reflection of the resources a family needs to stay healthy and thrive. This six-part series will examine the history of the measure and past and current efforts to reform it.

The Federal Poverty Measure is a decades-old relic that became widely utilized by historical accident. The current measure was created during the mid-1960s by an economist at the Social Security Administration (SSA) who began publishing articles with poverty statistics for the United States using a poverty measure that she had developed.

Since 1965, there have been two slightly different versions of the Federal Poverty Measure: (1) the poverty thresholds, and (2) the poverty guidelines. The poverty thresholds are the original version of the Federal Poverty Measure. They are published by the Census Bureau and are used mainly for statistical purposes. The poverty guidelines are a simplification of the poverty thresholds. They are published by the Department of Health and Human Services and are used for administrative purposes (e.g., determining financial eligibility for certain federal programs).

The original poverty threshold measure has two components--a set of poverty lines or income thresholds, and a definition of family income to be compared with those thresholds. Both components of the measure are flawed and need to be revised.

In devising the measure, the economist used the price of food as the basis of the measure. At the time the measure was developed, families of three or more persons spent about 1/3 of their after-tax money income on food. In particular, the "economy food plan"--the cheapest of four food plans developed by the Department of Agriculture, which was designated for "temporary or emergency use when funds [were] low," was used as the basis. The poverty thresholds were determined by taking the dollar costs of this food plan for families of various sizes and multiplying the costs by a factor of three to allow for other expenses. However, currently food is only 1/7 of a family's budget, while the costs of housing, child care, and health care, none of which are taken into consideration, have all risen disproportionately to the cost of food.

A family's income was calculated using pre-tax income levels, since that was the only income information available at that time. Although income was based on pre-tax dollars, the poverty thresholds were created using estimated income available after taxes. In other words, using this measure, a family would seem to have more money relative to the poverty line than they had in reality. The inconsistency of this method was acknowledged, but since there was no other alternative, it was understood that the result would yield "a conservative underestimate" of poverty.

In effect, the measure was for a hypothetical average family that had to cut back on its expenditures. The measure assumed that expenditures for food and non-food items would be cut back at the same rate and that the amount that a family would be spending on non-food items would be minimal, but sufficient. Thus, the original poverty measure was presented as a measure of income inadequacy, not of income adequacy. As its developer noted, "if it is not possible to state unequivocally 'how much is enough,' it should be possible to assert with confidence how much, on an average, is too little."

In May 1965--just over a year after the Johnson Administration initiated the War on Poverty--the Office of Economic Opportunity adopted the poverty thresholds as a quasi-official definition of poverty for statistical purposes and for program planning. In 1969, the thresholds became the federal government's official statistical definition of poverty, though it was clearly stated that "[the official poverty thresholds] were not developed for administrative use in any specific program and nothing in this Directive should be construed as requiring that they should be applied for such a purpose." Thus, these thresholds were intended to be used for research, not to determine eligibility for antipoverty programs.

The next blog in this series will examine previous efforts to revise the Federal Poverty Measure.

 

How Does Health Care Reform Help Older Americans?

Senior CitizensThroughout the debate on health care reform, the focus on changes for older Americans was largely prescription drugs and closing the drug coverage "doughnut hole." These changes are extremely important for many senior citizens who hit their drug coverage limit and are forced to pay high out-of-pocket costs. In fact, there is a $250 payment to seniors who reach the doughnut hole--a down payment until the eventual full elimination of the doughnut hole that will happen later this year.

However, the new law also includes several other provisions that will greatly assist older Americans, particularly low-income senior citizens, which the National Senior Citizens Law Center details in several recent reports.

  • For older Americans who rely on long-term services, the new law will create financial incentives for states to shift Medicaid spending toward community-based services, including a six-percentage point increase in federal Medicaid reimbursement for community-based care initiatives.
  • The law establishes several pilot programs to study and improve coordination of care for Americans who receive coverage through both Medicare and Medicaid, otherwise known as "dual eligibles."
  • The law strengthens medical assistance programs to ensure beneficiaries promptly receive covered services.
  • The law eliminated co-payments for prescription drugs for individuals receiving long-term care services in the home and in an institutional setting. Under current law, individuals living in an institutional setting do not have co-payments, while those receiving services in the home do have co-payments.
  • For Americans who are too young to qualify for Medicare but who retire early, a temporary "reinsurance" program will reduce the cost burden on employers.

According to the National Senior Citizen Law Center, the most significant new provision in the new law is the extension of coverage for 32 million Americans, which includes millions of people aged 50-64, through a Medicaid expansion, new state-based Exchanges with subsidies for low- and middle-income Americans, and regulation of the worst practices of insurance companies. Finally, millions of low-income older Americans will have access to the care that they need, and important improvements will be made to programs that contribute to the health and well-being of older Americans.

Check out the NSCLC reports for details on how reform benefits older Americans!

Carrie Gilbert co-authored this post.

 

Let's Get Health Coverage for All Kids in Illinois

The United States Department of Health and Human Services and the states have already begun to implement the health reform law, which will finally provide health insurance coverage to low-income childless adults and individuals with preexisting conditions. Ultimately, health reform will insure an additional 32 million people. In Illinois, we do not need to wait to cover all uninsured children. Thanks to Illinois' All Kids program, we have the opportunity to provide kids with the health coverage and care they need right now. Illinois has led the way in health coverage for children, and was the first state in the country to offer comprehensive, affordable coverage to every uninsured child.

Happy children

Kids who have health insurance are more likely to receive the preventive care, treatment for chronic conditions and vaccines that they need. Children with health insurance are generally healthier throughout their childhood and adolescence. Good health in childhood has been linked to a more productive and lucrative adulthood. 2008 Census data revealed the lowest uninsured rates for children in over 20 years, largely because public programs like All Kids serve as a vital safety net for children whose families lose or cannot afford health coverage.

While Illinois has made immense progress in the effort to cover uninsured children since the inception of All Kids, there are still approximately 235,400 uninsured Illinois children. Because of the All Kids program, however, this is a problem we can solve: we must find and enroll these uninsured kids. One of the best ways to find and enroll uninsured kids is to host a one-day enrollment event in your community. An enrollment event provides families with answers to their questions about the All Kids program as well as the resources and support they need to enroll their kids. The Shriver Center has assembled a toolkit with information, sample materials, and support and advice for hosting a successful enrollment event that you can check out here. Now is the time to enroll Illinois kids in health coverage in provide them with the access to health care they deserve.

This post was coauthored by Carrie Gilbert.

It's Safe to Start Dreaming Again

For any Illinoisan who may have put aside their dream of starting a small business for fear of losing or not being able to afford health insurance coverage, it’s safe to start dreaming again. Illinois small businesses are getting some financial relief from the recently enacted health insurance reform signed into law by President Obama on March 23, 2010. This will be of great help as small businesses’ health care costs have grown 129% since 2000. Luckily, President Obama had small business owners in mind when he signed the health insurance reform bill into law. He said, “I’m signing it for Ryan Smith, who’s here today. He runs a small business with five employees. He’s trying to do the right thing, paying half the cost of coverage for his workers. This bill will help him afford that coverage.”  And the thousands of Ryan Smiths in Illinois will see many benefits from the new law. Here are some of the main benefits:

Right away many Illinois small businesses—and an estimated 3.6 million total small businesses nationwidewill get a tax cut this year to help them pay for health insurance for their employees. This tax credit starts at up to 35% of the money the small business owner spends on premiums for employees and increases over time, eventually reaching 50% when the Insurance Exchanges go into effect in 2014. Nonprofit organizations also qualify, starting at 25% and increasing to 35% of the employer contribution. In this way, small business owners who choose to provide health insurance to their employees will be able to do so more affordably and can stop worrying about rate hikes. 

By 2014, small business owners will also have access to the new Small Business Health Options Program (SHOP) Exchanges so they can find the best deal through a simple and efficient process. Funding will be given to the states through January 1, 2015 to establish these Exchanges within one year of enactment. In the Exchange, small businesses with up to 100 employees (states can limit to 50 employees) can purchase qualified coverage. 

This Exchange will greatly assist small businesses, which have been paying up to 18 percent more than large companies for the same health insurance policy. The independent and non-partisan Congressional Budget Office found that premiums for small businesses will go down. The larger pool leads to more insurer competition and lower administration costs, thereby increasing affordable insurance options. And the larger pooling structure will protect small businesses from sudden, arbitrary rate hikes because a worker gets sick. For those small business employees and self-employed who are currently excluded from coverage due to a pre-existing condition (and who have been uninsured for at least six months), right away there will be a temporary high risk pool established to guarantee coverage.

Small business owners will benefit greatly from the new law. With dollars freeing up due to the tax credit, new competitive insurance marketplace and other health cost savings, small business owners will be able to reinvest in and grow their organizations, offer increased salaries to employees, hire new employees and retain quality employees.