Health group: Blagojevich's plan would save billions

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SPRINGFIELD (AP) - Illinois families and businesses will save billions of dollars in health expenses if Gov. Rod Blagojevich's plan to overhaul the state health care system is adopted, an advocacy group said Tuesday. But the tax increase to pay for that health plan would be the nation's biggest in years and would sharply increase the tax burden in Illinois, another group concluded. The Campaign for Better Health Care says for every dollar spent on the Blagojevich tax plan, consumers would see about $2 in savings. "The cost of care will still go up. It's just that it will go up at a slower rate," said Kenneth Thorpe, an Emory University professor who conducted the study. He found that between now and the year 2011, the Blagojevich plan would cost about $7.2 billion and would keep health expenses about $15.6 billion lower than if the state does nothing. The savings would come from preventing expensive illnesses, cutting administrative costs and reducing the amount that people and businesses pay to cover people without insurance, Thorpe said. He estimated that if the program were fully implemented, the premiums for a family with private insurance would be $1,775 lower than if the state took no action. Blagojevich hailed the findings. "Clearly, our proposed investment in health care is not just the right thing to do, it's the economically responsible thing to do," the Chicago Democrat said in a statement. Doug Whitley, president of the Illinois State Chamber of Commerce, said that if the study is wrong, businesses would end up facing higher expenses. They might cut costs by pushing more of their workers into state health programs or simply shutting down, he warned. The heart of Blagojevich's plan is an effort to ensure that everyone in the state has access to health insurance. He proposes paying for it by creating two new business taxes that would generate about $8.6 billion a year, with $1 billion of that going toward lowering local property taxes. The $7.6 billion net increase would give Illinois the nation's 8th-highest overall tax burden, according to the Tax Foundation, a national organization that favors lower taxes. Illinoisans would pay 12.2 percent of their incomes to state and local taxes, the group found. The foundation also says the tax increase would be far larger than any increase in any other state this decade. As a percentage of the state's general revenues, the Illinois expansion would be about twice the size of the next-biggest increase. Blagojevich's aides questioned the foundation's conclusions, dismissing them as "imaginary numbers." They also argued that to whatever degree the tax burden rises, the resulting improvements in health care would be worthwhile. "You've got to look at what you're buying, as well as the money going out of your pocket," said Doug Kane, a consultant hired by the administration.