Despite court rulings, Obamacare subsidies to continue in Illinois

By Jamey Dunn

Dueling court rulings handed down today put the future of a key piece of Obamacare into question, but for now, nothing will change about the way the law is implemented in Illinois.

A three judge panel in Washington D.C. ruled this morning that under the Patient Protection and Affordable Care Act, federal subsidies to bring down the cost of insurance should only be available to residents of states that operate their own online insurance exchange. Under the decisions, Illinois and 35 other states would lose the subsidies. Illinois partnered with the feds on Getcoveredillinois.gov, but the website still relies on the federal exchange to sign patients up for coverage.

Just hours after the U.S. Court of Appeals for the D.C. Circuit weighed in, The Fourth Circuit Court of Appeals in Virginia issued a diverging opinion on a similar case. That panel of judges said that the wording of the law was unclear, but the majority agreed that the law allows for the subsidies to be dispersed through the federal exchange.

In Illinois, 217,000 people obtained insurance through the exchange. More than three quarters of those qualified for a subsidy. Health officials in Illinois say that those approximately 168,000 will not lose their subsides as an immediate result of the rulings. “We are monitoring today’s appeals court decisions in which two courts have rendered differing rulings. The bottom line for now is that nothing has changed, and the subsidies created under the law to help people cover the cost of their health care remain in effect. Get Covered Illinois is focused on preparing for the enrollment period for year two that will start this fall,” Jennifer Koehler, executive director of Get Covered Illinois, said in a written statement.

President Barack Obama’s administration says it plans to ask the full panel of judges at the D.C. appeals court to consider the issue. That group is made up of seven judges appointed by Democrats and four appointed by Republicans. Two other judges, one appointed by a Democrat and one by a Republican, could sit in on the case. It is possible that the issue may end up before the U.S. Supreme Court. The court previously upheld the law, but allowed states to opt out of a massive Medicaid expansion called for by the Affordable Care Act. Illinois lawmakers approved and Gov. Pat Quinn signed into law the expansion in Illinois.

State online insurance exchanges 

Source: The Henry J. Kaiser Family Foundation, KFF State Health

Illinois ranks low in statehouse reporters per capita

A recent study found that Illinois has fewer than one statehouse reporter for every 500,000 residents.

The Pew Research Journalism project took a look at statehouse press corps in all 50 states. The population of a state was generally predictive of the size of the reporting pool based in its capitol building. However, when Pew's researchers diced the numbers a different way, they found that states with larger populations had fewer reporters per 500,000 residents than many smaller states. Illinois has 0.9 statehouse reporters per 500,000 residents.

From Pew:

 The state with the highest rate of full-time reporters per 500,000 residents (at 10.4) is tiny Vermont, which at about 625,000 residents, is the second smallest state in the nation by population. The smallest, Wyoming, ranks third when population is factored in, with 5.3 statehouse reporters per half million people. Several other states with modest populations round out the top tier: Alaska (5.6); Montana (4.0) and Rhode Island and Idaho (tied at 3.8). The median state rate is 1.3 reporters per 500,000 residents. 

Conversely, some of the largest states—with some of the largest statehouse press contingents—end up at or near the bottom in the rankings. California is second in overall number of full-time reporters (43) covering statehouse news for a population of more than 37 million. But that works out to only 0.6 journalists per 500,000 residents—the lowest rate in the nation. Texas, which ranks No. 1 at 53 full-time statehouse reporters, finishes in the bottom half of states by the same measure (1.1 reporters).

Statehouse news coverage in Illinois follows national trends

By Jamey Dunn

A new report on statehouse press corps found that as the number of full-time reporters shrinks, new media outlets and political communication staffs seek to fill the gaps in coverage.

The Pew Research Journalism Project surveyed statehouse media outlets, political communications staff and experts on government in all 50 states. (Disclosure: I participated as a respondent in the survey.) The group found that nearly 1,600 reporters are based in state capitol buildings covering state governments across the country. The majority of those journalists, 851, are assigned to cover state government part time, while 741 are on the state government beat—covering legislatures, governors and state agencies— full time. State populations are generally predictive of the size of their statehouse press corps. Pew found that of the 10 most populous states only two, Georgia and North Carolina, were not among the 10 largest press corps. At the time of the survey, Illinois had 22 full-time statehouse reporters. Texas had the most at 53 and South Dakota had the fewest with two.

Less than a third of all newspapers in the country assign a reporter, either full or part-time, to the statehouse. The vast majority of television stations, 86 percent, do not assign a reporter to the state capitol. Still, the largest share, 38 percent, of reporters based in state capitol buildings work for newspapers, and newspaper reporters make up 43 percent of full-time statehouse journalists. Television comes in second at 19 percent of all reporters covering state government. Nontraditional outlets, such as digital-only sources, make up 16 percent. Wire services make up 9 percent of reporters assigned to state capitols across the country, and most of those journalists work for the Associated Press. Radio reporters make up 8 percent. University entities and “additional sectors” rounded out the totals with 7 percent and 6 percent, respectively. (Pews figures total more than 100 percent because of rounding.)

The study cites statistics from the American Journalism Review, which tallied up statehouse newspaper reporters five times between 1998 and 2009. Each time the number of reporters dropped, and the largest decrease came between 2003 and 2009, when the overall number of newspaper reporters saw a large decline. Statehouse bureaus shrank at a slightly larger margin, 35 percent, than newsrooms, 30 percent. “It does suggest, if nothing else, that statehouse jobs are certainly no more immune to the cutbacks then anything else,” said Mark Jurkowitz, associate director of the Pew Research Center’s Journalism Project. For more on the cutbacks in Illinois, see Illinois Issues October 2008.

The survey found that traditional news sources are turning to consolidation and collaboration. One-time rivals are now working together and sharing information. For example, the Miami Herald and the Tampa Bay Times now share a bureau in Tallahassee and coordinate their coverage of Florida state government. Students are also playing a big role in statehouse coverage. One of seven people reporting from a state capitol pressroom is a college student. This finding holds true in Illinois, with statehouse bureaus taking on Public Affairs Reporting interns during the spring legislative session since the programwas founded in the 1970s. Jurkowitz said that it is impossible to tell if interns are being used to make up for recent cuts in staff because there is no historical documentation on the number of statehouse interns nationwide.

Pew found that one in six statehouse reporters work for “nontraditional” outlets, such as nonprofit organizations, niche publications and digital-only news sources. According to the study, the largest statehouse bureau in the country, which has 15 reporters, is operated by the Texas Tribune, a nonprofit primarily digital operation. Most of these outlets are relatively new, such as The Illinois News Network, which is based out of the conservative-leaning think tank the Illinois Policy Institute. But some are longstanding news sources, such as Rich Miller’s Capitol Fax. Pew found that many such organizations have an ideological bent or market paid subscription content to “insiders” seeking information on state governments because it relates to their occupation.

Political communication staffs now provide information that more closely resembles news coverage. “The legislative offices themselves are getting much more into the business of directly communicating with the public and circumventing the media,” Jurkowitz said. In Illinois, the Senate Democrats and House Republicans are both good examples of this trend. A slideshow highlighting new laws created by Senate Democratic communication staff went viral earlier this year, receiving more than 1 million views. Both caucuses frequently capture video of their members and distribute it online, post information to websites that resemble news outlets and stay active on social media. Former journalists serve as high-level staffers for both caucuses. For more on they ways Illinois officials use social media, see Illinois Issues November 2013.

Citizens can also access live-streaming video and audio of legislative session and most hearings on the Illinois General Assembly’s website. Jurkowitz called all this direct communication from officials a “mixed blessing” because it provides the public with more information, but it often comes with a hefty dose of political spin.

“I do think there’s been a loss in general across the country, and that’s very concerning to me,” Patrick Marley, who covers the Wisconsin Statehouse for the Milwaukee Journal Sentinel, told Pew “We have scads of reporters in Washington covering every bit of news that Congress makes. State legislators have more effect on people’s daily lives. We need to have eyes on them, lots of eyes.” Jurkowitz said Pew’s research indicates that state governments may be doing more heavy policy lifting than they have in the past. He said a separate Pew study found that almost half of state governments enacted more laws in 2012 than Congress did in 2011 and 2012 combined.

As Congress continues to be gripped by gridlock, states have been left to tackle high profile policy issues, such as immigration and health care. For example, states are playing a large role in the implementation of the Affordable Care Act and a ruling from the U.S. Supreme court allowed them to opt out of a massive Medicaid expansion—a key component of the law. In many cases, state lawmakers voted on whether to adopt the expansion. In some states, governors made that call. “Obviously, we know that not a lot of activity is going on here at the federal level,” he said. “I think we’ve seen a lot of the big national public policy debates actually play out at the state level.”

Options for a pension reform Plan B may be limited

By Jamey Dunn

The Illinois Supreme court issued a ruling Thursday on state employee health care that bodes ill for supporters of the recently passed cuts to public employee retirement benefits.

The court ruled that health care benefits for retirees fall under the pension protection clause—the very sentence of the state’s Constitution that many supporters of pension reform had hoped the justices would be willing to overlook. The pension clause states: “Membership in any pension or retirement system of the State, any unit of local government or school district, or any agency or instrumentality thereof, shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired.”

The ruling indicates that the justices are inclined to side with public employees and retirees. In the 6-1 opinion, Justice Charles Freeman wrote: “Under settled Illinois law, where there is any question as to legislative intent and the clarity of the language of a pension statute, it must be liberally construed in favor of the rights of the pensioner.” Justice Anne Burke wrote the dissenting opinion. In it, she did not question the protection of the pension clause, but she argued that retiree health care benefits did not fall under that protection.

Some lawmakers seem to see the ruling as writing on the wall for the pension reform law, which is still working its way through the legal system. “Today, the Illinois Supreme Court made it very clear that the Pension Clause means what it says,” Senate President John Cullerton said in a prepared statement. “The court cannot rewrite the Pension Clause to include restrictions and limitations that the drafters did not express and the citizens of Illinois did not approve. The clause was aimed at protecting the right of public employees and retirees to receive their promised benefits and insulate those benefits from diminishment or impairment by the General Assembly.” Cullerton added: “If the court’s decision is predictive, the challenge of reforming our pension systems will remain. As I have said from the beginning, I am committed to identifying solutions that adhere to the plain language of the constitution.”

Kent Redfield, an emeritus professor at the University of Illinois Springfield, said that while the ruling pertains to a different case, the language used is clear. “You could find some way to parse some of it, but it’s really, really difficult. There’s no logical way to get to upholding Senate Bill 1 (the pension reform legislation) based on the clear content of this ruling and the way they’ve construed the pensions clause.”

Others disagree that the ruling is a harbinger of the pension law’s death. Rep. Elaine Nekritz, who was key player in getting SB 1 passed, said that the justifications the law makes for reducing benefits were not part of the retiree health care case. She said that the court has yet to consider those points. The law lays out the dire fiscal situation that the state is in and claims that state elected officials need special powers to curtail the estimated $100 billion unfunded liability and save the state from a budget disaster. However, one line in today’s decision seems to blow a hole in that argument. “In light of the constitutional debates, we have concluded that the [pension] provision was aimed at protecting the right to receive the promised retirement benefits, not the adequacy of the funding to pay for them.” 

Supporters also claim that a reduction in the amount that employee would pay into the system represents a consideration they are being given for a change to the contract that is their membership in a pensions system. Nekritz said that the ruling is clear that benefits are protected, but she says it is unclear if that protection is absolute. “Does it really mean that we can do nothing, or are there some things that we can do based on the legal arguments that we make under Senate Bill 1?”

Those arguments aside, if the Illinois Supreme Court rejects the new pension law, what options do legislators have?

Cullerton had proposed offering employees a choice between receiving subsidized health care coverage or keeping their current pensions benefits. If they had chosen health care, they would have seen a reduction in their retirement income including a cut to the expensive compounded interest cost of living adjustments (COLAs) retirees currently receive. Cullerton said that this scheme could potentially fulfill a legal standard of giving employees consideration for a reduction in benefits. The Senate approved the plan, but it was never called for a vote in the House.

However, that plan was based on the idea that health benefits were not protected by the Constitution—a concept that runs counter to today’s ruling. “The concept of consideration is still viable. The court has not rejected it or defined what the limits are. It’s just hard to see what you can give up in exchange,” Redfield said. “It’s hard to see what other major carrot you can offer to people in terms of giving up their COLA.”

Skokie Democratic Rep. Lou Lang introduced legislation that would extend the current income tax rates, which are due to start rolling back on January 1, to pay down the unfunded liability.

But Lang’s plan also calls for larger contributions from employees and an increase in the retirement age. Both of these provisions could be seen as a reduction in benefits by the court. Much of the revenue from the temporary income tax increase has gone toward making the required annual pension payment after lawmakers voted to skip payments and short payments for several years in the past.

There have also been proposals to change the pension payment schedule to even out the cost of the annual payment. The state is currently on a system that resulted in large balloon payments, much like a subprime mortgage. Some such plans also call for funding the system at 80 percent as opposed to 95 percent or 100 percent. Redfield said that a proposal that changes the payment structures would need to be combined with changes to the state’s revenue structure, such as expanding the sales tax base to some services, budget cuts or both. “As a stand alone, then it looks like an excuse to keep doing what we’re doing,” he said.

Republican candidate for governor Bruce Rauner has advocated for moving employees’ future benefits to a system that looks more like a 401-K. That plan would go even further than SB1, so it is unlikely that it would be upheld if SB 1 were rejected. But it is possible that the court’s ruling might strengthen his case for offering a defined contribution plan to newly-hired employees. “It may embolden Rauner to say well we’ve got to get everybody going forward into a defined contribution [plan],” Redfield said. However, such a proposal would have no impact on the unfunded liability for current employee and retiree benefits. It also means the state would likely have to start contributing to Social Security benefits for positions that do not currently offer them.

Meanwhile Gov. Pat Quinn is emphatically sticking by his opinion that SB 1 is constitutional. “We believe the pension reform law is constitutional. This landmark law was urgently needed to resolve the state’s $100 billion pension crisis. It was also urgently needed to ensure that teachers, university employees and state workers who have faithfully contributed to the pension system have retirement security,” said a written statement from his office. “We’re confident the courts will uphold this critical law that stabilizes the state’s pension funds while squarely addressing the most pressing fiscal crisis of our time by eliminating the state's unfunded pension debt.”

Redfield said that there will likely be many suggestions for a Plan B on pension reform in the coming months. “I think people will be floating lots of ideas that probably aren’t feasible and really won’t address the short-term problems—between now and November,” he said. “There’s nothing politically to be gained by standing up and saying ‘you know, we really, really screwed up, and we have no options but to raise your taxes.’”

 But he said that new revenues and cuts to state services to cover the cost of the pension systems might be the only real option available to address the problem if the court rejects SB 1. If that happens, the state will almost certainly face another credit downgrade if it fails to act to address the liability. The current budget is based on $650 million in borrowing that has to be paid back. In Fiscal Year 2016, the tax rate will be lower for the entire fiscal year instead of just half of it. FY16 could turn out to be one doozy of a budget for lawmakers and whomever is the governor to sort out. “You want to be around for a historic session for the General Assembly? I think everybody has a front row seat,” Redfield says.