Last week, Gov. Pat Quinn unveiled legislation (SB 240, House Amendment 1) that he said would allow Illinois to capture $200 million in federal funds to expand the state’s pool for high-risk health insurance.

A few news outlets picked up on the story, but the coverage was minimal at best. Here's a bit more detail:

Included in the federal health care package was a provision that provided an additional $5 billion in funding for high-risk insurance pools, which provide coverage to individuals with preexisting conditions -- such as chronic illnesses or disabilities -- who have been rebuffed by private health insurers. Illinois currently runs two of these pools, both under the Illinois Comprehensive Health Insurance Plan (ICHIP).  Together they service 16,000 people.

But to expand those existing programs using the new federal funding, the state legislature must make a technical change to the ICHIP statute. That's what Quinn's bill would do. The House Revenue and Finance Committee approved the measure along partisan lines last Wednesday.  And it could see further action when the legislature reconvenes to address the state budget later this month (most likely next week).

While the bill remains in limbo, Illinois Insurance Director Michael McRaith tells us that he is exploring a number of alternatives to capture the available funds.  One possibility is to allow the federal government to come into the state and establish its own pool. 

Yet he maintains that the best approach is for the state to dump the federal money into ICHIP, on both administrative and economic grounds. Not only would new enrollees be able to tap into an established provider network, but the larger pool would better spread the risk and therefore lower premium costs for all participants (possibly by up to 40 percent).  "For 20 years, ICHIP has been successful," he says. "We know it works."