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UNPAID
SICK LEAVE WILL COST ILLINOIS MEDICAID EXPANSION COSTS ARE ALREADY
DOUBLE INITIAL PROJECTIONS
Illinois Policy Institute
Between 2014 and 2016, Illinois’ Medicaid
expansion cost $4.6 billion more than its supporters had forecasted,
crowding out services for Illinois’ most vulnerable residents.
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 Illinois taxpayers have paid $9.2 billion for the state’s Medicaid expansion,
slightly more than double what politicians initially projected. Massive cost
overruns have left fewer resources for other priorities, including education,
public safety, and even services for the most vulnerable. As Congress now
prepares to offload more expansion costs onto state budgets, Gov. Bruce Rauner
should begin the process of rolling back the Medicaid expansion before it’s too
late. That means stopping new enrollment as soon as possible and letting the
program gradually unwind as current enrollees improve their financial
situations.
Obamacare projections vs. actual costs
In January 2014, Illinois extended Medicaid eligibility to a new class of
able-bodied childless adults, as permitted by Obamacare. At the time, the
administration of then-Gov. Pat Quinn and the Illinois General Assembly promised
taxpayers that the expansion would cost no more than $4.6 billion during the
first three years. Those costs would initially be borne by the federal
government, but the state began picking up a share of the costs starting in
January 2017.
New data provided by the Illinois Department of Healthcare and Family Services
now confirm that the Medicaid expansion has been far more expensive than
advertised. Between 2014 and 2016, taxpayers paid out a whopping $9.2 billion
for Illinois’ Obamacare expansion – slightly more than twice what was initially
forecasted. That total includes nearly $7.7 billion in fee-for-service payments
to medical providers and capitated payments to managed care companies serving
this population. It also includes an extra $1.6 billion in supplemental payments
to hospitals.
Higher costs mean delays for needy patients, budget woes for state
Ultimately, this means fewer resources for other critical priorities, including
education and public safety. But it also means less funding available to provide
services for Illinois’ high-need residents. Nearly 20,000 children and adults
with autism, epilepsy, developmental disabilities and other critical conditions
are currently languishing on a Medicaid waiting list for needed home and
community-based services. Nearly 70 percent of those individuals have reported
an emergency or critical need for services. Many will die before ever getting
the services they so desperately need.
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 If Illinois does not quickly begin unwinding the Medicaid
expansion disaster, these funding challenges could soon have even
more devastating impacts on the state budget. Republican leaders in
Congress have already proposed shifting more Medicaid expansion
costs onto state budgets, beginning in 2020. Under state law,
Illinois’ Medicaid expansion should automatically terminate within
four months of a federal funding change – removing 650,000 or more
able-bodied adults from the program overnight. If the General
Assembly changed state law in order to continue the expansion, it
would need to come up with billions of dollars in new funding,
putting other priorities at even further risk.
Policymakers shouldn’t wait until 2020 to address the pending crisis
caused by Obamacare’s failed Medicaid expansion. Rauner should at a
minimum begin preparing a Medicaid waiver to freeze enrollment in
the expansion program as soon as possible. Under this approach, no
new applications for Obamacare’s Medicaid expansion would be
approved, but those already enrolled would be allowed to stay in the
program until their situations improved and they became ineligible.
This approach has a proven track record. Arizona and Maine closed
off new enrollment in earlier expansions after facing massive cost
overruns. Based on the experiences in those states, enrollment in
Illinois’ expansion could drop by nearly 45 percent in just the
first year as existing enrollees gradually cycle off the program.
Enrollment would continue to decline until the end of the transition
period.
Not only would this leave Illinois in a better fiscal position when
the new federal funding changes go into effect, but it would also
provide immediate relief to taxpayers and protect limited resources
for seniors, poor children, and individuals with disabilities.
Illinois’ Obamacare expansion is spiraling out of control. The
governor should look for ways to rein in this expansion before it
eclipses all other spending priorities.
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