Expected cost for Illinois’ noncitizen health care program grows to $1.1 billion

[May 05, 2023]  By JERRY NOWICKI
Capitol News Illinois
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SPRINGFIELD – The estimated cost for Illinois to continue providing health care coverage to noncitizens who are otherwise ineligible for Medicaid benefits has been revised upward to $1.1 billion for the upcoming fiscal year.

As of the end of March, the Illinois Department of Healthcare and Family Services estimated it would cost $990 million to fund the program that provides state-funded health care to individuals age 42 and older who would otherwise qualify for Medicaid if not for their citizenship status.

The new estimate, shared by IDHFS Director Theresa Eagleson in testimony to a Senate appropriations committee Wednesday night, is now $880 million beyond the $220 million estimate included in Gov. JB Pritzker’s February budget proposal.

The administration also estimated the current-year expenditures for the program at $220 million, but it has cost over $400 million thus far with two months to go in the fiscal year.

IDHFS chief of staff Ben Winick told the committee that the original estimate relied on the Census Bureau’s American Community Survey data to estimate the eligible population, then assumed a certain percentage would enroll.

But both the cost of providing care and the number of enrollees have far outpaced estimates.

“Because of the unreliability of that data, the projections for enrollment are really just focused on month-over-month growth based on the trends that we're seeing and not tied to the universe of eligibles,” Winick said.

10 percent monthly growth

The projections are now based on the program’s current month-over-month growth rate of roughly 10 percent. The number of enrollees is expected to grow to over 120,000 in Fiscal Year 2024. The previous estimate was 98,500 enrollees.

Winick noted the program currently covers about 56,000 individuals while the department oversees health care for about 3.9 million people through its various programs statewide.

Sen. Dave Syverson, R-Cherry Valley, raised concerns over the fact that no other states offer the same level of health care coverage for noncitizens as Illinois. That, he said, could result in ever-increasing enrollment and upward adjustments to cost estimates.

“As Illinois is the only state in the nation that fully covers health care for undocumenteds from age 42 and older, when they're crossing the border, and they realize they have health conditions, they know there's one state to come to if you have health issues,” he said at a Thursday news conference. “Illinois now, because of the policies of this state of being a welcoming state, is now being inundated with every sick individual from around the country that’s coming here.”

The same Senate committee heard a proposal from Sen. Omar Aquino, D-Chicago, that would further expand Medicaid coverage to noncitizens age 19 and older. That would cost another $380 million, per IDHFS estimates.

“We were the first (state) in this country to provide care to populations like this from 42 and above. We are a welcoming state, I say that with a sense of pride,” Aquino said.

Aquino said the expansion means people who were “living in the shadows” are now able to seek care, and the pace of the program’s growth shows the need for it.

“Some of this is highlighting, again, a lot of the untreated medical issues that they have from Type 2 diabetes, cancers and so forth,” he said.

Eagleson noted that the per-patient cost for individuals age 65 and older has been leveling off since that population was first made eligible for the state-run health care program in 2021. The program has since been expanded twice to cover those 42 and older.

State Sen. Dave Syverson, R-Cherry Valley, speaks at a news conference Thursday at the Illinois State Capitol. (Capitol News Illinois photo by Jerry Nowicki)

“I think it's important to say that we are seeing people get those diagnostic services and drugs to help them manage chronic conditions and things like that,” Eagleson said. “So on the senior population that started sooner…those costs grew pretty rapidly in the first years, and then they actually decreased and now are just normal inflationary, so they start to level off as people get the treatment.”

Winick said a large portion of the program’s enrollees live in Cook County, and its results have been born out in decreased reliance on the county-run health system.

“A lot of that's because those conditions are now being managed,” he said. “People are getting proper treatment and now they're getting more preventive services than the higher-end stuff and they are using their coverage to access a wider variety of providers.”

Defraying the cost

The department’s all-funds budget request as of February was $37.2 billion, with just over $9 billion from the General Revenue Fund.

The Pritzker administration estimated that the IDHFS budget as proposed could cover about $300 million of the greater-than-expected costs.

“The governor’s focus remains on investing in priorities he outlined during his budget address,” Pritzker spokesperson Jordan Abudayyeh said in a statement. “His administration is working closely with the General Assembly to ensure that additional priorities fit within a balanced budget framework.”

Department officials noted that they were looking into other ways to defray costs as well.

Because the individuals are not citizens, the federal government does not match the state’s contributions to the program. But Eagleson said the federal Medicaid program “does fund the emergency services for undocumented residents.”

“And so we have already gotten a verbal commitment for – it's about $67 million in (federal) match for the money that we've already spent on the program,” she said of discussions with the federal government. “And then we think the estimate based on the cost…for emergency services will be in the neighborhood of $100 to $120 million going forward.”

The Republican senators also noted that the noncitizens are part of a fee-for-service Medicaid program instead of the Medicaid managed care program in which most other recipients are enrolled.

That managed care system uses private insurance companies known as managed care organizations, or MCOs, to coordinate care for Medicaid recipients. The state releases funds to MCOs at a statute-specified rate. Those MCOs are charged an “assessment,” a type of tax on providers designed to bring more federal funds into the state’s Medicaid program.

Eagleson said putting the noncitizen recipients in the managed care program wouldn’t necessarily decrease costs, but it would subject the recipients to the assessment via the MCO, thereby increasing revenues.

Winick said the reason the noncitizens were not included in managed care was because the department anticipated the group would be much smaller than it has become.

“Obviously now that we're looking at much higher enrollment numbers, we are considering our options about maybe expediting the rollout of managed care for this population,” he said.

Sen. Chapin Rose, R-Mahomet, pointed out that the money spent on the expansion could have fully funded 20 percent Medicaid base rate expansion for hospitals that has been requested or adequate funding for services provided to individuals with developmental disabilities.

Capitol News Illinois is a nonprofit, nonpartisan news service covering state government. It is distributed to hundreds of print and broadcast outlets statewide. It is funded primarily by the Illinois Press Foundation and the Robert R. McCormick Foundation, along with major contributions from the Illinois Broadcasters Foundation and Southern Illinois Editorial Association.