With new federal waiver, Illinois expanding Medicaid to nonmedical services

[August 09, 2024]  By PETER HANCOCK
Capitol News Illinois
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SPRINGFIELD – Many people enrolled in the state’s Medicaid program will soon be eligible to receive a host of nonmedical services that could improve their overall health, including housing and nutrition assistance, violence prevention services, and services to help them transition out of incarceration.

Under a new policy that the Biden administration launched last year, state Medicaid programs can now apply for federal waivers to cover what many people call “social determinants of health” – the conditions in which people live that can have a direct impact on their health care needs.

The federal Centers for Medicare and Medicaid Services approved Illinois’ application for such a waiver July 2. It extends through June 30, 2029, and may be extended beyond that. At the same time, CMS also approved a five-year extension of another waiver originally approved in 2018 that allows coverage of substance use disorder treatment for individuals in mental institutions.

“You've heard the expression, ‘An ounce of prevention is worth a pound of cure.’ Well, that's what this waiver means for Illinoisans all across our state,” Gov. JB Pritzker said at a recent news conference announcing the waiver approval.

“With this extension, we can build on the demonstrated success of programs that meet these needs – housing support, food and nutrition services, employment assistance, community reintegration, while developing and piloting new solutions to ensure that we're meeting the needs of all Illinoisans,” he added.

Medicaid is a publicly funded health insurance program primarily for poor people that is jointly funded by states and the federal government. It was launched in 1965 alongside Medicare, the federally funded health care program for seniors.

For years, the federal government has allowed, and even encouraged, states to innovate with their Medicaid programs by granting them short-term waivers from standard Medicaid rules. This allows them to try out experimental, pilot or demonstration projects designed to better serve the health care needs of the Medicaid population.

The waivers are authorized under Section 1115 of the Social Security Act and thus are known as “1115 waivers.”

New Services

The new waiver adds three new categories of services that will be covered under the Illinois Medicaid program for individuals who qualify. But state officials estimate it will take at least a year to get the new services up and running.

The first and most far-reaching of those covers “health-related social needs,” or HRSN services. That includes such things as housing and food assistance for Medicaid enrollees who either have or are at risk of developing costly chronic health conditions and who have a documented need for such services.

The waiver covers expenses such as first month’s rent, moving expenses and utility hookups, as well as temporary housing before and after hospitalization. It does not, however, cover construction costs for brick-and-mortar projects or services for people who are “not lawfully present in the United States or are undocumented.”

A second new category covers violence prevention and intervention services for Medicaid recipients who either have been victims of violence in the past, are currently experiencing violence, or are at risk of experiencing violence in the future.

Elizabeth Whitehorn, director of the Department of Healthcare and Family Services, said Illinois is the first state in the nation to receive approval for covering violence prevention and intervention under an 1115 waiver.

The waiver allows for reimbursement of a wide range of services for those who qualify, such as psychotherapy, grief counseling, mindfulness and relaxation-based treatments, art therapy, life skills training, and crisis intervention.

Finally, the new waiver authorizes Illinois to provide specific health-related services to incarcerated individuals for 90 days immediately before their expected release. That includes case management to assess their physical, behavioral, and health-related social needs. It also includes ensuring they have a 30-day supply of their prescription medications, along with any medical equipment or supplies they may need immediately upon their release.

As a condition of that waiver, Illinois will be required to provide Medicaid enrollment support for individuals entering a correctional facility, and it will only be allowed to suspend – not terminate – the Medicaid benefits of anyone already enrolled in the program once they enter the institution.

Expanding Medicaid’s mission

In the nearly 60 years since its inception, the Medicaid program in the United States has undergone many changes and grown exponentially. But its core function has always been that of a publicly funded health insurance program, paying the cost of health care services for its members, the bulk of whom are children, young mothers and low-income seniors.

In 2021, according to CMS, Medicaid paid for about 41 percent of all childbirths in the United States. The National Institutes of Health estimates Medicaid pays for the care of about 62 percent of all nursing home residents.

In Illinois, Medicaid covers about 4 million individuals, with a total cost in the current fiscal year of nearly $27 billion, including both state and federal funds.

The new 1115 waivers, however, represent a fundamental change in Medicaid’s core function, moving it beyond the role of paying reimbursements for medical services into the role of funding a broader array of nonmedical social services.

State officials said they do not have an estimate of how much the new services will cost.

But Illinois Medicaid Director Kelly Cunningham said in an interview the new services covered under the waiver are still consistent with Medicaid’s original purpose.

“The heart of the Medicaid program is ensuring equity across the population we serve,” she said. “What we have learned, and what many other states have learned, particularly coming out of the COVID pandemic, is that what individuals need to be successful and healthy isn't just health-related services. They need access – through transportation and through housing support and through food and nutrition – access to those types of services to really help them stay healthy.”

Cunningham said that in crafting the new policies covered under the waiver, IDHFS worked closely with the General Assembly, and specifically its Medicaid working group, an informal group made up of members from both parties and both chambers that meets privately to discuss and develop state health care policy.

State Rep. Robyn Gabel, D-Evanston, a cochair of the working group, said at the news conference in July she fully endorsed the new policy.

“Illinois is taking a truly transformative step in addressing the root causes of health disparities,” she said. “Our health is not only our medical care, but it is the sum of all our experiences, our jobs, our homes. So in caring for some of the most vulnerable populations, we need to account for issues from housing, to food insecurity, to transition from incarceration.”

But Sen. Dave Syverson, R-Cherry Valley, the leading Senate Republican on the working group, questioned during a separate interview whether the state needs to set up new programs within its Medicaid system to provide services that are already being provided through other agencies.

“If programs were the answer, Illinois should have some of the best outcomes in the country,” he said. “Because we have so many programs that deal with each one of those social determinants, whether it's housing, violence prevention. We have so many programs. The issue is, why are we getting the poor results that we're getting with all these hundreds, maybe thousands of programs that we have throughout Illinois.”

Cunningham, however, noted that the federal waiver specifically prohibits the use of Medicaid funds to duplicate existing services.

“What we're trying to do is to offer services to the Medicaid population that will help actually improve their health and improve their outcomes,” she said. “And the services we're offering are really specifically defined – housing tenancy support, helping people learn to be a good tenant, how to search for housing, how to negotiate a lease – those specific services are what we are looking to cover in the Medicaid program.”

Capitol News Illinois is a nonprofit, nonpartisan news service covering state government. It is distributed to hundreds of newspapers, radio and TV stations 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.