Editor's Note: This is the latest installment in the Deadbeat Illinois series, where reporters from GateHouse Illinois newsrooms examine the real-world effects of the state's failure to pay its bills. Each Monday, we'll share the stories of those affected. See more on the Deadbeat Illinois Facebook page.
The federal government would fully fund the first three years of a proposed expansion of Medicaid eligibility in Illinois, but critics say related costs not covered by the feds could result in the state taking even longer to pay its bills.
“Before you go expanding and taking on additional liability, you need to make sure that the people who are already on the rolls are taken care of, and that’s not what’s happening,” said Pat Comstock, executive director of the Health Care Council of Illinois.
The council, which represents for-profit nursing homes, doesn’t deny that expanding Medicaid as part of the federal Affordable Care Act would help many of Illinois’ 1.7 million uninsured residents gain coverage.
But Comstock said nursing homes, which serve about 60,000 Illinoisans on Medicaid, already are owed $400 million for bills that are an average of six months late. And she noted that Gov. Pat Quinn’s administration is about $500 million short of achieving the $1.6 billion in annual Medicaid cuts and related savings envisioned in legislation passed last year.
“Less than 12 months later, we’re talking about expanding the program?” Comstock asked. “That doesn’t make sense to us.”
Regardless, there is widespread expectation in Illinois — President Barack Obama’s home state, where Democrats control the House and Senate — that a key plank in the president’s signature legislative achievement will be approved by the legislature this spring so the Medicaid expansion can take effect Jan. 1.
Legislation is pending in the House after the Senate approved the expansion Feb. 28, with no Republican votes.
Quinn, a Chicago Democrat, says he supports the Medicaid expansion, which would make all adults eligible, regardless of whether they have children in their household, up to 138 percent of the federal poverty level, or $15,415 a year for an individual and $31,800 for a family of four.
The expansion, which the U.S. Supreme Court last summer made voluntary rather than mandatory for states, is expected to add about 342,000 more people to the 2.7 million Illinoisans already in the Medicaid program by 2017.
Illinois is expected to receive a total of almost $5 billion in federal dollars to cover all of the new enrollees’ care in 2014, 2015 and 2016, and a total of more than $12 billion in new federal funds through 2020 as part of the expanded eligibility.
Page 2 of 3 - From 2017 through 2020, when the federal share incrementally drops to 90 percent, the state’s cost is estimated to total $573 million.
But that estimate doesn’t include the “woodwork effect,” the phenomenon expected to occur as publicity about the health-care law and its mandate that most people obtain health insurance prompts many to apply who would have qualified for Medicaid under current guidelines.
The state will receive only the standard 50 percent federal reimbursement for these new enrollees, estimated to number 171,000 and cost the state $200 million in 2014 and a total of $2.3 billion through 2020.
Some critics of the expansion argue that there would be less of a “woodwork effect” if the state opted not to expand Medicaid eligibility. Quinn officials disagree.
“It’s going to happen regardless,” said Mike Koetting, deputy director of the Illinois Department of Healthcare and Family Services.
Sen. Heather Steans, D-Chicago, a sponsor of the expansion legislation, Senate Bill 26, said the influx of so much new federal money could actually reduce payment delays by improving the state’s cash-flow situation.
However, she acknowledged the woodwork effect could increase delays if the economy doesn’t improve
significantly and boost the state’s revenues.
Legislation enacted last year could reduce payment delays in the future by restricting the amount of Medicaid bills from one fiscal year that can be paid out of appropriations for future fiscal years, Steans said.
That limit, which could be exceeded if the General Assembly passes another law, will put more pressure on state government to live within its means, she said.
Critics also worry what would happen to the state’s finances if the federal government didn’t fulfill its promise to pay for most of the expansion. Supporters respond that the state would be able to rescind the expansion, though critics say that would be an unpopular move politically.
Kelly Jakubek, spokeswoman for Healthcare and Family Services, said in an email that the Quinn administration expects the expansion to initially have “only a minimal impact on the unpaid bill backlog.” She didn’t elaborate on the longer-term impact.
The state’s overall backlog of late bills totals $7.6 billion, with late payments to Medicaid providers representing $1.7 billion of that total, according to Comptroller Judy Baar Topinka’s office. But a spokesman for the Republican’s office said those totals are low because of recent state income-tax payments and are expected to rise later in the year so that late payments total $9 billion overall and $2.5 billion for Medicaid.
Hospitals feel the pinch from late payments. But the Illinois Hospital Association supports the Medicaid expansion. IHA spokesman Danny Chun said the expansion would help the state’s hospitals, most of them not-for-profit, afford to care for uninsured patients whose bills now are often discounted or forgiven through charity-care programs, or written off as bad debt.
Page 3 of 3 - Advocates of expansion say the new federal money would have a ripple effect on hospitals and other health-care employers, leading to the creation of 19,800 jobs in 2016, more consumer spending and more tax revenues.
Dean Olsen can be reached at (217) 788-1543. Follow him at twitter.com/DeanOlsenSJR.