August 1, 2012
In the wake of the U.S. Supreme Court decision on national healthcare reform, Illinois officials plan to seek authorization from the Illinois General Assembly to participate in the expansion of the Medicaid program under the federal Affordable Care Act.
Julie Hamos, Director of the Illinois Department of Healthcare and Family Services, told members of the agency’s Medicaid Advisory Committee at a meeting on July 20, 2012 that legislation authorizing the expansion will be sought during the fall veto session. The veto session is scheduled to begin on November 27.
Legislative approval appears to be required due to a State law that imposes a moratorium on expansion of Medicaid eligibility. The law, enacted in 2011, initially covered a two-year period but was amended in June 2012 to extend the moratorium to four years, ending in January 2015.
The change was included in legislation that exempted Cook County’s public health system from the moratorium. The exemption was needed to allow Cook County to get a head start on federal funding for low-income, childless, non-disabled adults under 65 who will be required to be covered by Medicaid for the first time beginning in January 2014 under the Affordable Care Act.
Medicaid expansions required as a federal condition of state participation in the Medicaid program are also exempted from the Illinois moratorium. However, the Supreme Court in its June 28, 2012 decision ruled that the expansion under national healthcare reform is a state option. Before the ruling, the expansion appeared to be required for states that wanted to continue receiving federal matching funds for their Medicaid programs.
Medicaid is a joint federal-state program that finances healthcare for certain categories of low-income people, including children, pregnant women, the elderly and the disabled. Beginning in January 2014, the federal Affordable Care Act extends Medicaid coverage to all adult citizens with annual incomes up to 133% of the federal poverty level (the effective threshold is actually 138% because 5% of income is disregarded in determining eligibility).
Illinois’ Medicaid program currently has an enrollment of 2.7 million, and roughly 500,000 people are expected to become eligible under the Affordable Care Act. The federal government is scheduled to pay 100% of the cost for the newly eligible population for the first three years of the expansion and at least 90% after that.
In addition to newly eligible recipients, others who were previously eligible but not enrolled are expected to sign up for Medicaid, partly due to publicity surrounding the expansion of coverage. States would be reimbursed for these recipients’ expenses at the regular matching rate, which is currently 50% in Illinois.
Governor Pat Quinn said after the Supreme Court decision that Illinois should participate in the Medicaid expansion. Critics, however, are concerned that the expansion could prove costly if the federal government reduces the reimbursement rate for newly eligible participants or if the program is flooded with previously eligible individuals who had not been enrolled.
State money is not involved in the Cook County expansion because the County, rather than the State, pays the non-federal share of Medicaid expenses for the Cook County Health and Hospitals System. Nevertheless, some critics opposed the Cook County plan at a time when the State was making substantial cuts to its Medicaid program due to budget problems.