Non-citizen health care costs strain the budget

The state estimates that expanding state-sponsored health care to individuals who are ineligible for Medicaid based on their citizenship status is expected to cost $990 million in the upcoming fiscal year, far exceeding the original cost quoted when the measures became law.

In 2020, Illinois made noncitizens age 65 and older eligible for Medicaid coverage, becoming the first state to do so. The Elderly Immigrant Health Benefits program is open to those whose income is below the federal poverty level.

This is an expense that is borne entirely by the state because people do not qualify for the Medicaid program, which is split roughly 50-50 between the state and the federal government.

The extension was inserted into a late draft of what is known as a budget implementation bill in the pandemic-shortened 2020 session. It was an initiative of the Illinois Latino Legislative Caucus and sponsored in the House by Rep. Delia Ramirez, D-Chicago. which has since moved to the US Congress.

She and other advocates said that providing health care, especially preventive care, to the immigrant population would be cheaper than making them dependent on emergency room visits.

“You can pay taxes, you can do this, you can do that, you can be in this country for 25 years trying to get legal, but you can’t get that basic health care, basic ability to stay alive, covered. If ever before, this pandemic has shown us how critical that is,” Ramirez was quoted as saying in the State Journal-Register at the time.

Ramirez put the cost of the program at $2 million, according to the newspaper.

The source of the original estimate is unclear, although Gov. JB Pritzker’s administration said it did not prepare its own estimate before the program became law because it was a legislatively-driven initiative. Republicans noted at a press conference that it was not thoroughly vetted in committee before being added to the budget.

Actual program costs far exceeded that estimate, and the program exceeded its appropriation in its first month of operation, according to a closed-door presentation by the Illinois Department of Health and Family Services to lawmakers last month.

Care spending for the 65-and-over group was nearly $188 million between March 2022 and February, according to that presentation.

Since the program’s initial passage, lawmakers have expanded it twice, lowering the age limit to 55 in 2021 and 42 a year later. The expanded program is known as Health Benefits for Immigrant Adults.

Anticipatory predictions

With the expansion set to take place in 2021, the Illinois Department of Health and Family Services hired its own consultant to try to get a clearer picture of what it would cost. For the current fiscal year, which ends June 30, the actuarial firm Milliman estimated that the total cost of the program would be about $222 million.

But actual spending for the three age groups was $410 million from March 2022 to February, according to the department.

Milliman’s estimates used data from the American Community Survey and “assume that … enrollees will not cost more than Medicaid enrollees,” the department noted in its presentation. But the Illinois Department of Health and Family Services noted that the program’s actual costs “reflect higher costs to enrollees compared to the traditional Medicaid population due to more untreated chronic conditions and higher hospital costs.”

While the presentation lays out higher-than-expected costs for the program, it also notes that enrollee costs for those age 65 and older are stabilizing as enrollees control chronic conditions. For all groups, initial costs were higher due to the number of long untreated illnesses now receiving care.

Milliman also underestimated enrollment in the immigrant community, a notoriously difficult population to track. Its estimate of 33,500 total enrollment was exceeded by more than 18,000 in the four months to the end of fiscal 2023. The number is expected to rise to nearly 99,000 next fiscal year as enrollment in the 42-54 range continues to grow by about 10% every month.

When the program’s expansion to 42-54-year-olds passed a year ago, Republicans noted in the Senate debate that it was included in a bill that was otherwise agreed upon by bipartisan task force members.

Milliman’s cost estimate of $68 million for the 42-54 age group has been cited in debate, but so far more than $104 million in claims have been paid. That number is expected to grow to $460 million in the next fiscal year for this age group.

Overall, the estimated cost of $990 million for next year represents an increase of $768 million from the erroneous original estimate for the current year. The Pritzker administration said the Illinois Department of Health and Family Services could cover about $300 million of the spending gap within its budget, as proposed by the governor, while the rest would be subject to ongoing budget negotiations.

Another Democratic-sponsored bill that remains in committee would add 19- to 41-year-olds to those covered by the Medicaid-style program. Milliman’s estimate predicts the expansion will cost $280 million, but whether it will make it into the final budget remains to be negotiated.

Republicans are calling for a pause

House Republicans called for a “pause” and “audit” of the existing program at a State House news conference.

“We haven’t seen the full extent of the liability that could be for this program,” Congressman Ryan Spain, R-Peoria, said at the news conference. “And you know, it’s a big country where people move to different areas depending on what benefits might be available to them. So we’re just scratching the surface of what our future unfunded liability could be in this area.

While Republicans have long criticized spending state funds on noncitizens, Democratic supporters of the proposals note that people pay sales, income and other taxes as Illinois residents even if they are not U.S. citizens.

The GOP said funding for the program could be redirected to other “drastically underfunded” programs and agencies, such as the Department of Children and Family Services, and to reduce waiting lists for people most in need of significant government care.

“$990 million could be used to support developmentally disabled services … to address significant workforce shortages in our nursing homes across the state,” said Congresswoman Noreen Hammond, R-Macomb.

Sen. Omar Aquino, a Latino member of the group and chairman of the Senate Democratic Caucus, responded to GOP criticism by saying the higher-than-expected enrollment in the program “only reflects a great need for health care options in underserved communities.” service”.

“As usual, some lawmakers on the other side of the aisle treated the needs of large communities as cold-blooded unfinished statistics to score political points,” Aquino said in a statement.

The Pritzker administration noted that higher-than-expected spending was just another variable in budget negotiations and touted its fiscal track record of building credit, long-term savings and debt retirement.

“To be clear, the only lawmakers with a proven track record of balancing the budget and improving state finances are Governor Pritzker and the Democratic supermajority in the General Assembly,” Pritzker spokesman Jordan Abudaye said in a statement. “The governor just proposed another balanced budget that invests in education, health care and communities.”

Another cost pressure

Along with the cost pressures outlined by Hammond, providers at community facilities serving people with developmental disabilities are seeking funding increases beyond what Pritzker proposed, municipalities are seeking a roughly $250 million increase in state aid for the upcoming fiscal year, and some lawmakers advocate for a permanent child tax credit.

Various Republicans have called for reducing or eliminating the estate tax, creating a child care tax credit, making the sales tax exemption for groceries permanent, exempting prescription drugs and medical devices from the state sales tax, doubling the exemption from income tax on the elderly and paying energy rebates to lower utility customers.

The long list of funding requests comes amid rising government revenues. The nonpartisan Legislature’s Government Estimates and Accountability Committee in early March raised its revenue forecast for the upcoming fiscal year to about $465 above what the governor projected.

But March saw the first annual decline in revenue for any month in the current fiscal year, and a recent commission report forecast a slowdown in revenue growth over the next three years amid increased pressure on spending. However, April is the most important month for revenue projections as Illinoisans file their taxes and the scope of available funding becomes clearer. The April earnings update is expected in early May.

Pritzker’s office did not rule out any new spending measures or further expansion of health care for noncitizens, but said the governor and lawmakers “will continue on a proven track record of working together to ensure that government spending does not exceed revenue.”

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