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What health reform means for the people of Illinois

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Tuesday, January 25, 2011

Recent "Medicaid Reforms" in Illinois: How Do They Impact State Implementation of the ACA?

The Affordable Care Act (ACA) offers states financial and health care coverage opportunities but also imposes administrative and structural requirements for states to meet in a very short timetable. There is, however, substantial federal money available to modernize state data systems and to create a seamless Medicaid/Health Benefits Exchange system. This task requires careful and thoughtful planning and has the potential to maximize federal funding for health care in Illinois and reduce inefficiencies in Medicaid. Any changes to the Medicaid system now must be considered in that context.

While the state is embarking upon this critical planning process to implement federal health care reform by 2014, the state legislature and the Governor also made a possibly shortsighted decision to impose limits on health care programs in Illinois. The legislature passed the “Medicaid Reform” bill (HB 5420) almost unanimously earlier this year and Governor Quinn signed it on January 25, 2011.

The key provisions of the Medicaid Reform bill that affect health care reform implementation in Illinois are the following:

A moratorium on any expansions to Medicaid program eligibility or coverage until 2013. This means that the legislature would have to amend or repeal this provision in law in order to take advantage of any early implementation of health care reform -- such as a phase in of the childless adult population under 133% FPL or a waiver to offer Medicaid to HIV positive individuals not yet disabled by AIDS -- even if these opportunities would save state general revenue funds.

A cap on enrollment of any new children applying for All Kids health care coverage who have family incomes over 300% FPL (about $66,000 for a family of 4) after 7/1/2011. This provision will deny health care coverage under All Kids to children with pre-existing conditions who currently can buy Medicaid coverage; many of these families have no access to group health insurance, cannot buy private health care coverage and do not fit into the strict requirements of the high risk insurance pools. Children could still spend-down to Medicaid if they have high medical costs.

Termination of children on All Kids who have family incomes over 300% FPL (about $66,000 for a family of 4) after 7/1/2012. This would terminate coverage for over 3,000 children.

Imposition of strict eligibility and income verification processes for all Medicaid applications. These verifications will make it more difficult to prove eligibility for Medicaid and may have a chilling effect on new applications for Medicaid.

A requirement that 50% of the total Medicaid population receive their health care through a capitated care arrangement by 2015.

The Medicaid reforms passed by the state legislature in Illinois move the health care system in the opposite direction that the state needs to be moving towards in 2014 – efficient, streamlined eligibility, coverage and access for all uninsured populations. Over 75% of the uninsured in Illinois are under 400% FPL and will most likely be in Medicaid, a Basic Health Program, or subsidized within the health care exchange. This is precisely the population for whom the state wants to provide continuity of eligibility and coverage moving into 2014. Any interruptions in coverage as a result of caps and reductions in eligibility prior to 2014 only create gaps in continuity of coverage that will have to be mended by 2014.

Stephanie Altman
Programs & Policy Director
Health & Disability Advocates

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