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What health reform means for the people of Illinois

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Wednesday, February 27, 2013

Illinois Should Accept Federal Funds to Fill the Gap in Medicaid

We strongly encourage the General Assembly to accept new federal Medicaid funding that will be made available to Illinois in 2014 to fill a historic gap in the Medicaid program and provide health care coverage for hundreds of thousands of the lowest income uninsured Illinois residents. The measure will strengthen the financial health of our hospitals and other health care providers and boost our local economies as federal funds create jobs.

Medicaid has never covered all low-income individuals. It has always had a gap. Even if you are very poor, you do not qualify for Medicaid unless you are also elderly, disabled, pregnant, parenting or a minor child. Eliminating this gap in Medicaid opens the door for coverage to people with income under $16,000 who are ages 18-65, not officially disabled and not raising a minor child. For example, vital health coverage would be available to young adults just coming out of high school or college and starting their working lives; other young adults experiencing underemployment after a tour in the military (Illinois has 43,000 uninsured veterans); older adults whose children have passed age 18 who are not high earners; and people troubled with mental health and other issues that block their efforts at employment.

The State of Illinois, its localities, and all of the rest of us have been filling this Medicaid gap. We do it through charity care programs, safety net healthcare arrangements funded by property taxes, and state-funded human services programs that could be covered by Medicaid if the individual were eligible. The average U.S. family and their employers pay an extra $1,000 in health insurance premiums each year to compensate for health care for the uninsured. The Kaiser Family Foundation estimates that total uncompensated care in Illinois will decline by approximately $953 million from 2013 - 2022. Townships and General Assistance providers will be relieved from paying for coverage of those who are uninsured and are currently ineligible for Medicaid.

The brunt of the Medicaid gap also falls on those not covered – poor health, premature death, lowered employability and productivity, lost opportunity, medical bankruptcy and more. SB 26 will allow the State of Illinois to use federal funds to close the Medicaid coverage gap, address these health inequities, and begin to address the problem of rising health care costs due to uncompensated care for the uninsured.

The Federal government will provide 100 percent of the cost of filling the Medicaid gap for the first three years ($4.6 billion for the Illinois economy), and 90 percent of the cost after that ($21 billion over the first ten years). This means nearly 20,000 new jobs, which means paychecks being spent in stores and restaurants. The tax revenue resulting from this federal investment in our state’s health care system will more than cover the state’s small financial contribution.

In announcing that she would accept the federal money to fill the Medicaid gap in her state, Arizona’s Governor Jan Brewer simply said, “I did the math”. Seven Republican governors, all at one time vocal opponents of the measure, have now joined this pragmatic and sensible chorus. It is just too obviously in the best interests of their people and their states to reject.

Health care coverage keeps people healthier and reduces overall health system costs. That’s why we, the undersigned organizations – a diverse constituency of consumers, providers, hospitals, local governments, businesses and insurance companies throughout the state – support SB 26 and urge the Illinois General Assembly to pass this bill.


AARP Illinois
Aetna, Inc.
AIDS Foundation of Chicago
Heartland Alliance for Human Needs & Human Rights
Illinois Hospital Association Illinois Maternal and Child Health Coalition
Illinois Primary Health Care Association
Meridian Health Plan of Illinois
Sargent Shriver National Poverty Law Center
SEIU Healthcare Illinois Indiana


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