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Proposed changes to the federal Affordable Care Act (ACA) and Medicaid could result in the reduction or elimination of services for thousands of Illinois residents now covered by Medicaid.
Medicaid provides health coverage to low-income children and their families, pregnant women, persons who are disabled, and seniors. Services covered by Medicaid can include payments for hospital and nursing home care and prescription drugs.
The program, jointly funded by the state and federal government, currently covers 36 percent of Illinois children. In July of 2013, Illinois was one of 23 (now 32) states that opted to expand its Medicaid program under the federal Affordable Care Act (ACA). The ACA expanded eligibility for Medicaid to 138 percent of the poverty line, or, families of three making $26,951.
At the beginning of this year, there were 3.1 million people enrolled in the state’s Medicaid program. Of that amount, approximately 649,000 enrolled under the Affordable Care Act. Illinois now has one-quarter of its population enrolled in the Medicaid program.
While Congress has not yet voted on the proposed legislation, nationally, the Congressional Budget Office has calculated that the proposed changes to the ACA could mean a loss of medical coverage for 14 million people in 2018. The Office estimates that both changes to the tax subsidies that allow citizens to buy coverage and to the Medicaid program could increase the number of uninsured from 14 million to 21 million in 2020, and to 24 million in 2026. It also provides yet another major budget issue for Illinois.
When the ACA became law, the federal government paid 100% of the costs for each new Medicaid enrollee through 2016. The percentage dropped to 95% this year. It is scheduled to phase down to 90% by January 1, 2020. Due to the federal reimbursement for new enrollees, Illinois received more than $3 billion dollars in Fiscal Year 2017. Overall, Illinois spent approximately $12.5 billion in general funds (and related funds) on Medicaid in Fiscal Year 2016.
The proposed bill would make two major changes to Medicaid starting in 2020, each of which likely would reduce coverage in Illinois unless the state chooses to raise the necessary revenue.
First, it would reduce the federal matching rate for new enrollees in Illinois’ Medicaid expansion from 90 percent to Illinois’ regular Medicaid matching rate, just above 51 percent. That means Illinois would have to pay nearly five times as much as under current law for new enrollees. Moreover, because low-income adults move on and off Medicaid over time, CBO estimates that the higher cost would apply to more than two-thirds of expansion enrollees within just two years. 
Second, the bill would cap per-person federal Medicaid funding – not just for the expansion population, but also for children, pregnant women, seniors, and people with disabilities currently covered by Illinois Medicaid. The federal government now matches state Medicaid spending with no dollar limit per enrollee, meaning that federal funding increases based on the actual cost of serving vulnerable populations. Under the House bill, the per-person caps would grow more slowly than projected per-enrollee spending, and so Illinois would face increasing cuts in federal funding over time.
The implications of the federal changes in Illinois would further complicate by the state’s ongoing budget crisis. The state has been operating without a complete budget for 21 months. It has a shortfall of billions of dollars just to meet 2015 service levels and has amassed a backlog of bills totaling more than $12.5 billion. Delayed payments or actual cuts have already led providers to curtail vital human services.
During an Illinois House hearing on the subject, experts testified that the proposed federal Medicaid changes could mean a loss of up to $40 billion for Illinois over a ten-year period. Absent any action by the Illinois General Assembly and the Governor to address the revenue shortfall, vulnerable Illinois residents including low-income children and their families, persons with disabilities and seniors, could see coverage cut and discontinued.
Written by S. Mayumi Grigsby
 As of 3/14/17: https://ledger.illinoiscomptroller.gov/