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Protect Health Care for Illinois Children by Rejecting the American Health Care Act

Written by Mayumi Grigsby

Given the impact it will have on the lives of more than 1.4 million children covered by Medicaid and the Children’s Health Insurance Program (CHIP)[1], members of the state’s congressional delegation need to reject the proposed legislation, to repeal the Affordable Care Act (ACA).Health care

The proposed America Health Care Act (AHCA) that passed the U.S. House and which the U.S. Senate is now considering, would cut federal Medicaid funding by $834 billion over ten years and make other damaging structural changes to the Medicaid program.  Although little is known about the Senate bill to repeal and replace the ACA as of this writing, reports indicate that the emerging bill differs little from the House bill.

These cuts would likely mean curtailment or loss of medical services for Illinois children and their families covered by the program.

Medicaid Populations in Illinois

Medicaid provides health care coverage for Illinois’ most vulnerable groups: low-income children and their families, pregnant women, persons who are disabled, and seniors.

  • More than three million Illinoisans are covered by Medicaid and that includes nearly half of the state’s children are covered by the program.
  • Sixty-one percent of Medicaid enrollees in Illinois are people of color, so changes and funding cuts to the program would have a disproportionate impact on children of color and their families.
  • Medicaid, CHIP, and other public health insurance programs cover nearly half (44%) of children with special health care needs.[2]

Changing the Affordable Care Act’s Medicaid Expansion

Prior to the ACA, Medicaid coverage was limited to low-income parents, children, cash assistance recipients, seniors, and people with disabilities. Medicaid eligibility prior to the Medicaid Expansion was about $8,870 a year for a family of three and childless adults were ineligible. The ACA allowed states to expand their Medicaid program to include all non-elderly non-disabled adults with incomes up to 138 percent of the poverty line. Illinois was one of 31 states (along with the District of Columbia) to do so.

Illinois MedicaidI

Source: Center on Budget and Policy Priorities

The AHCA would fundamentally change how the federal government funds Medicaid.  Currently, the federal government covers 90 percent of the cost of new enrollees under the Medicaid expansion. The AHCA would lower the matching rate for new enrollees qualifying for the expansion coverage.  Starting in 2020, rather than paying 90 percent of the cost of covering these enrollees as it would under current law, the federal government would only pay 50 percent of the cost.  This represents a huge cost shift to states; it is projected that in 2021, Illinois would have to pay an additional $864 million to maintain the Medicaid expansion.  More likely, the state would be forced to cut coverage for the 635,800 Illinoisans in the Medicaid expansion.

Shifting Costs to States

Medicaid enrollment CHIP

Source: Kaiser Family Foundation

The AHCA would further shift Medicaid costs from the federal government to the states by implementing a per capita cap. The federal government now contributes a fixed amount to a state’s Medicaid costs- in Illinois this is about 50 percent of total Medicaid costs. Under a per capita cap, the federal government would only pay up to a fixed amount per beneficiary. The state would then be responsible for additional and unanticipated costs, for example, an opioid crisis or a Zika outbreak. This per capita cap could lead states to cut benefits, cut enrollment, and cut payments to doctors and providers to lessen the state’s Medicaid costs. This could lower payment rates for pediatric providers and thereby threaten health care coverage for children.

The AHCA would also let states choose between a block grant for Medicaid, rather than a per capita cap. The “Flexible Block Grant Option for States” would give states the option to receive a portion of their federal Medicaid funding through a grant.[3] This amendment eliminates requirements that state Medicaid programs cover preventive child health care services for individuals under the age of 21, such as the Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) services. EPSDT services are required, preventative, health and developmental assessments and vision, dental and hearing services, as well as diagnostic and treatment services to improve physical and mental health conditions. Eliminating these requirements would impede all children’s opportunity for a healthy future.

Cuts to Medicaid Funding Would Mean Fewer People are Covered

For some children with special health care needs, access to Medicaid is based on the child’s need and not on the family’s income. This pathway makes it possible for children with special needs to access care while still living at home with family. States use waivers to receive federal matching funds to allow them provide long-term and supportive services to seniors and people with disabilities in their homes and communities. Illinois covers this population of children using a Medicaid home and community-based services waiver called the Medically Fragile/Technology Dependent Children waiver. Cuts proposed in the AHCA could force states to cut back on spending on Medicaid services, putting necessary Medicaid home and community-based services waiver programs at risk.

Special Education

Cuts to federal funding for Medicaid could also threaten funding for special education in schools. The Individuals with Disabilities Education Act (IDEA) ensures access to public education for children with disabilities. Under this law, the education needs of the child are outlined in an individualized education plan (IEP). Medicaid pays for some of these services, which tend to be perpetually underfunded in spite of a federal commitment, for children enrolled in Medicaid.

In 2015, the federal government contributed more than half – $144,391,000 out of $286,388,260 – of Medicaid spending in Illinois schools. These cost-shifting changes to Medicaid and cuts in federal spending proposed in the AHCA would pose a significant burden on Illinois as the state would have to find ways to meet the increased financial burden.

Waiving Pre-Existing Condition Prohibition

Additional harm could come to children and their families due to the AHCA allowing states to:

  • Charge higher premiums for pre-existing coverage if they create “high risk pools”
  • Do away with “essential health benefits” requirements. In Illinois, essential health benefits include pediatric oral and vision coverage and newborn care.  Curtailment of these services could negatively impact important services required to ensure healthy development in children.

Since maternity services were not commonly covered pre-ACA and reports suggest that waivers would be easily attainable by states under the AHCA, these changes could lead states to weaken requirements ensuring coverage for maternity care.

People residing in states modifying the essential health benefits’ requirements would see “substantial increases in out-of-pocket spending on health care” and services likely to be excluded include “maternity care, mental health and substance abuse benefits, rehabilitative and habilitative services, and pediatric dental benefits.”

House GOP Health Bill

Increasing the Number of Uninsured

According to the nonpartisan Congressional Budget Office (CBO), if the AHCA passes, there will be 23 million more uninsured people under age 65 by 2026 than would have been uninsured under the ACA.

Benefits of Medicaid

Studies show children with Medicaid coverage are healthier teenagers. These children perform better academically and are less likely to drop out of high school and more likely to graduate from college. They are also more likely to surpass their families’ economic status and are less reliant on the government. Medicaid expansion also gives coverage for maternal depression, particularly for low-income women and women of color. Maternal depression is known to stymie healthy development in children. Curtailing access to Medicaid and CHIP for children – particularly low income, children of color – denies them access to a better future.

Action is needed now

As of this writing, the state comptroller shows the state has a backlog of bills topping $15 billion. The AHCA would lead the state to lose $40 billion over 10 years and would also shift $24 billion in Medicaid costs over ten years to the state of Illinois.

The AHCA proposes changes that would lead to a loss of coverage for children. The bill would make it particularly difficult for children with special health care needs to continue to access the care they need to remain healthy and succeed in life.

Illinois’ U.S Senators have signaled their opposition to the AHCA.  The Governor, members of the legislature, and citizens across the state need to join them in opposing the measure and fighting for continued and quality health care coverage for Illinois children.


[1] Medicaid covers children age 0 to 6 with family incomes of up to 133% of the federal poverty level (FPL); and for children, age 6 to 19 with family incomes of up to 100% FPL. The Children’s Health Insurance Program (CHIP) is available for children, age 0 to 19, with family incomes too high for Medicaid. (http://southeastgenetics.org/aca/medicaid-chip-infographic.pdf) In Illinois, the program providing coverage for children is called “All Kids.” All Kids includes the state’s Medicaid and State Children’s Health Insurance Program (SCHIP) programs. Coverage is offered to all uninsured children, regardless of income, health status or citizenship. (https://kaiserfamilyfoundation.files.wordpress.com/2013/01/7677.pdf)

[2] http://www.kff.org/medicaid/issue-brief/medicaid-and-children-with-special-health-care-needs/

[3] http://avalere.com/expertise/managed-care/insights/per-capita-caps-could-reduce-funding-for-children-covered-by-medicaid

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