Medicaid expansion could end early in Illinois under Senate Obamacare replacement bill

June 23--Many low-income adults across the nation could lose Medicaid expansion coverage under the Senate's Obamacare replacement bill -- but in Illinois those losses could come three years earlier because of a state law.

About 650,000 Illinois residents could lose their Medicaid expansion coverage in 2021, if the Senate bill becomes law and a state statute, meant to keep Illinois' Medicaid expenses in check, remains in place.

The Senate health care bill unveiled Thursday would, over time, wind down the amount of federal dollars given to states to pay for Medicaid expansion, a program that has provided coverage to low-income adults who didn't previously qualify.

Currently the federal government pays states for 95 percent of the costs of Medicaid expansion. The Senate bill would reduce those payments by 5 percentage points each year, starting in 2020. Then in 2024, the federal government would dramatically cut funding for Medicaid expansion, leaving some states picking up about half the cost.

Illinois, however, would face a more immediate deadline than 2024.. Under state law, Illinois must end its participation in Medicaid expansion if federal funding for the program dips below 90 percent. In the Senate bill, that's slated to happen in 2021.

Illinois lawmakers put the requirement in place when they passed legislation in 2013 to take part in Medicaid expansion, which is optional for states.

Illinois is one of eight states with such "trigger" laws." States passed them out of concern that the federal government would eventually pull back funding for expansion, leaving states holding the bag, said Jesse Cross-Call, a senior health policy analyst at the Center on Budget and Policy Priorities, which opposes the Senate bill.

The possibility that Illinois might have to end Medicaid expansion in 2021 worries many Illinois medical providers.

"Medicaid expansion is absolutely one of the best things that's happened to the Medicaid program in Illinois," said Roberta Rakove, senior vice president for strategy and external affairs for Sinai Health Systemwhich operates Mount Sinai and Holy Cross hospitals. "We're opposed to ending the program at all, but (2021) is really just around the corner, and to have to deal with the end of the expansion that quickly, if we couldn't change the legislation, would be very serious."

Rakove said Sinai Health System has seen its rate of uninsured patients decrease by about half since Medicaid expansion went into effect.

A.J. Wilhelmi, president and CEO of the Illinois Health and Hospital Association, said an end to Medicaid expansion in 2021 would be "devastating" to patients and a blow to the state's hospitals, many of which are already operating in the red or on slim margins.

If the Senate bill passes, Wilhelmi said the hospital association will urge state lawmakers to re-examine Illinois' trigger law.

Others, however, say if Illinois lawmakers erased the trigger law, the state could be on the hook for a growing share of Medicaid expansion costs that it can't afford. In the first six months of this year alone, Illinois is spending an estimated $61.8 million for its 5 percent share of Medicaid expansion costs, according to the Illinois Department of Healthcare and Family Services.

Plus, critics of Medicaid expansion have long contended that it draws dollars away from those who most need them in favor of expanding coverage to able-bodied adults who should be able to work, securing health insurance on their own or through an employer.

The Senate bill also would allow low-income people, who might have previously qualified for Medicaid expansion, to get subsidies to help pay health insurance premiums.

If Illinois lawmakers allow expansion to continue, it will jeopardize funding for things like education, public safety and services for children with developmental disabilities, said Jonathan Ingram, a senior fellow with the conservative Illinois Policy Institute.

"Medicaid is already crowding out funding for all other priorities," Ingram said in an email. "Continuing the expansion will only make that problem worse."

lschencker@chicagotribune.com

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