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Overloaded One in Three Illinoisans on Medicaid by 2019?

Overloaded One in Three Illinoisans on Medicaid by 2019?

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Published by: Illinois Policy Institute on Oct 20, 2011
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10/20/2011

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 The Patient Protection and Affordable Care Act, commonly known as ObamaCare, willhave a profound impact on Illinois’ Medic-aid patients. It will make the program moreexpensive and worsen care for those who needit most by adding more people to a failing program. The only questions, then, are: How much worse will it get? How long will Medic-aid patients wait to see doctors, if they can seethem at all? How many more tax hikes will theGeneral Assembly have to pass to pay for it?ObamaCare expands the Medicaid programin two major ways. First, it expands eligibility to anyone earning at or below 138 percent of the federal poverty level.
1, 2
Today, a family of four would qualify by earning $30,843 or less.
3
 By 2014, the income threshold will likely be$33,037 for a family of four.
4
Second, ObamaCare expands the programthrough increased participation among people who are eligible. The biggest factor affecting Medicaid enrollment is the participation rate. The participation rate, sometimes referred to asthe “uptake rate,” is the percentage of eligiblepeople who actually enroll in Medicaid. Thisrate generally varies by state, income, gender,age and whether the individual has any otherinsurance coverage.ObamaCare primarily increases the participa-tion rate by two intertwined means. It requireseach state to create a health insurance exchangefor consumers.
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These exchanges are portalsthat consumers may use to select health insur-ance plans. ObamaCare encourages people touse the exchanges by offering subsidies forhealth insurance premiums.
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If an individualusing the exchange is eligible for Medicaid, he will be enrolled automatically without having tosubmit additional paperwork.
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 ObamaCare also requires that every individualmaintains certain specied levels of healthinsurance coverage.
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If an individual does notmaintain that coverage, he or she is subject toa penalty. By mandating that people maintainhealth insurance, it ensures more people willseek coverage. Many of these people will usethe exchanges, given the generous subsidiesoffered there. Because they automatically willbe enrolled in Medicaid if eligible, the participa-tion rate is likely to sharply increase.
Quantifying the Costs
How much ObamaCare will cost Illinois willdepend greatly on the number and makeup of people who enroll in Medicaid under Obam-aCare. The new enrollees will generally comefrom two groups: “new eligibles” and “old eli-gibles.” New eligibles are people who were noteligible for Medicaid previously and becomeeligible under ObamaCare’s new guidelines. Oldeligibles are people who were eligible for Med-icaid before ObamaCare, but had not enrolled. The individual mandate and health insuranceexchanges are expected to increase the partici-pation rates for both groups. The federal government reimburses at differ-ent rates for these two groups, however, so thenumber of each group greatly affects the totalcost to the state. For the rst three years of ObamaCare, the federal government will pay all of the medical costs of new eligibles. After2016, Illinois will begin paying a greater share
 Jonathan Ingram
is a Health Care Policy Analyst with the Illinois Policy Institute.
Overloaded
One in three Illinoisans on Medicaid by 2019? 
   H  e  a   l  t   h   C  a  r  e
   B  r   i  e   f  
   O  c  t  o   b  e  r   2   0 ,   2   0   1   1
 
Page 2 of 14
for new eligibles. However, the federal govern-ment will only pay half of the medical costsof old eligibles. In order to get a clear pictureof future state spending, then, studies mustanalyze the full impact of ObamaCare on oldeligibles.Four major studies have attempted to quantify ObamaCare’s impact on the Medicaid system. This paper reviews these studies and presentstheir ndings and methodologies. Each of thestudies may be underestimating the full impactof ObamaCare that Illinois could soon see.Ultimately, of the four studies, the projectionsmade by the Cato Institute are more transpar-ent, methodologically sound and provide aclearer overall view of the whole Medicaidprogram under ObamaCare.
A Failing System
Medicaid failed to serve America’s neediestcitizens even before ObamaCare. The govern-ment’s low reimbursement rates and long delaysin paying providers have forced many doctorsto make Medicaid patients wait longer for care,if they agree to see these patients at all.Medicaid patients are six times more likely thanprivately insured patients to be denied an ap-pointment. Even when doctors don’t turn themaway, they have to wait 22 days longer.
9
In fact,the payment delays have become so long that
If and whe Medicaid  patients receive care, they  frequently suffer worse outcomes than both  privately insured and uninsured  patients.
doctors are now more willing to see a patient with no insurance than a one with Medicaid.
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If and when Medicaid patients receive care,they frequently suffer worse outcomes thanboth privately insured and uninsured patients. They experience more surgical complica-tions.
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They are at greater risk of mortality during common surgeries.
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They are morelikely to not be diagnosed until the later, lesstreatable stages of diseases.
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These prob-lems plague the Medicaid system and they’reonly going to get worse.Longer payment delays will shrink accessto care even further. The Illinois Comptrol-ler projects that the state’s scal crisis willcontinue to cause longer delays for doctorsreceiving Medicaid reimbursement,
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forcing even more doctors to turn Medicaid patientsaway. The Medicaid payment cycle for thenext scal year is already expected to increaseto 162 days.
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This is more than six times lon-ger than the 2010 cycle and more than twiceas long the previous record delay.If this weren’t bad enough, Illinois is expect-ed to see a shortage of doctors, particularly in rural areas. Half of recent graduates fromIllinois medical schools are eeing the state.
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 Even before ObamaCare, Illinois was facing doctor shortages, caused by the increaseddemand of an aging population. These short-
 Increase in MedicaidEnrollment (2019)Increase in MedicaidSpending (2014-2019)
Urban Institute HigherParticipation Model631,024$1.2 billionUrban Institute LowerParticipation Model911,830$2.5 billionRAND Corporation790,000
1
$5.0 billion
1
Wakely Consulting Group357,898
2
$1.9 billion
2, 3
Cato Institute1,537,000$10.1 billion
Graphic 1. Increases in Illinois’ Medicaid Enrollmentand State Spending Caused by ObamaCare
 All estimates are increases over projected increases without ObamaCare. Tables with the full data for enrollment and expenditures can be found in the Appendix.1. RAND Corporation projections reect changes in nonelderly population only.2. Wakely Consulting only projected enrollment and spending until 2014. The numbers here reect the author’sfuture projections based upon Wakely calculation methods.3. Wakely Consulting spending projection reects changes in nonelderly population only.
 
Page 3 of 14
ages are expected to rise more rapidly underObamaCare.
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Medicaid was created as a temporary safety net for America’s most vulnerable population.In 2000, Illinois’ Medicaid program served 12percent of the population. It will serve morethan a third of the population in just the rstfew years of ObamaCare, with that numbergrowing over time. Medicaid was never meantas a general insurance plan for working andmiddle class families, but that is exactly whatObamaCare attempts to create. It adds morepeople to an already failing system, with highercosts, lower access, and worse outcomes. Theimportant questions, then, are: How muchmore money will it spend, and how many morepeople will it force into substandard care?
In 2000,Illinois’  Medicaid  program served 12  percent of th population.It will serve more than a third of th population in  just the rst  few years of ObamaCare,with that number  growing over time.

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