Nearly $1 billion in planned healthcare spending for non-citizens adds to state budget pressures

Nearly $1 billion in planned healthcare spending for non-citizens adds to state budget pressures

The state estimates that an expansion of state-sponsored health care to people who are ineligible for Medicaid because of their citizenship status is expected to cost $990 million in the next fiscal year, far exceeding the price. initial quoted when the measures became law.

In 2020, Illinois made noncitizens age 65 and older eligible for Medicaid-like coverage, becoming the first state to do so. The Health Benefits for Immigrant Seniors program is open to people whose income is below the federal poverty level.

This is a cost borne entirely by the state because individuals are not eligible for the Medicaid program which is split roughly 50-50 between the state and the federal government.

The expansion was slotted into a late draft of what is known as the budget implementation bill in the pandemic-shortened 2020 session. It was an initiative of the Illinois Latino Legislative Caucus and sponsored in the House by Rep. Delia Ramirez, D-Chicago, who has since joined the U.S. Congress.

She and other advocates have said providing health care, especially preventive care, to immigrant populations would be cheaper than making them dependent on emergency room visits.

“You can pay taxes, you can do this, you can do that, you can be in this country for 25 years trying to legalize, but you can’t get that basic healthcare, the basic ability to stay alive, covered. If ever before, this pandemic has shown us how critical that is,” Ramirez said in the Springfield State Journal-Register at the time.

Ramirez pegged the cost of the program for fiscal year 2021 at $2 million, according to the newspaper.

The source of the initial estimate is unclear, although Governor JB Pritzker’s administration has said it did not prepare its own estimate before the program became law because it was an initiative led by the legislator. Republicans noted at a press conference on Thursday that it had not been carefully considered in committee before being added to the budget.

The actual cost of the program far exceeded that estimate, and the program exceeded its appropriation for fiscal year 2021 in the first month of implementation, according to a closed presentation from the Department of Health and Family Services. Illinois to lawmakers last month.

The cost of care for those 65 and older was nearly $188 million between March 2022 and February 2023, according to this presentation.

Since the program was originally passed, lawmakers have expanded it twice, lowering the age limit to 55 in 2021 and 42 a year later. The expanded program is known as Health Benefits for Immigrant Adults.

Exceed estimates

As the expansion was due to be implemented in 2021, IDHFS brought in its own consultant to try to get a clearer idea of ​​what it would cost. For the current fiscal year ending June 30, the actuarial firm Milliman estimated that the total costs of the program would be around $222 million.

But the actual cost for all three age groups was $410 million from March 2022 to February 2023, according to the department.

Milliman’s estimates used data from the American Community Survey and “assumed enrollees would cost no more than enrollees for Medicaid,” the department noted in its presentation. But the IDHFS noted that actual program expenditures “reflect higher enrollment costs than the traditional Medicaid population due to more untreated chronic conditions and higher hospital costs.”

Although the presentation exposed higher than expected costs for the program, it also noted that the costs per enrollee for those aged 65 and over are stabilizing because enrollees have chronic conditions under control. For all groups, initial costs were higher due to the number of long-untreated conditions now receiving care.

Milliman also underestimated the number of enrollees in the immigrant community, a notoriously difficult population to track. Its estimate of 33,500 total enrollees has been exceeded by more than 18,000 four months into fiscal 2023. The number is expected to reach nearly 99,000 in the next fiscal year as enrollees in the 42-54 bracket continue to decline. increase by about 10% each. month.

When the program’s expansion to the population ages 42 to 54 passed a year ago, Republicans noted during a Senate debate that it was added to a bill that had otherwise was accepted by members of the working group from both parties.

Milliman’s cost estimate of $68 million for the 42-54 age group was cited in the ground debate, but so far more than $104 million in claims have been paid. This number is expected to reach 460 million in the next fiscal year for this age group.

In total, the estimated price of $990 million for the coming year represents an increase of $768 million from the erroneous initial estimate for the current year. The Pritzker administration said IDHFS could cover about $300 million of the cost difference in its budget, as proposed by the governor, while the rest would be subject to ongoing budget negotiations.

Another Democratic-sponsored bill that remains in committee would add ages 19 to 41 to those covered by the Medicaid-style program. Milliman’s estimate called for the expansion to cost $280 million, but whether that will end up in the final budget remains to be negotiated.

Republicans call for a break

House Republicans called for a “pause” and “audit” of the existing program at a Statehouse press conference on Thursday.

“We haven’t seen the full extent of what the liability of this program could be,” Rep. Ryan Spain, R-Peoria, said at the press conference. “And you know, it’s a big country where people move to different regions based on the benefits that may be available to them. So we’re only scratching the surface of what our future unfunded liability might be in this domain.

While Republicans have long criticized spending public funds on noncitizens, Democratic supporters of the proposals note that individuals pay sales, income and other taxes as residents of Illinois, even if they are not US citizens.

The House GOP said Thursday that funding for the program could be reallocated to other “significantly underfunded” programs and agencies, such as the Department of Children and Family Services and to reduce wait lists. for those most in need of extensive public care.

“The $990 million could be used to support developmental services…to address significant labor shortages in our nursing homes across the state,” Rep. Norine Hammond said. , R-Macomb.

Senator Omar Aquino, a member of the Latino Caucus and chairman of the Democratic Caucus in the Senate, responded to GOP criticism by saying that the higher-than-expected enrollment in the program “only reflects a great need for health care options. in underserved communities”.

“As usual, some lawmakers across the aisle treated the needs of large communities like cold-hearted unfinished statistics to score political points,” Aquino said in a statement.

The Pritzker administration noted that higher-than-expected costs were just another variable in budget negotiations, and it affirmed its fiscal record of improving credit, long-term savings, and debt repayment. the debt.

“To be clear, the only legislators with a track record of balancing budgets and improving state finances are Governor Pritzker and the Democratic supermajority in the General Assembly,” the spokesperson said. Pritzker, Jordan Abudayyeh, in a statement. “The governor has just delivered another balanced budget that invests in education, health care and communities.”

Other spending pressures

Along with the spending pressures described by Hammond on Thursday, providers at community facilities serving people with developmental disabilities are asking for increased funding beyond what Pritzker has proposed, municipalities are asking for an increase of about $250 million. state aid for the coming fiscal year, and some lawmakers are advocating for a permanent child tax credit.

Various Republicans have called for reducing or eliminating the estate tax, creating a child care tax credit, making permanent a sales tax exemption for groceries, exempting prescription drugs and medical devices from state sales tax, double the senior income tax exemption, and pay energy rebates. to downstate utility customers.

The long list of funding requests comes against a backdrop of rising state revenues. In early March, the nonpartisan Legislative Commission on Government Estimates and Accountability raised its revenue forecast for the coming fiscal year to about $465 above what the governor had expected.

But March saw the first year-over-year decline in revenue of any month in the current fiscal year, and a recent commission report forecast slow revenue growth over the next three years in due to increased spending pressures. April, however, is the most important month for revenue projections as Illinoisans file their taxes and the scope of available funding becomes clearer. The April earnings update is scheduled for early May.

Pritzker’s office did not rule out new spending measures or further expansion of health care to noncitizens, but said the governor and lawmakers “will continue on the proven path of working together to ensure that spending of the State do not exceed income”.

Capitol News Illinois is a nonprofit, nonpartisan news service covering state government. It is distributed to hundreds of newspapers, radio and television stations throughout the state. It is funded primarily by the Illinois Press Foundation and the Robert R. McCormick Foundation, with major contributions from the Illinois Broadcasters Foundation and the Southern Illinois Editorial Association.

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