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Illinois lawmakers have a choice before them. The Patient Protection and Affordable Care Act, or PPACA, permits states to expand their Medicaid programs to those up to 138 percent of the federal poverty level. Under the law, however, Illinois is not required to do so.
Hundreds of thousands of the people targeted by the Medicaid expansion are already entitled to receive federal subsidies to purchase health insurance on the exchange. However, if lawmakers choose to voluntarily expand Medicaid eligibility, those low-income residents lose access to federal subsidies. Instead of being able to get higher quality health insurance at little to no cost to them, these people will be forced into a broken Medicaid program.
The Medicaid program is already in a crisis and patients are unable to find doctors willing to treat them. Overloading the program with more people will only hurt the most vulnerable people already on the rolls.
Illinois is under no obligation to expand Medicaid.
PPACA permits, but does not require, states to expand Medicaid eligibility. To date, few states have signaled intent to expand their Medicaid programs. Instead, governors and lawmakers from both parties have indicated that their states will not opt in to PPACA’s voluntary expansion of Medicaid.
Many low-income residents are already eligible for federal subsidies on the exchange if Illinois does not expand Medicaid.
A large share of the individuals who would become eligible for Medicaid under the PPACA’s voluntary expansion is eligible for federal subsidies to purchase health insurance on the exchange. Given their relatively low incomes, these subsidies will cover all or nearly all of their health insurance premiums.
But low-income residents become ineligible for federal subsidies on the exchange if Illinois expands Medicaid.
Although these low-income residents are eligible for federal health insurance subsidies, they would immediately become ineligible if lawmakers implemented PPACA’s voluntary Medicaid expansion. The law specifically prohibits all individuals who are eligible for Medicaid from receiving subsidies to purchase health insurance on the exchange. In states that do not expand Medicaid eligibility, low-income residents will remain eligible for those subsidies.
The state will not pay for federal insurance subsidies, but will pay for the Medicaid expansion.
The state is not responsible for paying for the health insurance subsidies offered under PPACA. However, if Illinois expands its Medicaid eligibility, state taxpayers will assume responsibility for the cost of providing these individuals with medical care. The state cannot afford to voluntarily pay for an expense the federal government would otherwise pay.
The federal government is already trying to shift more Medicaid expansion costs to the states.
President Barack Obama has already proposed shifting a greater share of the costs for expanding Medicaid onto the states as a major part of his fiscal year 2013 budget. He has also proposed shifting the cost as part of debt ceiling and fiscal cliff negotiations. The House of Representatives has voted numerous times to repeal and defund the Medicaid expansion.
Overloading a broken Medicaid program hurts the most vulnerable.
The Medicaid program is already broken. In Illinois, more than 35 percent of doctors have stopped taking new Medicaid patients altogether. Medicaid patients are denied appointments with specialists nearly two-thirds of the time. When they are able to get care at all, they frequently suffer worse outcomes than both privately insured and uninsured patients. Adding so many more people to the Medicaid program will only make these problems worse.