Dear lawmakers: please don’t pile more Illinoisans into a broken Medicaid system

Although Illinois law currently prohibits the ObamaCare expansion until at least 2015, SB 26 would change the law in order to expand the failed Medicaid program.

Jonathan Ingram
Director of Health Policy and Pension Reform

On Tuesday, the Senate Public Health Committee heard testimony on Senate Bill 26, which would impose ObamaCare’s massive expansion of Medicaid eligibility in Illinois. Although Illinois law currently prohibits the ObamaCare expansion until at least 2015, SB 26 would change the law in order to expand the failed Medicaid program. Here’s what  state law currently says:

Moratorium on eligibility expansions. Beginning on Jan. 25, 2011 – the effective date of Public Act 96-1501 – there shall be a four-year moratorium on the expansion of Medicaid eligibility.

Although proponents of the bill were allowed an hour of testimony, I was given less than one minute to testify in opposition. I wasn’’t able to squeeze in my full remarks in 58 seconds, but here’s what I had planned to say:

Chairman Mulroe and members of the committee, thank you for the opportunity to testify. My name is Jonathan Ingram and I am the director of health policy and pension reform for the Illinois Policy Institute. We are a nonprofit, nonpartisan research organization dedicated to promoting personal freedom and prosperity in Illinois.

The Medicaid expansion proposed by this bill is not right for Illinois.

First, Illinois is under no obligation to expand Medicaid eligibility. Federal law permits, but does not require, states to expand eligibility levels for Medicaid. To date, few states have enacted legislation to implement this expansion. Across the nation, Democratic and Republican state lawmakers are taking a very cautious approach and are not rushing into this decision. I recommend you do the same.

Second, many of the people this bill makes eligible for Medicaid are currently eligible to receive federal subsidies to buy private health insurance. This bill would make those individuals ineligible for federal subsidies, forcing them into Medicaid instead. Many more currently have private coverage, but could be forced to join Medicaid under the exchange’s automatic enrollment procedures.

Third, the federal government has already tried shifting more Medicaid costs to the states. President Barack Obama’s last two budgets have proposed shifting more of these costs to the state, and this shift was part of the debt ceiling and fiscal cliff negotiations.

If they succeed in do that, you may not be able to just walk away. Although this is a voluntary expansion, the federal government could impose a new maintenance of effort requirement on states that choose to expand, just as they did on the voluntary expansions in 2009 and 2010. This would allow the federal government to shift more costs to Illinois, but prohibit the state from reducing eligibility, just as it has been prohibited from doing for the past four years.

Finally, the Medicaid program is on the brink of collapse. The low reimbursement rate and long payment delays in Illinois’ Medicaid program have forced many doctors to stop seeing Medicaid patients altogether.

More than 35 percent of Illinois doctors have stopped taking new Medicaid patients. In fact, the problems are so bad that a federal judge ordered the state to study the issue. That study, recently published in the New England Journal of Medicine, found that Medicaid patients are denied appointments with specialists nearly two-thirds of the time. When they can get care at all, Medicaid patients frequently suffer worse outcomes than privately insured patients and even the uninsured. Adding so many more people to the Medicaid program will only make these problems worse.

For these reasons, I encourage you to refocus your efforts on improving the quality of the current program, rather than simply adding more people to a system that isn’’t working.