Illinois Medicaid expansion enrollment at nearly double original projections

Jonathan Ingram

Director of Research at Foundation for Government Accountability. Lawyer. Libertarian.

September 11, 2015
Illinois’ costs for the ObamaCare Medicaid expansion could be nearly $1.5 billion higher than originally expected as the state has added 633,671 able-bodied adults to the rolls.

Illinois’ ObamaCare expansion is proving to be a costly nightmare. More people have signed up than the state thought would even be eligible, which has led to considerable cost overruns. Gov. Bruce Rauner should look for ways to rein in this expansion before it eclipses other spending priorities.

In January 2014, Illinois extended Medicaid eligibility to a new class of able-bodied adults who previously had not qualified for long-term welfare. Under ObamaCare, the federal government pays 100 percent of the costs of Illinois’ Medicaid expansion for the first three years. But starting in fiscal year 2017 – next year’s budget – the state must start paying more of those costs.

New research reveals that Illinois’ Medicaid expansion costs will be far higher than expected, crowding out resources for other state priorities and compromising programs that help the needy. Illinois’ Medicaid expansion has already far outpaced original predictions. Former Gov. Pat Quinn’s administration estimated just 342,000 able-bodied childless adults would ever sign up for the program. But by April 2015, actual Medicaid expansion enrollment had reached 633,671. The Chicago Tribune reported earlier this year that state costs could be nearly $1.5 billion higher than expected between 2017 and 2020. When Illinois has to start to picking up the tab, where will it find the extra money?

It wouldn’t be unprecedented for politicians to protect able-bodied adults at the expense of the most vulnerable. At the same time politicians were voting to expand Medicaid in Cook County in 2012, they were increasing out-of-pocket payment requirements for families with disabled children. When Arizona’s earlier Medicaid expansion ran billions of dollars over budget, politicians eliminated coverage for life-saving organ transplants. Oregon’s Medicaid program stopped covering certain treatments for patients with advanced-stage cancer.

Illinois’ Medicaid program is already swallowing the rest of the budget. When the money runs out, who will be left to fend for themselves? The state should refocus its Medicaid program on the most vulnerable, ensuring that those who need help receive it and that the state has the resources to continue providing that help. Rauner should begin looking for ways to unwind ObamaCare’s Medicaid expansion before it bankrupts the entire program.

If Rauner succeeds in reversing Quinn’s ObamaCare expansion, it may help boost Illinois’ economic recovery. Peer-reviewed research of previous Medicaid expansions to able-bodied adults shows that expanding Medicaid discourages work, reduces labor-force participation and hurts the economy. Indeed, the independent Congressional Budget Office has confirmed that ObamaCare will lead millions of working-age adults to drop out of the labor force or reduce their work hours, ultimately reducing economic output. In Illinois, more than 100,000 able-bodied adults could leave the labor force entirely, with many more reducing hours of paid employment to avoid becoming disqualified for welfare benefits.

Unwinding ObamaCare’s Medicaid expansion would help prevent some of those effects and could mitigate the damage that has already occurred. And, if the experience of other states is any guide, Illinois could expect to see a sudden increase in able-bodied adults re-entering the work force or increasing their work hours, ultimately moving them away from government dependency and toward the hope of a better future.

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