Special Report Day 2 | The Affordable Care Act: Uninsured for years, Lafayette Johnson and Gail Knox have heard about the health-care law spearheaded by President Barack Obama. But they didn’t know the 2010 law could give them access to health-insurance coverage through Illinois’ Medicaid program. State officials know that many people in this new population know little to nothing about whether or how they will benefit.
This is the second day of a five-day series where GateHouse Medial Illinois heath care reporter Dean Olsen examines the Affordable Care Act and its expected impact. This series will be posted in its entirety at http://bit.ly/ACAseries. If you have questions about the ACA, email them to email@example.com. Olsen will round up the best questions and publish the answers in the newspaper and online in the coming days.
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SPRINGFIELD -- Uninsured for years, Lafayette Johnson and Gail Knox have heard about the health-care law spearheaded by President Barack Obama. But they didn’t know the 2010 law could give them access to health-insurance coverage through Illinois’ Medicaid program.
“I didn’t really know it would help me,” Johnson, who is single and unemployed, said as he and his friend, Knox, waited to see a doctor at Springfield’s Salvation Army at 530 N. Sixth St.
Both knew they could qualify for Medicaid if they had children at home, or were elderly or disabled. But since neither fits into one of those categories, it was a surprise for them to learn that the federal Affordable Care Act (also known as Obamacare) could give them Medicaid coverage, with no monthly premium, at annual income levels below 138 percent of the federal poverty level, or less than $15,860 for one person and $21,405 for a couple.
“It sure would help me a lot,” said Johnson, 54.
State officials know that many people in this new population know little to nothing about whether or how they will benefit.
“We’ve got a big job over the next six months or so,” Deputy Gov. Cristal Thomas said. “We think there are a lot of people who don’t know what’s happening with the Affordable Care Act.”
An estimated 342,000 low-income Illinoisans — mostly single, childless adults — will be added to 2.7 million people already on Medicaid across the state as a result of expanded eligibility for the program, with the cost almost completely funded by the federal government the first three years.
Almost 6,000 Springfield residents will qualify for the expansion, according to estimates by Chicago-based Health & Disability Advocates.
Another 167,600 people statewide — and an unknown number locally — who already are eligible for Medicaid under current guidelines but haven’t signed up in the past are expected to join the program by 2017.
Many people who are currently eligible are expected to sign up because of the health-care law’s mandate that most people have health insurance or face tax penalties. Others will sign up in response to an outreach campaign publicizing the ACA that is about to be launched in Illinois and across the country, according to Gov. Pat Quinn’s administration.
The Medicaid expansion originally was expected to cover 16 million of the 32 million uninsured people to be served by the ACA nationwide; the other 16 million are expected to buy private insurance through insurance exchanges in Illinois and other states, often with federal assistance to reduce out-of-pocket costs.
The number of additional people likely to join Medicaid nationwide has dropped since last summer, when the U.S. Supreme Court made the expansion optional for individual states. So far, Illinois and 22 other states, along with the District of Columbia, are moving forward with the expansion. Twenty-one states have declined to expand Medicaid, and the debate on whether to participate is ongoing in six states.
The Democratically controlled Illinois General Assembly approved the Medicaid expansion this spring without a single Republican vote and with some Democrats voting “no” in the Illinois House on Senate Bill 26.
Quinn, a Democrat and strong supporter of the ACA, signed the bill into law July 22. Enrollment based on the new eligibility rules is scheduled to begin Oct. 1, and the coverage will start Jan. 1.
Opponents of the expansion in Obama’s home state focused on the potential cost to state government, which already has a multibillion-dollar deficit and takes six to nine months to pay many Medicaid providers.
Opponents also say expanding Medicaid isn’t the best way to cover the uninsured. They say many doctors and dentists have stopped seeing Medicaid patients or are refusing to see new patients.
Supporters of the expansion point out that 100 percent of the estimated cost to cover the newly eligible Medicaid recipients, or a total of $4.6 billion from 2014 through 2016, will be paid by the federal government.
The federal share of the cost for the newly eligible will begin to drop in 2017, when it is reduced by 5 percentage points. But the ACA calls for the federal share of the cost of the newly eligible to remain at 90 percent in 2020 and beyond.
The Illinois legislation says the Medicaid expansion is automatically rescinded if the federal subsidy drops below 90 percent. Opponents say it would be difficult politically for state officials to withdraw coverage for so many people, even if the federal government reneges on its funding commitment.
Supporters say the expansion will generate more than $12 billion in matching funds for the state from 2014 through 2020 while costing the state $573 million.
Lead to lower costs?
Even though health-care providers complain that Medicaid often doesn’t cover the cost of care, many of those same providers support the Medicaid expansion because they say that some reimbursement is better than nothing.
For example, even though the ACA is being funded, in part, by a total of $8.4 billion in Medicare cuts to Illinois hospitals over a 10-year period, the Illinois Hospital Association lobbied hard for the expansion.
IHA spokesman Danny Chun said the expansion will reduce uncompensated care and the practice of “cost-shifting,” in which the rates paid by insured patients are increased to cover the cost of uninsured patients. Low-income patients with Medicaid coverage will be more likely to get preventive care and address problems earlier, when their conditions can be treated less expensively, he said.
“It’s a huge difference for improving the health of people,” Chun said. “It will lead to healthier people, and it could lead to lower health-care costs.”
The liberal-leaning group Families USA estimates that the Medicaid expansion will lead to the creation of 19,800 more Illinois jobs in health care and other parts of the economy, and $2.6 billion in annual increased “economic activity.”
Critics, however, point to the Quinn administration’s own estimates of direct costs to the state.
In addition to the $573 million for covering the newly eligible through 2020, the administration says the state’s cumulative cost for covering the currently eligible who will enroll in Medicaid — known as the “woodwork effect” — will be $2.3 billion through 2020.
That’s because the federal government covers 50 percent, not 90 percent or 100 percent, of the cost of care for the currently eligible.
Quinn administration officials say the woodwork effect will happen regardless of the Medicaid expansion, and they say the expansion is worth it even if the state’s backlog of unpaid bills grows in the short term.
The expected increase in people applying for Medicaid is one of the reasons the Illinois Department of Human Services is hiring 600 more caseworkers statewide to add to the current 1,870 caseworkers, DHS spokeswoman Januari Smith said.
The additional caseworkers will cost the state $13.5 million this fiscal year, but 50 percent to 75 percent of that cost will be reimbursed by the federal government, Smith said.
The divided views that come through in public opinion polls on the ACA are reflected in the legislature.
Rep. Rich Brauer, R-Petersburg, said the Medicaid program in Illinois already is too generous and discourages people from buying private coverage even though many could afford it.
Among the 55 members of the Illinois House who voted against the expansion were eight Democrats, including Rep. Sue Scherer of Decatur, whose legislative district includes some of Springfield’s most impoverished neighborhoods.
Of all the House Democrats and Republicans who voted against the expansion, Scherer’s district has the highest number of uninsured residents who will become eligible for Medicaid, according to an analysis by Health & Disability Advocates. The not-for-profit group says 6,660 residents in Scherer’s district will be newly eligible, representing 52 percent of the district’s uninsured population.
Regardless, Scherer said she doesn’t regret her vote. She doesn’t trust the federal government to keep its promise of paying for no less than 90 percent of the cost of the expansion. She said she is uncomfortable supporting an initiative that may squeeze an already-strapped state budget.
“I feel that it is totally irresponsible to vote for a bill when we don’t know what its final cost will be to the taxpayers,” Scherer said. “The cost of health care keeps going up. This is just too much of a risk.”
Quinn administration officials say the expansion will reduce health-care costs for local organizations such as township governments.
Sangamon County’s Capital Township, for example, spent $182,000 last year in property-tax revenue to pay for prescription drugs and doctor visits for the uninsured. However, Capital Township Supervisor Thomas Cavanaugh said he doesn’t yet know whether the Medicaid expansion will reduce demand for township assistance.
The traditionally conservative Illinois Chamber of Commerce supported the expansion because the option of low-income uninsured employees qualifying for Medicaid will reduce the total federal tax penalties that employers will face under the ACA.
Without the expansion, the Illinois Hospital Association estimates, the state’s employers would have faced annual penalties of $71 million to $106 million.
Take the pressure off
Lafayette Johnson and Gail Knox, 45, said they are interested in the expansion because Medicaid coverage could help them afford medicine, counseling and visits to specialists.
Knox, who also is single and unemployed, has asthma, high blood pressure, depression, anxiety and back problems. She and Johnson were waiting at The Salvation Army to see a doctor supplied by Springfield’s Central Counties Health Centers, which treats homeless and other low-income patients.
Both said Medicaid coverage would help them avoid becoming desperate and seeking care in local hospital emergency rooms. They said coverage also would make them less likely to avoid care out of fear of owing a bill they couldn’t pay.
“It will help people feel more positive about themselves and their health,” Knox said.
Johnson has sleep apnea, but can’t afford a CPAP machine to use at night. He also can’t afford to fill a Lipitor prescription for high cholesterol.
He credited Central Counties’ medical care with saving his life by providing good follow-up care after he was stabbed 11 times in a fight in 2006. The care that the not-for-profit organization provided has cost him a nominal amount of money, but he estimated that he owes $10,000 to a variety of other health-care providers.
Johnson still receives phone calls from upset creditors wanting him to pay up.
“You can’t squeeze blood from a turnip,” he said.
Having at least Medicaid coverage would “take a lot of pressure off of you,” he said.
Dean Olsen can be reached at (217) 788-1543. Follow him at twitter.com/DeanOlsenSJR.