Federal Government Sets 2013 End for Cook County Medicaid Plan

November 29, 2012


House Bill 6253, which would lift the Illinois moratorium on Medicaid expansion for those who will be eligible under national healthcare reform in 2014, has been filed in the Illinois General Assembly. Watch this space for more information about Medicaid expansion under the Affordable Care Act.

Original blog published on November 20, 2012

Federal authorities recently approved Cook County’s plan to sign up low-income adults for Medicaid before Medicaid expansion begins under national healthcare reform in 2014. The County plan was approved on October 26, 2012 and is authorized to continue until December 31, 2013.

The plan’s expiration date, which has not attracted much attention, is significant because of an Illinois law that imposes a moratorium on expansion of Medicaid eligibility until 2015. The law specifically grants an exception for the County plan, known as County Care. But County Care participants could lose Medicaid coverage at the end of 2013 unless the General Assembly lifts the moratorium and allows the State to join the national Medicaid expansion in 2014.

The federal decision to end the County plan in 2013 appears to increase pressure on State lawmakers to lift the moratorium. The ending date was disclosed in a letter dated October 26, 2012 to the Illinois Department of Healthcare and Family Services (HFS) from the Centers for Medicare and Medicaid Services (CMS) of the U.S. Department of Healthcare and Human Services. Illinois officials had asked CMS to extend County Care until the State joined the national expansion, but that request was not approved.

The Illinois moratorium does not cover Medicaid expansions required as a federal condition of state participation in the Medicaid program. However, the U.S. Supreme Court ruled on June 28, 2012 that the Affordable Care Act expansion was a state option. Before the ruling, the expansion appeared to be required for states that wanted to continue to receive federal matching funds for their existing Medicaid programs. As discussed here, HFS officials decided to seek General Assembly approval to lift the moratorium after the Supreme Court decision was issued.

At a meeting of HFS’ Medicaid Advisory Committee on November 16, 2012, HFS Director Julie Hamos said that a bill to permit Illinois’ participation in the Medicaid expansion in 2014 is expected to be introduced soon in the General Assembly. The veto session starts on November 27 and a lame-duck session is expected to occur in early January 2013, before new lawmakers are sworn in on January 9.

Medicaid is a joint federal-state program that finances healthcare for specific categories of low-income people, including children, pregnant women, the elderly and the disabled. The Affordable Care Act extends Medicaid coverage to all adult citizens with annual incomes up to 133% of the federal poverty level (effectively 138% because 5% of income is disregarded in determining eligibility). The federal government is scheduled to pay 100% of the cost for the newly eligible population for the first three years of the program and at least 90% after that.

Despite the large federal role, an effort to lift the State’s moratorium on Medicaid expansion might meet resistance in the General Assembly. In light of the financial problems in Washington, critics have argued that the federal government is unlikely to provide its scheduled share of funding for Medicaid expansion.

State money is not involved in the Cook County expansion because the County, rather than the State, pays the non-federal share of Medicaid expenses for the Cook County Health and Hospitals System. County Care is projected to bring in $99 million in net revenue in the fiscal year ending November 30, 2013, making it a key component of the County’s FY2013 budget.

County Care is expected to cover approximately 115,000 people, including 69,000 who are already patients of the Health System but are treated for free. Under County Care, the federal government would reimburse County expenses at the regular rate of roughly 50%. If Illinois joins the national expansion in 2014, the federal government would cover all expenses for newly eligible Medicaid recipients in Cook County and across the rest of the State through 2016.

If Illinois does not join the national expansion, however, the Health System would not be reimbursed for treating the patients, beginning in 2014. “Cook County will go back to zero,” Director Hamos said at the Medicaid Advisory Committee meeting.