Illinois and the ACA’s Medicaid expansion

Key takeaways

Illinois expanded Medicaid in 2014, and more than 600,000 people have gained coverage as a result.
Approved waiver allows Illinois to pilot new mental health and substance abuse treatment approaches.
Illinois Medicaid has expanded coverage for Hepatitis C medication.

Medicaid expansion in Illinois

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Medicaid is an important part of overall health insurance enrollment and coverage in Illinois, with Medicaid and CHIP covering about 20 percent of the state’s 12.5 million residents. About 20 percent of those covered are eligible for Medicaid due to the state’s expansion of Medicaid under the Affordable Care Act (ACA). The Illinois Department of Healthcare and Family Services maintains a running update of total enrollment numbers; as of April 2020, there were 607,408 Illinois residents covered under expanded Medicaid. Enrollment under Medicaid expansion grew quickly in the early years after the eligibility guidelines were expanded, but enrollment was lower in 2020 than it was in 2016 (as of July 2016, Medicaid expansion enrollment stood at about 644,000 people).

Total Medicaid enrollment includes people who are eligible under the ACA’s expansion of Medicaid to low-income adults, as well as people who were already in one of the traditional Medicaid groups (low-income pregnant women, children, parents of minor children, and aged, blind, or disabled residents. Most Illinois Medicaid enrollees are in one of those traditional eligibility groups, although enrollment in those groups has declined while enrollment in expanded Medicaid has grown. The expansion of Medicaid resulted in a net increase of more than 486,000 people in the Medicaid program in the first three years after expansion was implemented, although net enrollment growth had dropped to about 300,000 as of 2018. As of May 2020 (when the impact of job losses due to the COVID pandemic were already starting to be seen), Total Medicaid enrollment in Illinois stood at about 2.96 million people — up from 2.62 million in 2013.

Far more Illinois residents have enrolled in expanded Medicaid than the state expected. Although that means the state is receiving more federal Medicaid funding than projected, it also means Illinois has to pay more than projected, as the state is paying 6 percent of the cost to cover the newly-eligible population in 2018, and that will grow to 10 percent in 2020 and future years. But the state’s uninsured rate has dropped from 12.7 percent in 2013 to 6.8 percent in 2017 (it had been even lower in 2016, at 6.5 percent, but it crept up a little, nationwide, in 2017). And the state has also seen a sharp reduction in the number of emergency room visits by uninsured patients.

Medicaid funding for enhanced mental health care

In September 2016, Illinois officials requested permission from the federal government to use existing Medicaid funds (with no changes to eligibility or funding) to test different approaches to treating Medicaid enrollees who need mental health and/or substance abuse treatment. The state had planned to implement the changes in July 2017, but CMS didn’t approve the waiver proposal until May 2018.

The idea is to focus more on preventive care, supportive housing services, and community-based care, rather than institutional care. The state notes that while 25 percent of Illinois Medicaid enrollees have mental health and/or substance abuse diagnoses, their treatment accounts for 56 percent of the Medicaid program’s total cost.

Under the terms of the approved waiver, Illinois is running ten pilot projects that provide coverage for services that weren’t previously covered by Medicaid, including short-term inpatient substance abuse treatment, services to help people manage withdrawals during substance abuse recovery, home health visits for new babies and for children born to opioid-addicted mothers, and job coaching and transportation services designed to help people obtain and keep employment.

Hepatitis C drug coverage expanded in stages, now available to anyone with the disease

In the past few years, drugs that can cure Hepatitis C have burst onto the medical scene, heralded as miracles. But they can also be a strain on budgets, as the pill initially could cost more than $1,000 per day, and the treatment course lasts 12 weeks. Medicaid programs across the country have been grappled with how to handle the situation, and Illinois announced in September 2016 that they would loosen their guidelines in terms of when Hepatitis C drugs would be covered.

Rather than restricting coverage only to the sickest patients, Illinois Medicaid began to cover Hepatitis C drugs for people with stage 3 and 4 liver scarring, rather than just 4. Advocates cheered the new rules, but cautioned that there was still no coverage for treatment in people with chronic Hepatitis C that hadn’t progressed as far as stage 3 liver scarring, and urged the state to continue to consider the issue.

By 2018, the price of Hepatitis C medications had declined, and a generic version was set to hit the market in early 2019, priced at $24,000 for the full treatment course (as opposed to $90,000 in the early years that the drug was available). And in October 2018, the state eliminated the restrictions on access to Hepatitis C drugs, allowing several thousand Illinois residents to obtain Hepatitis C medication through Medicaid, regardless of the stage of their disease and without having to prove sobriety.

Who is eligible for Medicaid in Illinois?

Federal law specifies mandatory and optional coverage groups for Medicaid. States must cover the mandatory groups to receive federal Medicaid funding, and they qualify for additional funding if they cover optional groups.

The federal government specifies minimum thresholds for eligibility for the various groups, and states can set their requirements at or above the minimum threshold. Illinois has established requirements that are near national averages.

Illinois’ eligibility standards for Medicaid are:

Children ages 0-18 qualify with family income levels up to 142 of the federal poverty level (FPL); the Children’s Health Insurance Program covers children with family income up to 313 percent of FPL
Pregnant women qualify with family income up to 208 percent of FPL
Parents and other adults qualify with family income up to 133 percent of FPL (138 percent with the built-in 5 percent income disregard).

How you can be enrolled in both Medicaid and Medicare – and why it matters.
How do I enroll in Medicaid in Illinois?

You have several options to enroll in Medicaid in Illinois:

Apply online using the Illinois wesbite or Healthcare.gov.
Apply in person and get help from the Department of Human Services (DHS). Find the nearest Family Community Resource Center.
Apply by mail or fax, or apply online or call at 1-800-843-6154 (TTY 1-800-447-6404) and ask DHS to mail you an application. Complete the application and mail or fax it back to the nearest Family Community Resource Center.

Illinois Medicaid history

Medicaid was implemented in the state of Illinois in January 1966.

Individuals covered by Medicaid in Illinois can choose either a fee-for-service plan or a managed care plan. The Illinois DHS site explains these options.

Illinois has been slower than many other states in moving beneficiaries to managed care plans. However, the state did pass a law in 2011 that required expanding managed care to at least half the state’s Medicaid beneficiaries by Jan. 1, 2015. As of 2019, more than 81 percent of Illinois Medicaid enrollees were covered under Medicaid managed care plans.

In June 2014, then-Governor Pat Quinn signed a Medicaid reform bill. The law restored adult dental care and podiatry services, aligns Illinois law with federal law to provide Medicaid coverage to children who have been without private insurance for three months, streamlines hospital and nursing-home reimbursement, and more.

Illinois opted to expand Medicaid eligibility, as allowed by the ACA, in July 2013 for a January 1, 2014 effective date. Making Medicaid available to low-income, non-elderly adults is a key part of the Affordable Care Act’s strategy to reduce the nation’s uninsured rate. However, a Supreme Court ruling made Medicaid expansion optional, and as of mid-2020, there were still 12 states that had not expanded Medicaid (two others, Oklahoma and Missouri, had not yet expanded Medicaid but will do so in 2021, after voters approved Medicaid expansion ballot initiatives in 2020).

The federal government paid 100 percent of the cost for the Medicaid expansion population through 2016. After that, the federal government’s portion gradually decreased, reaching 90 percent by 2020, with Illinois covering the other 10 percent (it will remain at that level after 2020).

At the time Medicaid expansion was approved, Illinois officials estimated that 342,000 Illinois residents would qualify. But according to the Chicago Tribune, about 350,000 new enrollees were approved in just the first several months, by June 2014. And a year later, by June 2015, total enrollments under Medicaid expansion in Illinois had reached 623,000. By August 2016, the total had exceeded 646,000. But enrollment had dropped to 606,670 people as of July 2018, and remained at a very similar level (607,404) as of April 2020. That was still far higher than the state had initially projected, but lower than it had been a few years earlier.

By May 2020, total enrollment in Medicaid and CHIP in Illinois stood at more than 2.9 million, and was 13 percent higher than it had been at the end of 2013. The total CHIP/Medicaid population includes people who were already enrolled in Medicaid pre-2014, people who were eligible but not yet enrolled at that point, and people who gained eligibility as a result of the ACA’s expansion of Medicaid.

Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.

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