By David From and Nicole Kaeding -
Now that the U.S. Supreme Court has ruled on the constitutionality of the individual mandate contained in the president's health care law, Illinois residents are asking what can be done to protect the state's residents from the massive federal health care law. Much attention is being focused on Washington and the November election, but a better solution exists much closer to home: Urge Illinois not to expand Medicaid.
The Supreme Court opened up an avenue to protect Illinois residents from the bloated, costly system imposed by President Barack Obama's health care law with the court's 7-2 ruling allowing states to opt out of the Medicaid expansion.
Medicaid, a jointly run state-federal program, is set to expand to cover all individuals below 133 percent of the federal poverty level (approximately $30,000 for a family of four) in 2014. Medicaid is the largest share of states' budgets — greater than K-12 education. In Illinois, Medicaid costs taxpayers nearly $15 billion a year.
Under the new federal law, if a state refused to expand to cover the 17 million newly eligible individuals, the U.S. Department of Health and Human Services could withhold all funding for Medicaid. The court ruled that punishment was so severe that it can't be allowed. States must have a meaningful choice to participate or not, otherwise it's federal coercion that violates our Constitution. As a result, Illinois can now decide to expand or not expand, without risking its federal funding for its existing Medicaid program.
Expanding Medicaid as requested by the federal government would add another 600,000 to this program in Illinois and cost the state an estimated $1.2 billion.
With this in mind, Illinois' best path forward is clear.
The Medicaid system is already broken. Illinois owes almost $2 billion in back payments to doctors and hospitals on top of having some of the lowest payments to providers in the country. Delayed reimbursements and below-market payments actually encourage physicians not to cover Medicaid patients — nationally, 28 percent now refuse to accept new Medicaid patients, leaving many Medicaid recipients with fewer care options.
Adding more individuals to the system will only exacerbate these problems. Well-meaning reforms should protect residents from failed programs, not push more on them.
Even if Illinois wanted to reform its Medicaid system to improve access and facilitate better health outcomes, its hands are tied. Under the Medicaid agreement with the federal government, all functional control stays in Washington. Any change Illinois makes requires a waiver from the Department of Health and Human Services' rules and mandates. Unfortunately, HHS is far too stingy with granting states' requests such as Illinois' common-sense reforms of last year.
In fact, if Illinois' current experience with Medicaid is any indication, the state should also reject another "federal-state partnership" imposed by the new health law: creating a health care exchange.
The Supreme Court's disappointing opinion gives Illinois a clear path forward. By standing up to the federal government, Illinois will protect its residents from cost overruns and a broken medical-delivery system. No matter how well-intentioned, quality health care assistance for our poorest is impossible under this bureaucratic scheme from Washington.