Audit Finds Illinois All Kids Program Riddled With Problems

Published December 13, 2012

An audit of an Illinois children’s health insurance program which has struggled to meet its budget goals found the program spent thousands of dollars on people who were not eligible and didn’t investigate why children received multiple pairs of eyeglasses in a year.

The audit focused on the expanded All Kids program, which provides low-premium health insurance for children who were not previously covered by KidCare, the state’s original Medicaid program. The program, which is not eligible for federal reimbursement, cost the state $85.7 million in 2011, an increase of $11.3 million from the prior year.

It all adds up to something the state can’t afford, according to state Sen. Dale Righter, R-Mattoon.

“Since instituted by former Gov. Rod Blagojevich and the General Assembly Democrats in 2005, the program has been riddled with not just bad policy, but with very poor management. There have been more than a few audits from the auditor general demonstrating that,” said Righter. “This program has a history of wasting taxpayer dollars, and so I wouldn’t be shocked if there are problems.”

Massive Mismanagement

As of fiscal 2011, the year addressed in Wednesday’s audit, more than 97,000 children were enrolled in the expanded All Kids program. Total claims paid that year were $96.6 million, and the state received about $10.8 million in premiums. The whole All Kids program has 1.9 million enrollees, for whom the state paid $3.2 billion in claims. The expansion includes children whose family income is greater than 200 percent of the federal poverty level or who were undocumented immigrants.

The audit found a total of 414 people received medical services at a cost of more than $126,000 after their 19th birthday, when they were no longer eligible for coverage. It found a total of 315 people enrolled with more than one identification number. And since All Kids incorrectly categorized 11,130 recipients as “undocumented,” even though they had Social Security numbers on file, Illinois received no federal matching funds for those individuals.

Optical providers billed for multiple eyeglass frames and fittings for the same recipient during the year. One provider billed 180 frames and 186 fittings for 41 recipients. The audited noted that this is a repeated problem.

Covering Fewer Kids at Higher Costs

All Kids is another government program that spends scarce taxpayer dollars and fails to meet expectations, said Jonathan Ingram, director of health care policy and pension reform for the Illinois Policy Institute.

Ingram said when All Kids was implemented in 2006 it was projected to enroll 204,000 children by 2011, and the predicted cost of the program by 2011 was to be $471 per child. However, the program’s expansion provided coverage to 37 percent fewer children and at double the per-enrollee cost. And it has failed to stop the growth in the number of uninsured children in Illinois, Ingram said. Between 2007 and 2009, the number of uninsured children in Illinois increased by more than 64,000, he noted.

“Although the intent of the program was to provide all children with access to health care, it simply trapped thousands of children in a Medicaid program so broken that it’s difficult for patients to access care,” he said.

“If lawmakers wanted to enact policy that actually would increase insurance coverage for children, government would reduce the mandates that make it more difficult for patients to afford insurance,”  he added.

Repeated Failings of Program

Righter says the program has chronic problems.

“It’s one thing for someone to run a program and maybe not do the best job right out of the gate [and] have someone like the auditor general come in and say, ‘Here are the problem areas, now fix them,'” he said. “What’s so disappointing to me and my colleagues and the people who pay the bills in this state is that you have the audit findings and then you have another audit that says the same thing and then another audit that says the same thing.

“At some point, the problems need to be fixed, and I think that’s something this administration has really struggled with the last several years,” Righter said.

Jayette Bolinski ([email protected]) writes for Illinois Watchdog.