Illinois Hoped to Save Big, But Might Save Nothing in Medicaid

Published August 7, 2013

Illinois had hoped to shave hundreds of millions of dollars from its budget by paring the Medicaid rolls before next year’s Obamacare-fueled expansion, but with the high cost of the consulting firm conducting the Medicaid study and less-than-spectacular results, it’s not clear the state will save any money.

In the first seven months of 2013, the private company hired to “scrub” the rolls has found that about one in three persons enrolled in the government health care program shouldn’t be.

Put another way, for every person booted from Medicaid, Illinois keeps two people in the expensive program, with hundreds of thousands more likely to be added in 2014.

‘Unlikely to be Financial Windfall’

“Although the Medicaid rolls needed housekeeping, this project is unlikely to be the financial windfall advocates claimed,” said Kelly Jakubek, a spokeswoman for the Illinois Department of Healthcare and Family Services (HFS).

Illinois lawmakers had hoped to save $350 million by double-checking Illinois’ 2.7 million Medicaid patients, and removing those who don’t qualify.

Illinois’ Medicaid chief, Julie Hamos, who is also the state’s HFS director, said earlier this year she hoped to save $150 million by cleaning up the rolls.

Illinois will spend about $78 million to have Maximus, a Virginia-based consulting firm, review the Medicaid program. Maximus has analyzed about 195,000 cases and recommended Illinois remove more than 101,000 residents from Medicaid.

So far in 2013, HFS has decided to cancel 43,662 Medicaid cases, while keeping or changing 84,967 people. HFS still has to act on another 65,000 or so cases.

Quickly Back On Medicaid

But even someone who has been removed from Illinois’ Medicaid program is not completely cut off.

“Over the last five years or so, on average 25 percent to 33 percent of the people disenrolled return to Medicaid within three months,” Jakubek said.

If you’re doing the math at home, that means as many as 14,408 of the 43,662 could be back on Medicaid in a matter of months.

Jakubek said in part because of the moving enrollment and reenrollment numbers, Illinois doesn’t “yet have the cost savings.”

In other words Jakubek can’t say if paying Maximus to scrub the rolls is saving any money.

“Once you add people to the system, it’s very difficult to take them off,” said State Sen. Dave Syveron (R-Rockford).

Syverson said he has “concerns” about the number of people who have been removed from Medicaid and the lack of any concrete savings figures.

“We need to make sure that we have a strict system in place, otherwise we’re going to be caught financially short moving into 2014,” Syverson added.

Hundred of Thousands Newly Eligible

Illinois will expand Medicaid to cover between 300,000 and 500,000 newly eligible people next year as part of Obamacare.

“If we add people to (the Medicaid expansion) who are not eligible, will the federal government pass that cost back to the state?” Syverson asked.

Illinois’ Medicaid scrub is supposed to take two years, but it is less clear who will be doing the work.

Earlier this summer an arbitrator ruled in favor of Illinois’ largest public employee union, the American Federation of State, County, and Municipal Employees, saying the state violated its contract by awarding the Medicaid scrubbing to Maximus.

AFSCME wants Illinois to hire 100 new public employees to finish the two-year review.

Jakubek said the state is still debating whether to appeal.

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