Illinois' Obamacare Troubles

The cash-strapped state prepares for a "train wreck" as Obamacare goes into effect.

Illinois wants to be the engine that pulls states toward the Affordable Care Act, yet a metaphorical "train wreck" is just around the bend.

Julie Hamos, director of Illinois' Health Care and Family Services department, told Illinois lawmakers Tuesday never mind the president's health care reform: the state is still struggling to fix the current health care system for the poor.

She said Illinois saved $1.1 billion last year, but lawmakers were expecting $1.6 billion in savings. The state has $2.3 billion in unpaid Medicaid bills.

"We haven't solved the problem of not paying our Medicaid bills," Hamos said.

Saving money in Illinois' Medicaid system has been an exercise in lowered expectations.

State Sen. Heather Steans (D-Chicago) said Illinois hoped for more than $500 million in savings by simply trimming the Medicaid rolls.

That didn't happen.

"Originally there has been some intent and effort to try and get a saving number of $700 million. We thought that might be high and unachievable," Steans said. "We put it down to $350 million, still, I think, understanding that it might be difficult to achieve."

Hamos doesn't know how much Illinois could save by trimming the Medicaid rolls, in part because an outside auditor has reviewed the accounts for only 20,000 of Illinois' 2.7 million Medicaid recipients.

"Of those 20,000 they have recommended to cancel 13,550."

Hamos said those cases are now "with case workers" but didn't say if anyone has actually been dropped from Medicaid yet.

But that number—13,550—is dwarfed by the huge increase in new Medicaid recipients under the Affordable Care Act.

Hamos expects 509,000 new Medicaid patients in Illinois by 2017, when the ACA is fully operational.

The federal government will cover 100 percent of the cost for most of those people, but the state would have to pay half for at least 167,000 new patients, as well as the 2.7 million people now on the Medicaid rolls.

Finding the money to pay those bills could be a problem. By 2014, Hamos said, the state is headed for a "train wreck," which could leave the state wanting for billions in federal money.

As Illinois moves Medicaid patients out of the emergency room and into managed care, as required by a 2011 state law, the state will pay less money to hospitals. That, in turn, would lower the amount of money Illinois is able to claim for the federal Medicaid match.

"We are going to have a bunch of dollars that are not matchable," Hamos said. "I call it a train wreck that we are going to have to deal with this year."

Illinois is addicted to the federal Medicaid match, as more than $10 billion of the state's $17 billion in total Medicaid spending comes from the federal government.

This article originally appeared at Watchdog.org.