Morality, Money, and Medicaid
Medicaid for Undocumented Immigrants, a growing crisis in Illinois
Acid, Abortion, Amnesty. This was the epithet lobbed at George McGovern and I have reclaimed it as a rallying cry. In 1972 however, amnesty meant amnesty for draft dodgers of the Vietnam war. Today, it is for the undocumented immigrant population. Creating a path for them to become Americans would be a sensible plan. The near total of them live normally as anyone else, per capita they're less criminal and more likely to be in the workforce. I have taught their children in CPS, the next generation integrates and lives more or less similar in tastes and values as their native born peers. They listen to our music, wear our jeans, they watch our sports, play our video games, and they love all the foreign entertainment American children love: K-pop, anime, and the internet culture at large. They belong in our country.
And as State government works to integrate new people into our society, they have extended partial Medicaid benefits to them. At first, only to seniors; then, to adults 42+. This represents desperately needed healthcare for some of our most vulnerable neighbors, but the cost has grown exponentially and the State is struggling to sustain this program. Let’s breakdown the program, the pro-argument, the anti-argument, and look at the political future of it.
Health Benefits for Immigrant Seniors and Adults: The Program to Date
Back in 2020, then State Representative Delia Ramirez led the expansion of Medicaid to undocumented seniors. In the midst of the pandemic and the older and real terror of the lack of access to healthcare, it was seen as a vital lifeline. This allowed undocumented seniors and eventually adults to apply for Medicaid. Initially budgeted to $2 million, cover 900 people, this was exhausted in just one month. In 2021, the program grew to more than $100 million, the next year more than $220 million. During this time it was expanded to adults 42+. In 2023, the cost was projected to $1.1 billion, cut down to $550 million by the Governor.
To curtail these costs, the Governor was granted the power to freeze enrollment in the last session, which he has used to implement copays, cost sharing, and limit reimbursement to hospitals. This could mean copays as high as $250 for non-federally reimbursed hospital treatments and a total cap of 16,500 Senior enrollees. This is where the program stands now.
Humanitarian relief and rescuing hospitals: The Pro-Argument
The program does have a rock solid moral argument. A stroke of a pen and a document status change, undocumented immigrants would be normally qualified for this coverage just like everyone else. And I am of the opinion that stroke of the pen needs to happen. So the State acting now before the Federal government does is quite noble.
Furthermore, now that the program has been established, people are reliant on it. Removing this program or altering it significantly will be a displacing event. We must always remember these aren’t numbers on a sheet but human lives. If this is cut, it will be a tragedy of epic proportions. And for the pro side, these aren’t faceless charity cases but their own parents, grandparents, relatives, and more. This is a personal and human connection to the issue that cold economics and fiscal analysis can’t fully capture.
The objective of universal healthcare is to secure healthcare as a fundamental right of the people. We all need it to live, like food and shelter.
These hospitals also need this. Uncompensated care is an enormous stressor to the financial viability of the hospital system. Public hospitals with largely low income patients need these Medicaid dollars to cover expenses. If we remove this program, we still have a problem of uninsured users in the system.
Cost, Usage, and Political Necessity: The Anti-Argument
A common pro argument is that undocumented individuals will eventually face health issues that land them in the emergency room - the most expensive point healthcare. Instead of waiting for this, providing healthcare before it’s an emergency is put forth as saving more money for the state. But unfortunately that claim doesn’t seem to be empirically true nor does it address the two fundamental problems of the program: 1. the increased use and expenditure on healthcare in total and 2. that these costs are borne solely by the State of Illinois.
Advocates are mistaking cost-effectiveness for cost-saving. The money in the budget for healthcare is more efficiently spent but ultimately the costs are at or above later treatment. You’re buying a good - healthcare. The goal should be efficiency, so let’s not convince ourselves it’s totally not worth it. But you’re not saving money. Even optimistic reports show preventative care saves at most 0.2% of total US healthcare spending. The eye popping billions of savings are a fifth of 1% in reality. Advocates pitch the entire budget is being saved long term. Preventative care is things like encouraging people to quit smoking, dieting, or getting vaccinated. Diabetes treatment is not preventative care, that's just normal care that the State of Illinois is increasingly struggling to afford.
Another economic argument is that it will lead to a reduction in ER visits as treatment for serious illness can be caught earlier. But the health policy research shows this isn’t the case. ER usage goes up in states with Medicaid expansion. This is Medicaid expansion. We are making healthcare cheaper and more available; people are using it more, so the cost savings isn’t materializing.
There is also the political anti-argument outside pure moneyball. Let me pose a hypothetical: What will happen to the progressive coalition when the teachers pension have to be cut to accommodate increasing Medicaid expenditures? This is troubling when we already have reports that revenue coming into the State is stagnant or could potentially decline in the future. This is repeating the Madigan mistake of unfunded promises that people become reliant on which drags down everything in the long run.
We are in a State that voted down a progressive income tax by 10% while at the same time voting for Joe Biden by 17%. That’s serious political blowback. This could mean intra-caucus fighting between the immigrant advocates and public sector unions while we face a potential tax revolt from the general public. Rauner won, Mark Kirk won. This isn’t unheard of. It can happen. And the results of that were quite bad as any fellow public university student in Illinois of the mid-late 2010s can attest! Caution is needed before we make big fiscal demands.
Conclusion: The Future
I think this article is a great illustration of the dilemma we are facing. Very real human lives are on the line, desperately needed care is at stake. If this goes away, people will suffer and likely die. But take a look at the numbers. This article shows that in the first year the cost was over $100 million, vastly higher than the initial $2 million. Within a year of its publication that $100 million cost overrun had multiplied again by another order of magnitude to $1.1 billion dollars.
I hope we can find some way to continue this program in some form or another, it’s just a matter of finding the right fiscal formula to make the program sustainable. I actually find this made me even more supportive of Medicare for All but that’s a federal program, not a state level one. If we are going to bring down our health spending, we will need hard cost controls that Illinois simply cannot do.
I’ll see you in the next one.