Earlier this week, the Republican leadership of the House of Representatives revealed its plan for the repeal and replacement of the Affordable Care Act. Included in the plan is a proposal to significantly change the federal government’s role in funding Medicaid.
The vast majority of Misericordia residents receive Medicaid funding which pays for our family members’ residential care and day programming. Medicaid accounts for almost $40 million of Misericordia’s annual budget. Medicaid payments come from the State of Illinois, but the federal government reimburses Illinois for 50% of the payments made by the state. Currently, if Illinois increased its Medicaid payments, the federal government would pick up one-half the cost of that increase.
Under the proposed plan, in 2020 federal funding of Medicaid would be capped on a per capita basis. The federal government would only pay the state 50% of the amount the state spent for each of its Medicaid recipients in 2016. In the years after 2020, the federal portion of Medicaid would increase by the same percentage as the increase in the medical cost component of the Consumer Price Index. The states that would be hurt most by this change in Medicaid funding are the states that in 2016 had the lowest Medicaid payments per recipient. You will not be surprised to hear that Illinois is one of those states. In fact, Illinois is 48th among the 50 states. Only Georgia and Nevada rank lower in per recipient Medicaid payments. Some states, New York, for example, pay more than twice as much as Illinois per Medicaid recipient. We know that Illinois has not increased its Medicaid payments for individuals with developmental disabilities in nine years.
One consequence of Illinois’s failure to increase rates is that Misericordia’s annual deficit, the gap between what the state pays and what it costs to meet the needs of our family members, has grown each year. That gap is now $20 million. The other consequence of Illinois’s failure to increase rates is that if the proposed plan becomes law, the federal share of Illinois’s Medicaid payments will be locked in at Illinois’s extremely low funding level. Through the Ligas case, we have been pushing the state to increase its Medicaid funding for ICF/DDs and CILAs. One of the points we have made with the state is that the federal government will cover half the cost of any increase. If the proposed changes to Medicaid are adopted, the federal government will not absorb half the cost of any increase. The entire amount of the increase will be paid by the state. This will make it less likely that Illinois will voluntarily increase rates. If Illinois does agree to increase rates, the proposed plan will cause any increase to be half of what it otherwise would have been, because there will be no federal contribution.
Therefore, the proposed changes to the federal funding of Medicaid will hurt Misericordia and all of its residents. Indeed, the proposal will have significant negative consequences for all individuals with developmental disabilities in Illinois who rely on Medicaid to get the services they need to live a quality life. We will be closely watching the progress of the proposed changes. At the appropriate time, we may be calling on you to contact your government representatives to explain how the proposed changes will affect your family member.
Please feel free to contact me with any questions or comments.