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Illinois Grapples With Rising Immigrant Insurance Costs

The program that provides state-funded health insurance to adult undocumented immigrants was first estimated to cost $220 million. But three months later, that price tag has ballooned, complicating the state’s budget debates.

a man receives paperwork following an appointment with a dermatologist at Cook County Health
Ananias Ocampo receives paperwork following an appointment with a dermatologist at Cook County Health on March 14, 2022. At right is advocate and caregiver Hilda Burgos. Ocampo, 78, has health insurance thanks to the Medicaid-like program that now benefits immigrants 65 and older regardless of their immigration status. (Antonio Perez / The Chicago Tribune)
The $49.6 billion budget Illinois Gov. J.B. Pritzker introduced in February estimated the cost of a program that provides state-funded health insurance to adult immigrants who are in the country without legal permission at $220 million.

Just three months later, that estimate has grown fivefold, swelling to $1.1 billion and threatening to blow a hole in the Democratic governor’s proposal for the budget year that begins July 1, the first of his second term.

At the same time, revenue flowing to the state appears to be slowing, putting further pressure on Pritzker and the Democratic-controlled legislature as they try to assemble a spending plan that continues the financial progress made during the past four years. The General Assembly’s spring session is scheduled to adjourn May 19.

Illinois created a program in 2020 that provides Medicaid-style coverage to immigrants 65 and older who are in the country without legal permission or who have green cards but haven’t completed a five-year waiting period and are therefore ineligible for the traditional health insurance program for the poor, which is jointly funded by the federal government. The program has been expanded twice, now covering those 42 and older.

Even as enrollment has far outstripped expectations, some Democratic lawmakers are pushing to further expand coverage, opening the program to people 19 and older, which the Pritzker administration estimates would cost an additional $380 million in the first year.

The financial pressure is exposing tensions between Democrats’ open-arms stance on immigration and the limited resources available in a state that has only recently begun to stabilize its chronically shaky finances.

Advocates who’ve backed the program and are seeking further expansion question the accuracy of the state’s cost estimates and are pushing back on what they see as anti-immigrant sentiment, particularly among Republican lawmakers.

Pritzker, who has signed the health care program expansions into law and trumpeted them in news releases, now appears to be distancing himself from the effort, which a spokeswoman described as “a legislative initiative that relied on independent outside cost projections.”

“Every balanced budget that has passed is negotiated with the General Assembly and includes priorities the governor lays out in his budget address and the priorities of lawmakers in the General Assembly,” Pritzker spokeswoman Jordan Abudayyeh said in an email. “As the program was implemented and real costs were calculated it became clear the program was going to cost much more than what the advocates had predicted.”

With an estimated surplus of $303 million, of which $138 million was earmarked for the state’s rainy day fund, the budget Pritzker introduced for the coming year did not include enough cushion to absorb the $880 million overrun.

What’s more, the legislature’s bipartisan forecasting commission just lowered its revenue estimate for the current year, essentially erasing a projected budget surplus, after tax receipts dropped substantially in April, compared with the same month last year.

While the change brings the legislative commission’s forecast in line with Pritzker’s more conservative estimate and doesn’t affect projections for next year, the administration nevertheless is urging lawmakers to be judicious with spending proposals.

“I would simply encourage caution,” Department of Revenue Director David Harris told a Senate committee late last month.

During a Wednesday budget hearing for the Department of Healthcare and Family Services, which administers the health care coverage for immigrants, state Sen. Chapin Rose, a Republican from Mahomet, said the projected overrun in the program next year “is a significant hit because of the other choices that are now going to have to be made by the General Assembly on how to fill this $880 million gap.”

The program also is running over budget in the current year, with the total tab now expected to be about $690 million, more than three times what was budgeted, according to the Department of Healthcare and Family Services.

However, the department expects to be able to absorb the cost due to lower-than-expected spending in other areas, Ben Winick, the department’s chief of staff, told a Senate committee Wednesday.

Rose said the projected current year cost overrun would be enough to cover increased funding for services for intellectually and developmentally disabled residents and put the state in compliance with a federal consent decree. Community service providers have repeatedly requested such funding in recent years, but Democrats have said the state can’t afford it.

The governor’s office wouldn’t say how it proposes to address the exploding costs of the immigrant health care program, or whether options such as closing enrollment in the program or raising taxes to pay for it are on the table.

“The administration is working with the General Assembly to discuss the path forward for this legislative initiative,” Abudayyeh said.

As for the proposed expansion of the program, Pritzker’s “focus remains on investing in priorities he outlined during his budget address,” she said.

The popularity of the program, despite some shortcomings, among a population that has few other options for health care coverage perhaps shouldn’t have been a surprise.

When the program was introduced for those 65 and older in 2020, the budget for the entire year was spent in the first month, according to a briefing the Department of Healthcare and Family Services gave lawmakers earlier this spring.

“The initial cost overrun should’ve raised alarms with HFS, and the Pritzker administration should’ve shared this information with all of the members of the General Assembly,” state Rep. Norine Hammond, a Macomb Republican, said at a news conference last month where she was joined by other members of the House GOP.

The cost of the program is “simply unsustainable and will lead to the loss of funding for services for our most vulnerable citizens,” Hammond said.

Rep. Ryan Spain, a Peoria Republican, called for a moratorium on new enrollments.

“It is time that we have some adults in the room, and we need to exercise some fiscal responsibility,” Spain said. “We have to hit the pause button on this program before it’s too late.”

Sen. Omar Aquino, a Chicago Democrat who is sponsoring the proposal to lower the eligible age for enrolling in the program to 19, said Illinois has been a “trendsetter” when it comes to providing health care coverage to citizens and noncitizens alike. He said his bill is only trying to build on the legislation that made the state the first in the nation to provide coverage for noncitizens’ children, he said, as well as the more recent coverage for adults.

“For seniors, 65 and older, back in 2020, and every year since then, we have expanded coverage. So, this year (we were) ultimately trying to finish that work that has been really in the works for over a decade,” said Aquino, whose district includes Latino neighborhoods on the Near Northwest Side.

The proposal isn’t meant for asylum-seekers, like those who have been sent to Illinois from Texas and other states, who Aquino said get coverage through the federal government. But “there’s a possibility after a certain amount of time that they end up transferring over to the program, though that’s undetermined,” he said.

“These are really for families that have been sort of already in the state of Illinois for a long time. The idea that noncitizens live in one community and in one house … noncitizens live in all our communities and they’re in mixed-status families,” Aquino said.

Despite the budgetary concerns from analysts and Republicans, who’ve decried what they view as excessive spending in Pritzker’s budgets since he became governor in 2019, Aquino said he intends to continue with his efforts to expand the immigrant health care program.

“We know the impact that this has had throughout the state of people who have been able to get health care coverage for the first time in their lives, and so we know how beneficial it’s been,” he said.

Aquino deferred to HFS when asked how the state might cover the costs of the program and his proposed expansion. “That’s something that HFS is sort of, supposedly, working on to get proposals to us,” he said. “That’s more of a discussion there.”

The higher-than-expected enrollment in the existing program should be viewed as a positive, said Tovia Siegel, campaign director for Healthy Illinois, a coalition that advocated for the program’s creation and also backs the proposed expansion.

It “means that more people than we expected are getting access to life-saving and life-changing health care, not only emergency and specialty care, but also primary care, preventative care, dental, vision, behavioral health, really comprehensive health care,” Siegel said.

Despite the initial surge, she said enrollment should plateau, as it has among the 65-and-older population that first became eligible in 2020.

Siegel pointed out that taxpayers already bear the costs of immigrants and others without health care when they show up in emergency rooms, often to be treated for conditions that could have been averted or taken care of at a lower cost if those individuals had access to primary care.

Siegel also noted that the state appears to be leaving federal money on the table by not getting reimbursement for qualifying emergency health services provided to immigrants without documents. Indeed, Healthcare and Family Services Director Theresa Eagleson told the Senate committee that the department believes it will be able to recover about $100 million or more in federal cash to help with next year’s outlay on the state’s health care program for undocumented immigrants.

Siegel said arguments against the program and its expansion are “fueled by a lot of, unfortunately, tired and typical talking points around immigrants taking our resources.”

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