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Cook County misses ambitious goals for Medicaid expansion

Friday, June 28, 2013
Crain's Chicago Business
by Andrew L. Wang

The Medicaid expansion is helping Cook County's budget, but not nearly as much as Board President Toni Preckwinkle had predicted.

The county is projected to pull in just $122 million during the current fiscal year because of the expansion, missing by about a third its ambitious goal of raking in $197 million from the health care program for the poor, according to a budget report issued yesterday by Ms. Preckwinkle.

Despite the shortfall, the expansion is expected to have a net positive effect of $28 million on the budget, after $94 million in implementation expenses. Still, it won't be enough to erase an expected $18 million deficit in the county's nearly $2.26 billion general fund for the current fiscal year, which ends Nov. 30.

In fiscal 2014, Ms. Preckwinkle is expecting the Medicaid expansion will provide a $74 million net boost to the county's budget. Despite the additional funding, she must still close a 2014 budget gap that is currently estimated to top $152 million.

CountyCare is a key part of Cook County Health and Hospitals System CEO Ramanathan Raju's plan to reduce taxpayers' subsidy of the financially challenged public health care network.

Dr. Raju set a lofty goal of enrolling 115,000 people in CountyCare during the year. Instead, the county has submitted 42,000 applications to the Illinois Department of Human Services with about 16,000 new beneficiaries approved and enrolled, he said in an interview. The county started recruiting patients in February.

He says the flow of new applications to CountyCare is a better indicator of the progress of the one-year program than the number of approvals, which are subject to delays as applications wend their way through the state approval process.

Counting applications, the county is exceeding expectations, he said, having collected 71,000 applications in the first six months. The county can collect applications until Dec. 31, when the program is set to end. CountyCare will be paid for beneficiaries from the date of application, even if they are enrolled months later.

“We will get 115,000 in the queue” before Dec. 31, Dr. Raju said. “What you are seeing is the lag in the ability to get the approval.”

“The program itself is a smashing success,” he added. “I'm not missing the goal.”

The county expects to receive 47,000 approved applications by the end of the fiscal year and say they are using a “conservative” 56,000 enrollment estimate for 2014.

Reaching full enrollment is likely to be a tall order. The county will be helped indirectly in coming months as the Quinn administration ramps up its marketing and education campaigns for the state's health insurance marketplace. The promotional effort is intended to raise awareness among the uninsured about the options for health coverage ahead of Oct. 1, when open enrollment begins on the joint federal-state benefits exchange.

More people will likely enroll in CountyCare as they become aware of the need for coverage, said Barbara Otto, CEO of Chicago-based Health & Disability Advocates, a nonprofit group. The uncertainty for the county, she added, was whether the state can process applications fast enough.

“The biggest challenge for the county is how shored up is the state's infrastructure,” she added. “Is the state going to be able to process applications in a timely fashion?”

Despite the obstacles, the county's enrollment goal is “within reach,” she said.

To reduce the backlog, the state is committing more manpower to processing applications, doubling to 100 the staff for the work this month, county officials said.

During fiscal 2013, positive reimbursement rate adjustments and a boost in federal payments for having a disproportionate share of indigent patients are helping drive up the county health system's revenues from patient fees and reimbursements to $549 million, $35 million more than budgeted. Next year, however, patient revenue is expected to fall 7.5 percent, to $508 million.

But that drop is projected to be at least partially offset by a sharp rise in revenue from CountyCare, which is estimated to nearly double, to $356.2 million in fiscal 2014, up from the $122 million estimate in fiscal 2013.

CountyCare is expected to provide a $74 million net positive impact to the county's overall budget next year, even after factoring in the program's increased expenses of $85.3 million.

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