Chicago Faces $67 Million Shortfall After Obamacare’s Medicaid Expansion Busts Budget
Chicago’s public health system is facing a massive $67 million shortfall after an early adoption of Obamacare’s Medicaid expansion cost much more than expected, Crain’s Chicago Business reports.
Cook County, which encompasses Chicago and its surrounding suburbs, made a deal with the Obama administration to get an early start on the health care law’s Medicaid expansion in 2012.
But the resulting program, CountyCare, is costing millions more than original projections. The prototype Medicaid expansion lost Cook County $21 million in the first six months of operation — that’s expected to balloon to $63.5 million by November 30, according to the Chicago Tribune.
CountyCare was expected to pad the city’s coffers. In 2013, state officials projected that the new system would bring in at least $28 million by November, Crain’s reported. The cost of caring for the influx of Medicaid patients has busted projections partially because the newly insured are seeking pricier medical care than expected.
While the program has already failed to meet budget projections this year, the problem is likely to get worse in 2015. Medicaid expansion patients are required to use only CountyCare medical facilities for the first year — meaning the county will end up reimbursing itself for much of its spending on CountyCare coverage.
In January, however, CountyCare patients will be allowed to access other health plans and medical providers. That could leave the expanded Medicaid program to cover patients with the most expensive health problems, along with the least ability to pay. If the public health system loses more inexpensive patients next year, the budget crunch will get even worse.
Dr. John Jay Shannon, promoted to the top position at the Cook County Health and Hospitals System just weeks ago, is charged with finding $67 million in savings from the program by November. If he’s unable to, Cook County taxpayers will have to pony up to pay for the program.
Shannon told Crain’s that the county had “unrealistic expectations” that CountyCare would be “some kind of profit center” for the public health system. But Cook County officials were far from alone in thinking the federal funding would boost.
Advocates of the Medicaid expansion nationwide regularly castigate states that have decided against expanding the welfare program. The White House recently released a report attempting to shame states for refusing $88 billion in “free” federal taxpayer funding to expand Medicaid — but Cook County’s experience suggests states may not be able to count on the programs remaining free. (RELATED: White House: Red States Have Saved Federal Taxpayers $88 Billion By Rejecting Medicaid Expansion)