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* Remember this Tribune story from the other day?…
Starting in 2017, Illinois and other states that also expanded their programs are required to start paying a small portion of the bill, rising to no more than 10 percent of the total tab. State health officials estimated in 2012 that Illinois’ portion of the expansion would cost $573 million from 2017 through 2020.
But far more people signed up in 2014, the expansion’s first year, than the state expected. Based on multiple interviews and a Tribune analysis of government data, Illinois will pay at least $907 million from 2017 through 2020 because of those new members. The tab could surge even higher, though.
A document sent by Quinn’s office to the federal government over the summer significantly raised the per-person estimated cost, bumping the state’s total outlay to $2 billion, using 2014 enrollment numbers, more than three times the original estimate.
* The story was accompanied by this startling graph…
The $882 figure was from a June, 2014 waiver proposal drafted by Gov. Quinn’s office, not the Department of Healthcare and Family Services. That’s crucial to what we’ll get to in a moment.
* The Tribune editorial board thundered from on high…
Two years from now, when Illinois taxpayers start covering a portion of the expansion costs, they’ll be paying far more than the $573 million they were told they’d have to pay from 2017 through 2020. The real cost will be at least $907 million. And a document sent to the federal government last summer by the office of then-Gov. Pat Quinn said that number could swell to $2 billion.
Chalk it up as one more failure of past management that Gov. Bruce Rauner faces Wednesday as he delivers his State of the State address.
* But can those numbers really be correct? Are we looking at almost doubling the per member, per month cost? I reached out to Samantha Olds Frey. Samantha probably knows more about Illinois’ Medicaid program than anyone alive. From her bio…
Samantha Olds is the Executive Director of the Illinois Association of Medicaid Health Plans. Prior to joining the association, Samantha was Speaker Michael J. Madigan’s Human Services & Medicaid budget analyst. During her tenure on the Speaker’s staff, Samantha helped negotiate and craft the Medicaid Reform Act of 2010, the $2.7 billion Medicaid reform package known as the SMART Act of 2012, and the Medicaid Expansion package authorized by the Affordable Care Act in 2013.
The Illinois Association of Medicaid Health Plans represents pretty much all insurers.
* Sam and I talked the other day and she sent me a rebuttal to the Tribune the next morning. I asked her to flesh it out a little more and she sent me this today…
Good Afternoon Rich,
I feel like I am saying the same thing over and over again. Simply that the $882 was not a real number and that the cost is significantly lower than that. I can try to explain more if you would like. It is just that there are a lot of Medicaid experts that I have spoken with and no one has quite been able to get to that high of a cost. We truly do believe it was a number created for negotiation purposes. It was also a projection and not based off of actual costs. In other words, the $882 was the ceiling of what could happen. However, we now have data and are seeing that what actually did happen was that ACA adults cost roughly $300 or less per month. (To put this in context, my exchange plan costs $333 and offers fewer benefits than the Medicaid program.)
1) The estimated cost of $454 to $882 does not in anyway reflect the true costs of Medicaid PMPM [per member, per month] nor does it reflect the cost of ACA individuals. The $882 amount was created by the Governor’s office and not HFS. At this point it is unclear what went into developing the $882. All we know is that in no way shape or form is it tracking with the true cost of the program. I am not a waiver expert, but it is my understanding that in the process of negotiating a waiver the state puts forth as high of costs as possible for the purpose of having a strong starting point. I am also aware that the Chicago Tribune was well aware that the $882 was not reflective of what HFS is seeing as the true cost of ACA adults.
2) I have attached 2 documents that will better reflect that cost. The first is a spreadsheet that tracks the cost of Medicaid since FY03. The other demonstrates what health plans are paid to serve the ACA population. When you look at the averages you see that we are right around $300 per member per month. It is also important to note that this is an average of averages. We have members that cost $100 and disabled seniors that cost thousands.
It is my understanding that the cost of an ACA adult will be roughly $300 per member per month. In fact, HFS is tracking a cost of roughly $230 per member per month right now. However, as the year goes on it is normal to see the later months have a higher cost than the earlier months. Due to this naturally occurring process I suspect we will see a cost of $300 per member per month or slightly lower by the end of the fiscal year. This is 1/3rd the cost of the Tribune’s projections.
3) The $882 was used to put the state in a good position to negotiate with the federal government. It included everything and the kitchen sink in order to draw in more federal resources for the program. It is my understanding that this is normal in negotiations on both the public and private side.
To put it simply, the $882 is not reflective of the cost of the program and it is my understanding that the Department explained this to the Tribune. Medicaid Managed Care Organizations and HFS believe that the average cost of a newly eligible or ACA adult is $300 or less per member per month.
As always, thank you for all that you do and let me know if I can provide any more information.
Warmest regards,
Samantha Olds Frey
Emphasis added to show that, according to Olds Frey, the cost is only about a third of the projected per member per month costs claimed in the Tribune story.
* And as far as the Tribune’s earlier praise for Indiana’s Medicaid cost sharing ideas? Well, Olds Frey had this to say…
Cost sharing for Medicaid clients actually costs the state money. The administrative costs of collecting co-pays and premiums is incredibly high. This is especially true in the Medicaid program when you have union workers spending hours to collect a $20 premium.
Cost sharing for Medicaid clients decreases the quality of care. There is evidence all over the place that shows even a simple $2 co-pay decreases the likelihood of a Medicaid client seeking preventative care. Clearly a copay does not keep a client from getting sick though. Further evidence of this is that most Medicaid MCOs have eliminated copays because they want their clients to seek preventative care out as soon as possible.
posted by Rich Miller
Friday, Feb 6, 15 @ 2:22 pm
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Keep in mind Samantha is one of the people who pushed the Medicaid expansion knowing that it would add to the state’s cost down the road when the Feds stopped paying their share. We can’t afford the existing Medicaid bill and the one in the future will only sink us quicker.
Comment by Downstate Illinois Friday, Feb 6, 15 @ 2:31 pm
Rauner and his IPI advisers are determined to slash spending on health care for the working poor, regardless of how low the current costs are. That’s how they want to fulfill his promise to make IL the leader in compassion.
Comment by anon Friday, Feb 6, 15 @ 2:32 pm
Let’s not let facts ruin our narrative. Medicaid bad, unions bad, public workers overpaid. Rich guy job creator good.
Comment by Norseman Friday, Feb 6, 15 @ 2:33 pm
Downstate Illinois
On the other hand, once again the Tribune’s editorial board has been exposed for the fact free Henny Penny “The sky is falling!” bunch they are.
Comment by Anyone Remember Friday, Feb 6, 15 @ 2:33 pm
Thanks for putting this together Rich.
Comment by MikeMacD Friday, Feb 6, 15 @ 2:33 pm
===when the Feds stopped paying their share===
You’ll need both a GOP president and a strong GOP super majority in the Senate for that.
Comment by Rich Miller Friday, Feb 6, 15 @ 2:34 pm
The first season of The Office has the health care episode where Michael selects the Gold plan for the Scranton branch employees. Later, when corporate rejects this, Michael punts by having Dwight select a plan, and the employees face having a scorched earth plan. It appears that GQ’s office used gold-plan type projections as a negotiating tool and that hard numbers grounded in reality come nowhere close to the Tribune’s numbers, which are highly misleading at best.
Comment by Precinct Captain Friday, Feb 6, 15 @ 2:36 pm
MikeMacD, thank Sam, not me. She did all the work. lol
Comment by Rich Miller Friday, Feb 6, 15 @ 2:36 pm
===when the Feds stopped paying their share===
===You’ll need both a GOP president and a strong GOP super majority in the Senate for that.===
If this ever happened that would be the end of the program anyway. And the last republican EVER elected to Congress or the White House.
Comment by Been There Friday, Feb 6, 15 @ 2:38 pm
Didn’t the experts also miss the enrollment projection by 200,000 people? Let’s not be so quick to ignore the fact that the expansion costs far more than originally planned.
Comment by Mt. Monk Friday, Feb 6, 15 @ 2:41 pm
===not be so quick to ignore the fact that the expansion costs far more===
Enrollment is way up, yes. But cost per person is not.
Comment by Rich Miller Friday, Feb 6, 15 @ 2:47 pm
Getting practical here, co-pays tend to cause more problems (operating expense vrs. income) than they are worth. Remember, when you do co-pays, you just turned nurses and medical staff into cashiers as part of their overall duties.
They have to write/print receipts, take money & checks, and all the bookkeeping dealing with a relatively small amount of actual dollars. And it’s a daily headache, and a constant accounting headache.
It’s just an extra added pain that takes away from the primary purpose, which is to provide medical care in the most efficient cost effective way possible.
Think about it. If you increase the medical professionals overhead by imposing co-pays, they’re going to (a) Get those additional operating costs back somehow, or (b) Don’t provide those Medicaid services to patients. Which means other problems with fewer care providers.
Old Data Processing adage: “Complexity is easy, simplicity is Hard”.
Keep it simple. Forget the co-pays. You’ll save more money in the long run.
Comment by Judgment Day Friday, Feb 6, 15 @ 2:52 pm
@Trib. Edit. Board
Yep. And Dewey defeats Truman.
Comment by Ducky LaMoore Friday, Feb 6, 15 @ 2:53 pm
Gee, Samantha’s debunking of co-pays is almost verbatim what I wrote.
THIS is the part I find troubling:
“I am also aware that the Chicago Tribune was well aware that the $882 was not reflective of what HFS is seeing as the true cost of ACA adults.”
Comment by Juvenal Friday, Feb 6, 15 @ 2:58 pm
Before we can have a debate on whether we can afford something, its best that we agree on how much it currently costs. I don’t think that is asking for that much…
Comment by Salty Friday, Feb 6, 15 @ 2:58 pm
I’m having trouble with the math here. 882 times 540,000 is a bit under 500,000,000. (476,280,000, according to my calculator.) In other words, a bit under half a billion. And that’s the total cost, not the state’s cost. Where am I going wrong?
Comment by UIC Guy Friday, Feb 6, 15 @ 3:07 pm
That sound you hear is Samantha dropping the microphone and marching off the stage.
Comment by SAP Friday, Feb 6, 15 @ 3:07 pm
The Tribune used to be a newspaper. Now it’s a paper filled with half-truths and enough distortions to make for sensational stories that just might get read in this attention-challenged digital age.
I read their front page stories this week on Chicago Mayor Rahm Emanuel’s fundraising. It turns out that he takes contributions from corporate executives and real estate developers investing and hiring in the City. And he has also appointed to unpaid, non-for-profit boards people who have contributed to him.
Thank God for the high-caliber investigative reporters who unearthed this scandal.
Comment by Illinois taxpayer Friday, Feb 6, 15 @ 3:09 pm
UIC Guy, your math is correct. However, the 882 number is per month.
Comment by MikeMacD Friday, Feb 6, 15 @ 3:16 pm
@UIC Guy. That would be the cost for a single month. So that has to be multiplied by twelve to get to the total cost. Then the tribune decided to go over multiple years to make the number even bigger.
Comment by Juice Friday, Feb 6, 15 @ 3:19 pm
Worth more looking at this. On the surface it provides some relief.
Comment by A guy Friday, Feb 6, 15 @ 3:28 pm
Tribune used a projection that was way high. But commenter Mt. Monk is also correct, the Quinn administration totally low balled the number that would be served by expansion.
So if you are going to have a real discussion about costs, it would help to use real numbers. I think Samantha’s contribution is helpful and sane. Thanks for publishing Rich.
Comment by siriusly Friday, Feb 6, 15 @ 3:31 pm
Tax all those medical services and recoup millions of tax dollars that are being paid to fake NFP medical providers. BOOM! Follow this medical money people. It’s a crying shame that we pay so much for so little in the US for health care.
Comment by cdog1962 Friday, Feb 6, 15 @ 3:53 pm
Soooo…. Nobody else is troubled by the Quinn administration attempting to defraud the federal government by tripling the reported costs??
Comment by Anonymous Friday, Feb 6, 15 @ 4:24 pm
Big Brain Bruce, Statehouse Chick and Kass are just sad. They are sooooooo stupid. Embarrasing. Take it from a Wiseguy.
Whats their deal? What are they fighting for? The Planet Earth has figured out that healthcare is like a public utility, like water, electric and gas.
You’ve got a beef about people going to the doctor? What for, and to what end?
Comment by Wordslinger Friday, Feb 6, 15 @ 4:26 pm
Her numbers appear to show that per person costs are not driving liability but instead the high level of enrollment growth. Managed care doesn’t affect enrollment but costs so if that is the case what is the State paying the managed care companies to do?
Comment by Hoping for Rational Thought Friday, Feb 6, 15 @ 4:34 pm
If Ms. Olds-Frey disagrees with the Tribune’s case, she should present her figures through appropriate channels. Those negotiations with federal Medicaid authorities are probably continuing, and she may have inadvertently undermined the state’s case by publishing these figures with Rich. If the information she provided here is publicly available, then Tribune would have known about it before they went to print, in which case they were knowingly and willfully trying to aid the state’s negotiators.
Comment by Bureaucrat Monday, Feb 9, 15 @ 12:34 pm
===she should present her figures through appropriate channels===
LOL
Comment by Rich Miller Monday, Feb 9, 15 @ 12:36 pm