Fiscal Focus Articles
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From the Comptroller
 Dear Readers:
The Medicaid program is a cornerstone of federal and state efforts to provide medical services to low income children, adults and the disabled. Created in 1965, Medicaid has served millions of Americans through a unique partnership that splits the costs of medical care between the federal and state governments. Medical costs have continued to increase over the years and attention has shifted to ways to balance government budgets.
State Medicaid Programs Face Funding Challenges
After two years of slow growth nationwide, costs of the Medicaid program are ramping up again and having a significant impact on state budgets. Medicaid costs increases were surprisingly low in 2006 and 2007, inching up 2.9% and 1.3%, respectively. But that relative lull is expected to be short lived as experts now estimate that costs will rise 6.3% in 2008. While this increase is less than the sharp jumps in the first half of the decade, it is still alarming to the states.
The Section 25 Budget Loophole
Section 25 of the State Finance Act requires that expenditures for liabilities incurred within a given fiscal year be paid from that same year’s appropriation. Therefore, all payments related to a specific fiscal year should be paid by the close of the state’s lapse period two months after the end of the fiscal year. The Act goes on to provide exceptions to the fiscal year limitation.
Medicaid Provider Assessments and Intergovernmental Transfers
Providers of medical services are tapped through Medicaid assessments and intergovernmental transfers (IGTs) to help meet the growing costs of the Medicaid program. On average, providers benefit from helping fund Medicaid as their payments are returned with additional federal reimbursements that allow the state to raise rates and increase Medicaid payments.
A Brief Overview of All Kids
All Kids, Illinois’ health insurance program for children that began on July 1, 2006, is the new name for the former KidCare program that was initiated back in 1998. Congress enacted the State Children’s Health Insurance Program (SCHIP) in 1997 to address the growing number of uninsured children by providing grants to the states to expand health insurance coverage to children whose families earned too much to qualify for Medicaid. Illinois responded by establishing the KidCare program in 1998.
Medicaid Legislation in Illinois
Medicaid has become the nation’s number one source of public health insurance for low income families, the disabled and poor senior citizens. National statistics from fiscal year 2007 estimate that 44 million people in low-income families are Medicaid recipients and nearly 14 million elderly and disabled people benefit from Medicaid. In Illinois, there are more than 2 million people enrolled in Medicaid.
Access to Medical Providers
Although Illinois in recent years has provided health insurance to more people through its Medicaid program, having insurance coverage does not guarantee easy access to medical providers. Numerous counties in Illinois do not have their own hospital, requiring patients to drive significant distances for emergency services.
Steps Toward Universal Healthcare
With 47 million Americans currently uninsured, health care ranks high on the agendas of many lawmakers. Given that they regulate health insurance for small businesses and individuals and administer assistance programs such as Medicaid and SCHIP, many believe that the states are better equipped to tackle the issue than is the federal government, who has yet to produce a nationalized healthcare system.
Medically Uninsured in the United States
Of the 299 million people estimated to have been living in the United States in 2006, 47 million representing 15.8% of the population had no health insurance according to the 2007 Annual Social and Economic Supplement to the Current Population Survey conducted by the US Census Bureau.
Medical Assistance Spending
In fiscal year 2007, appropriated spending for medical assistance administered by the Department of Healthcare and Family Services totaled more than $11.6 billion, over $6.1 billion or 110.8% higher than the $5.5 billion spent ten years ago in fiscal year 1998.
Did You Know
Click here to test your knowledge concerning Medicaid/medical assistance.
Vital Statistics - April, May, June 2008
General funds revenues and expenditures for April, May and June 2008.
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