Illinois budget crisis could turn ‘Obamacare’ success story into tragedy

CHICAGO — Two days after the Illinois legislature failed to meet its May 31 budget deadline, Greg Kusek chatted with a mobile outreach worker below a chilly North Side underpass. “This is my first time like this,” says Kusek, 60, who lives in a tent and has lacked stable housing for seven years. “You flop around from place to place. That’s the homeless life.”

He suffers from major depression and anxiety that long went untreated. Because he was uninsured, he used to receive care only in moments of crisis, first through the emergency room, then the psych ward. About a year ago, he obtained Medicaid, giving him regular access to a doctor, and when he finally gets a room in supportive housing — his caseworker from the mental-health nonprofit Thresholds says he is on the verge of being approved — Medicaid will fund on-site counseling and medication management to ensure his mental and physical well-being.

Kusek only recently became eligible for public health insurance, though he has lived at or below the federal poverty level for years. In most states, traditional Medicaid doesn’t cover low-income childless adults ages 19 to 64. But the Affordable Care Act (ACA) changed this rule and, beginning in 2013, gave states billions in federal dollars to insure adults with incomes of up to 138 percent of the federal poverty level. It also made general improvements to mental-health and substance-abuse coverage for all Medicaid recipients.

Illinois is among the 29 states (plus Washington, D.C.) that haven’t fought Medicaid expansion, so ACA adults like Kusek are now technically covered through federal funds. Still, cuts to state and city programs can undermine the social infrastructure — housing, street outreach and local clinics — on which their health depends. And Illinois now faces a more than $6 billion deficit, which means major budget reductions are imminent.

In February, Gov. Bruce Rauner, a Republican multimillionaire touting a “turnaround” agenda, announced a plan to shrink the state Medicaid program by $1.5 billion, the largest single-year cut in history. His proposed budget took millions more out of homeless youth services, community mental health programs and even burial funds for the poor. The legislature rejected these terms and proposed a $36 billion wish list but with no new revenue sources and a $3 billion gap. As it stands, there is no compromise and no money to keep the state going as of July 1.

The budget impasse is already hitting individual providers: Last week Catholic Charities said it would close two shelters and two children’s centers because of uncertainty in funding. The bigger worry is that an eventual compromise will snip and slash and thus unravel the progress made since the ACA.

“Illinois was going in a very good direction,” says John Bouman, the president of the Sargent Shriver National Center on Poverty Law. Now, it seems, “we are in for a period of austerity. Even if there are new revenues, it probably won’t be enough to avoid cuts.”

Two years ago, the nonprofit Teen Living Programs (TLP) opened a youth drop-in center on Chicago’s South Side. It's located in a church basement on the corner of a broad, tree-lined street, a visible rejoinder to neighborhood stereotypes of shootings and blight.

The center gives 18-to-24-year-olds a place to hang out during the day, wash up, eat two meals and access health and legal services. The Chicago Coalition for the Homeless estimates that 25,000 unaccompanied youth live on their own in Illinois, half of them in Chicago. Indeed, many of the young people at TLP are homeless — on the streets or staying at shelters that boot them out during the day.

In early June, 20-year-old Brianna Williams arrived at the drop-in center from the Ujima Village night shelter. She played video games, ate lunch and spoke with an attorney about health insurance. “It’s comfortable here,” she says. “The staff have known me since I first came to Chicago, and I was using drugs then. A lot of people would say I’ve changed. TLP has helped me out. I used to be an aggressive person, and now I’m mellow.”

Before the ACA Medicaid expansion, she would have aged out of public health insurance at 19, despite her poverty and chronic health conditions (epilepsy, hearing loss, severe ADHD and depression). “It was one of the populations that fell through the cracks, because at 18, they stopped qualifying for ‘kids care’ [state children’s health insurance] but didn’t qualify for anything else,” says Ericka Hill, manager of the TLP drop-in center.

Rauner’s office holds the state legislature “and the Chicago political machine” responsible for the “$6 billion hole,” according to an email from Catherine Kelly, his press secretary. With respect to health care, she says, “many people served by the services being discontinued are now covered by the expansion of Medicaid and coverage of mental health under the Affordable Care Act.”

A wide range of life-saving services is at stake: In Chicago, mobile visits to homeless, mentally ill adults and shelters and transitional-living programs for youths, to name a few. In May the state legislature wrote most of these safety-net services and a number of Medicaid benefits back into its proposal, spurred by the protests of advocates and economists who fear the long-term monetary and social costs of neglect. 

“We understood there have to be cuts to live within our means,” says Democratic state Rep. Greg Harris, who chairs the Appropriations–Human Services Committee. Yet he emphasizes that “the expansion of Medicaid and getting more people into early, preventive care have begun to pay off. For the first time, what we’re proposing for fiscal year ’16 is the exact amount of spending for fiscal year ’15, and we have several hundred thousand more people on the rolls.”

Republican state Rep. Patti Bellock, who is also on the committee, acknowledges the “heart-wrenching decisions over the Medicaid program” but says that “the Democrats put forward a spending plan and no revenue. It’s not a budget. What I’m concerned about is the false hope, especially in social services and health care.”

At this point, no one seems to know what will happen. The legislature’s plan quells the worst-case-scenario fears of mental-health and housing advocates, but still shaves Medicaid reimbursement rates by 2.25 percent, meaning providers would be paid less for their work. This worries patients and physicians, especially at smaller facilities. Illinois’ rates are already at the low end of the national range. 

“You’ve got the benefit for [mental health], but one, if you don’t have an adequate number of providers, and two, if you don’t have adequate reimbursements to see those people, even the most dedicated providers won’t last,” says DiPietro.

Until Springfield’s warring budgets are squared with a revenue plan, providers and patients will have to hold their breath. Both the center-right Civic Federation think tank and the Responsible Budget Coalition, an advocacy bloc of 200 service providers, unions and advocacy groups, recommend increasing corporate and individual income tax rates and expanding the sales tax. But having missed the May 31 deadline to come up with a budget, the legislature now needs a three-fifths supermajority to pass any legislation.

On the national front, a growing number of Republican presidential candidates are promising to repeal “Obamacare.” For Illinois patients and providers, though, a more robust Medicaid has become an indispensable component of the health care system. “It’s really been a godsend for us,” says Nieal Marie Smith, the case management manager at Chicago’s Night Ministry, a nonprofit that advocates for and shelters homeless young adults. “That had always been my biggest frustration. Unless you were pregnant and parenting or disabled, you couldn’t get a medical card … The few free places were swamped. It felt good not having to say, ‘Well, you have to wait two months for an appointment.’”

Illinois has been a poster child for the ACA, but everything is now in flux. Rauner and the state legislature will continue negotiating through the summer, perhaps even into the fall. In the meantime, Kusek and Williams will make use of their newfound health insurance.