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Obamacare Mandates Threaten Already Weak State Budget

Press Release

Location: Washington, DC

Illinois House Republican Leader Tom Cross joined forces with U.S. Rep. Aaron Schock (IL-18) to call attention to mounting budget pressures facing Illinois taxpayers on the twin threats of explosive Medicaid costs and implementation of the federal Affordable Care Act, commonly known as ObamaCare. In March, Congressman Schock attended the historic Supreme Court arguments on the constitutionality of the individual mandate, giving him a firsthand account of the testimony provided for and against the legality of the health care mandate.

In February, Governor Pat Quinn unveiled his FY13 budget plan calling for a $2.7 billion reduction in Medicaid spending, leaving lawmakers to work out the details. However, the Quinn Administration has yet to secure the federal waiver needed to implement cost-saving reforms enacted last year that would require proof of income verification for all Medicaid applicants.

This failure to act comes with a big price tag as the Medicaid expansion in Obamacare is projected to have an unmanageable impact on Illinois' already weak budget. In January, 2012, the Civic Federation warned Illinois will face a $34.8 billion backlog of unpaid bills if no action is taken to reform Medicaid. Using the Department of Healthcare and Family Services' own projections, Medicaid will increase by more than 40% over the next five years (from $8.6 billion to $12.1 billion). Unless reforms are enacted, the Medicaid backlog will grow to $21 billion within five years.

In a November 2011 letter to Governor Quinn, twelve members of Congress, including Schock, expressed their concern about the drastic expansion of Medicaid in Illinois and the projected cost of impact to the state's budget. In total, it's projected that Illinois taxpayers will spend $10 billion more on Medicaid than they would have spent had the health law not been implemented.

"Illinois is facing the tough reality that is the consequence of a failed health care policy that was rammed through Congress two years ago. Immediately following the passage of Obamacare, states like Illinois faced enormous new costs and burdens," said Schock. "It was irresponsible two years ago to pass the president's health care bill and it would be irresponsible now for Illinois to attempt to implement further cost crushing provisions of Obamacare until the Supreme Court has reached a final decision."

"The United States Senate should follow the House of Representatives and repeal Obamacare and replace it with a solution that is workable for individual states."

Elsewhere, the state faces the challenge of how to address the creation of health insurance exchanges as mandated under ObamaCare. Complicating matters is the fact that federal exchange regulations remain unwritten and forthcoming rules may yet redefine the exchange scope, governance, and operations. Even more, proposed federal rules are silent on what states must do in order for the Department of Health and Human Services (HHS) to approve their exchanges.

"The idea of creating a costly new program with an untold number of new regulations is a non-starter in our current budget climate," Leader Cross said. "We simply cannot afford to plunge into the rabbit hole created by open-ended federal mandates put in place by the Obama Administration and cross our fingers and hope for the best. We cannot and should not move forward on creating exchanges until we know all the parameters."

"It's impossible to kick a field goal if you don't know where the goal posts are," Cross added.

Rep. Schock added, "With so much uncertainty, states would be wise to hold off on creating insurance exchanges until the Obama Administration either gets its act together -- or gets replaced."
Meanwhile, 27 states have filed joint or individual lawsuits challenging the constitutionality of ObamaCare centered on the so-called "individual mandate." The U.S. Supreme Court heard oral arguments in March, and a decision by the court is not expected until June 2012. In January 2011, Schock joined with ten other members of the Illinois Congressional delegation in writing to Attorney General Lisa Madigan requesting that Illinois join this multistate lawsuit and he was on hand in the Supreme Court chamber on the day that the arguments focused on the controversial individual mandate.

Last year, HHS estimated the cost of the health insurance exchange aid to states to be $367 billion from 2014-2021. In FY13, the budget puts the cost at $478 billion over the same time period -- a staggering increase of $111 billion over last year's estimate.

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