Medicaid enrollment, spending soar in Illinois as Congress weighs cuts
Expansions to Medicaid because of the Affordable Care Act and COVID-19 have increased the program in Illinois as Congress considers potential cuts or work requirements.
As Congress considers reforms to Medicaid, the structure of a program covering more than 3 million low-income Illinoisans remains uncertain.
Medicaid expanded significantly in Illinois because of the Affordable Care Act, commonly known as Obamacare, and during the COVID-19 pandemic. Its costs have more than doubled in Illinois since 2010. Today, it covers nearly 1-in-4 Illinoisans at a cost of $32 billion, of which about $13 billion comes from state funds.
The Republican majority in the U.S. House of Representatives recently passed a budget resolution, by a narrow vote of 217-215, instructing the House Energy and Commerce Committee to cut at least $880 billion in costs by 2034. Based on previous proposals by House Republicans, some of that figure will come from Medicaid reforms aimed at increasing efficiency or reducing waste.
With so many Illinoisans enrolled in Medicaid and at such a high cost, here is everything you need to know about the program in Illinois.
What is Medicaid and how has it expanded?
Medicaid is a joint federal-state health insurance program covering adults, children and seniors with limited incomes. In most states, including Illinois, those with incomes up to 138% of the federal poverty line – about $44,350 for a family of four – are eligible for Medicaid. The federal government provides most of the funds and sets baseline standards, while state governments primarily manage and partially fund the program. States have significant latitude in determining benefits and eligibility. In total, the federal government spent over $600 billion on Medicaid in 2023, or about 69% of total expenditures.
The Affordable Care Act expanded Medicaid by allowing states to expand coverage to individuals with incomes up to 138% of the federal poverty line. Illinois adopted the expansion in 2014, joining 40 states and Washington, D.C. The federal government finances the expansion, paying 90% of the costs for the newly eligible population, compared to just over half for traditional Medicaid recipients. About 900,000 Illinois Medicaid enrollees, or 30%, are covered under the Medicaid expansion.
Medicaid expanded again during the COVID-19 pandemic. Congress increased the federal Medicaid matching rate and required states to maintain continuous coverage for Medicaid beneficiaries for the duration of the “public health emergency.” During this time, Medicaid enrollment in Illinois grew by about 1 million. Since the continuous enrollment provision ended in March 2023, Illinois has disenrolled almost 700,000 people who no longer qualify for the program. Nevertheless, Medicaid and Children’s Health Insurance Program enrollment is 12.4% higher than before the pandemic. Illinois and Maine have the highest Medicaid renewal rates at 90%, following the end of pandemic provisions.
Growing enrollment and spending in Illinois
About 3.4 million Illinoisans received health care coverage through Medicaid in 2024. Total Medicaid spending in Illinois has dramatically increased from less than $15 billion before the Affordable Care Act in 2010 to more than $32 billion since the COVID-19 pandemic.
Enrollment in Medicaid in Illinois has also risen significantly in recent decades, from about 1.4 million in 2000 to 3.4 million in 2024.
The federal and state amount and shares of Medicaid spending varies widely by state. In Illinois, the federal share of Medicaid spending is 65.2%, while the state pays the remaining 34.8%.
Additionally, states are incentivized to tax in-state health care providers to draw more federal funds for Medicaid, with Illinois’ tax on managed care organizations bringing in an extra $1.1 billion. About half of these funds cover existing Medicaid expenses, while the other half supports new spending.
There are no work requirements for Medicaid in Illinois. During the first Trump administration, the federal government approved 13 waivers allowing states to pursue work requirements for Medicaid. Georgia’s waiver is the only one currently implemented, and Illinois never even applied for such a waiver.
By increasing employment rates among low-income Illinoisans, Medicaid work requirements could improve more peoples’ health and provide them with more opportunities. Employment status is linked to fulfillment, physical health, and social outcomes.
Conclusion
With such narrow Republican Congressional majorities, the future of Medicaid in Illinois is unclear. As Congress considers implementing work requirements to Medicaid, research shows fewer than half of Medicaid recipients work enough to qualify if the program were to add a work requirement. The direction the federal government takes could affect millions of Illinoisans, as well as program costs supported by state taxpayers.
Research shows work requirements have improved employment and income outcomes for enrollees in welfare programs such as Temporary Assistance for Needy Families. Also, 71% of Americans support adding work requirements to Medicaid.
Congressional Republicans are right to examine and reinvent a program that has grown so rapidly.