Quick Hit Adam Doster Tuesday March 23rd, 2010, 1:05pm

The Cost Of A Medicaid Expansion

Gov. Pat Quinn says he is still waiting for numbers from the state about how much the the Medicaid expansion passed in the Senate health care bill will cost Illinois. But with the Senate poised to change how the expansion is funded through the budget reconciliation process, we wanted to update our previous back-of-the-envelope estimate.

The Illinois Medicaid program cost $12.6 billion in FY 2007. That includes the combined contributions of both the state and federal government. At that time, there were approximately 2.42 million enrolees, meaning the cost per patient is roughly $5,227. If 500,000 additional folks in Illinois are granted access (which is close to most estimates), that will increase the overall cost by approximately $2.6 billion annually. Herein lies the $2 billion figure that Republicans are claiming the expansion would cost the state over the next decade.

The crucial context they've chosen to leave out, however, is that that the federal government will pick up the tab for most of the extension. After covering the full cost until 2016, Washington will cover 95 percent of the expansion in 2017, meaning Illinois would need to pay an additional $130 million that year. In 2018, the federal assistance drops to 94 percent, costing Illinois $156 million. In 2019, it drops one more percentage point, adding $183 million to the state budget. That means the grand total Illinois would owe, between 2014 and 2019, will be approximately $469 million. Thought about another way, Illinois will extend health coverage to about 5 percent of its population at a cost of just $40 per person annually. 

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