Immigrant health care programs boosted hospital bottom lines, study suggests
SPRINGFIELD – Two state-run health care programs that extend Medicaid-like coverage to noncitizens may have provided significant financial benefits for Illinois hospitals.
That’s according to preliminary results of an ongoing study at the University of Chicago that suggests the programs corresponded, at least in part, to a 15% reduction in the amount of bad debt Illinois hospitals incurred each year since the programs have been in full effect.
“The number that we find is a 15% reduction,” Aresha Martinez-Cardoso, an assistant professor and researcher at U of C’s Embodying Racism Lab, where the study is being conducted, said in an interview. “We think that that might be a high estimate, given what we know about perhaps other things that are going on that we can’t entirely rule out, but we do think that part of that reduction is associated with the policy.”
That translates to an average of $1.5 million per year, per hospital, according to the report, although the exact amount would vary greatly depending on a hospital’s size and the volume of patients it treats who are covered by the programs.
“Our early findings show that this landmark policy isn’t just about access — it also serves as a strategic investment in our hospitals and the health of entire communities,” Martinez-Cardoso said.
Those findings come as Gov. JB Pritzker’s administration is preparing to shut down the larger of the two programs as part of his budget proposal for the upcoming fiscal year. The Health Benefits for Immigrant Adults, or HBIA, currently covers more than 31,000 eligible noncitizens aged 42-64, at a cost of about $21 million per month, according to the most recent data from the Department of Healthcare and Family Services.
The other program, Health Benefits for Immigrant Seniors, covers eligible noncitizens aged 65 and over. That program currently covers about 8,900 individuals at a cost of about $10 million per month. Pritzker has not proposed eliminating it.
The programs were launched in 2020 and 2021, during the COVID-19 pandemic, as a means of extending health coverage to individuals who did not qualify for other publicly funded health care programs solely due to their immigration status. Those include individuals who are in the United States without legal authorization as well as certain legal permanent residents who have not yet been in the country long enough to qualify for Medicaid.
The programs have been controversial since they were first proposed. Republicans have been especially critical, saying the programs serve as an incentive for immigrants to cross into the United States illegally and settle in Illinois to receive taxpayer-funded health benefits.
With the state facing slow revenue growth and a projected budget deficit in the coming year, Pritzker surprised many of his supporters in February when he proposed closing the HBIA program.
Eliminating the program for middle-aged adults is projected to save the general revenue fund about $330 million, according to the governor’s office. Pritzker told reporters after his address in February he expects the federal government will stop reimbursing states for costs associated with programs providing services to noncitizens.
A week after the governor’s budget address, the Illinois Auditor General released a report that said enrollment in both programs and their eventual costs had far exceeded their original projection. The cost for the two programs, the report said, exceeded $1.6 billion over the course of four fiscal years.
Read more: Audit finds Illinois’ noncitizen health care programs far outstripped original cost estimates
Unlike Medicaid, which is jointly funded with state and federal funds, the health programs for noncitizens are funded almost entirely with state dollars.
The study looked at publicly available hospital financial reports to analyze changes in the amount of uncompensated care they provided from 2017 to 2023. It also looked at similar data from hospitals in Indiana and Wisconsin, neighboring states that do not provide health benefits for noncitizens.
“We tried to flip it a few different ways,” Martinez-Cardoso said in an interview. “There could be a lot of other things happening. But when we test a bunch of different models … we kind of see a consistent pattern that the policy timing is associated with bad debt.”
She said the results so far are only preliminary and that analysis of the data is continuing. But she said the analysis so far shows a strong link between the enactment of the programs and an overall reduction in uncollectable debt.
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