Illinois Formally Applies for Family Care Waiver

The Ryan administration formally launched its effort to begin the FamilyCare health insurance program when it submitted a FamilyCare waiver last month to the Centers for Medicare and Medicaid Services, or CMS, an agency of the U.S. Department of Health and Human Services.

CMS and Illinois will discuss the waiver and negotiate any issues, and Health and Human Services Secretary Tommy G. Thompson will rule on it in May. Meanwhile, Gov. George Ryan requested authority from the General Assembly to spend the federal funds that will come if the waiver is approved to start FamilyCare during the coming year.

The waiver plan. The Illinois plan for the FamilyCare program would provide health insurance choices to over 200,000 parents or guardians of children Illinois already insures under its KidCare and Medicaid programs. Under the plan, the parents or guardians may choose either to be covered by state-administered Medicaid or Medicaid look-alike insurance or to receive a cash subsidy to help them purchase private insurance or participate in family coverage under an employer’s plan.

FamilyCare would be offered to families with income up to 185 percent of the federal poverty level (just under $34,000 for a family of four).

The waiver asks for federal funding for 65 percent of the cost of the program. Also, the waiver asks that part of the 35 percent Illinois share of the cost be satisfied by current Illinois spending on health insurance programs that currently do not receive any federal matching funds (for example, the Illinois Comprehensive Health Insurance Program). If approved, this would allow Illinois to implement FamilyCare partially within the next year without any increase in state spending. In the future Illinois would need to appropriate new state funds to complete its 35 percent share of the full program.  

Proposed state budget. If Secretary Thompson approves the Illinois waiver, federal funds will begin flowing to Illinois as soon as FamilyCare starts. Because the General Assembly has to appropriate, under Illinois law, any money to be spent on programs, even fully federal money, Governor Ryan included an appropriation of $40 million for the start of FamilyCare in his proposed budget for the 2003 Illinois fiscal year.

This appropriation assumes a January 1, 2003, start-up date for FamilyCare to allow the state the lead time needed to prepare to administer the new program. It would not be spent if the waiver is not approved. It would fund an initial phase of FamilyCare to cover the lowest income group and reach 80,000 families.

Full implementation. The full expansion of FamilyCare up to 185 percent of the poverty level to reach 200,000 people would require new state spending in future state budgets. The new state spending would still be only about a quarter of the total cost of the program. Though not mandated under current law, this new spending requires the commitment of a new governor and General Assembly.

For more information, contact John Bouman, National Center on Poverty Law, 312.263.3830 ext. 250.

Illinois Welfare News
March 2002