Wednesday, June 01, 2005

56,000 parents get health insurance for $7 million?

Press accounts here and here peg the cost at getting health insurance to 56,000 more people in Illinois at between $6 million and $7 million. The extra people get insurance by raising the income limits of Illinois' Medicaid program, FamilyCare. This has been one of Governor Blagojevich's main priorities, to his credit, and the Democratic legislature is delivering.

I'm surprised by how cheap it is to buy health insurance for working families, if these numbers are accurate. $7 million divided by 56,000 people is $125 per person. That's per year of health insurance.

Wow.

If the cost of health insurance through FamilyCare is really $125 per person, then we should just expand Medicaid to everyone in the state in the name of economic development. Move your business to Illinois and your employees have health insurance!

UPDATE: Just got an email from a policy wonk lobster who shall remain nameless. The money (only $5.75 million out of GRF) doesn't kick in until 1/1/06, halfway through the fiscal year, so we're really only buying 6 months of coverage. And the federal match is actually 66-33, so the almost $6 million in state money buys $12 million in federal money.

So it's really a total of about $35 million to buy insurance for 56,000 people for a year. That's $625 per head. Still very cheap.

UPDATE AGAIN: A federal friend of mine reminded me that there's a drop-off rate, based on the percentage of eligible people who actually enroll. While the income eligibility will increase to 185 percent of the poverty line, lots of people who are eligible for the program just don't sign up. Who knows why. Figures are hard to come by, but perhaps 50% of people who could get it, don't. So the actual cost is doubled (if everyone signed up, costs would go up too). $70 million to buy insurance for 56,000 people is $1250. Still, much cheaper than private insurance.

Medicaid for all! How much would that cost?

2 comments:

Cal Skinner said...

Perhaps you can discover the federal match, which will lead to the true cost.

Dan Johnson-Weinberger said...

Of course. That's an excellent point, Cal. Isn't it a 50-50 match? So the cost is $14 million or $250 a year (assuming the $7 million is accurate). Still, dirt cheap.

So, with some quick research, the basic match is 50-50, but some states get a better return. Illinois is stuck with a 50% match.