As Illinois Gov. JB Pritzker looks to end a state health insurance program for low-income immigrant adults held up as a national model, a new preliminary study suggests providing coverage actually gives hospitals a financial boost and can help all patients.
Illinois insures around 40,000 people who don’t have legal status in the U.S. or don’t otherwise qualify for comprehensive public health insurance, such as Medicaid and Medicare. The goal: to prevent an expensive trip to a hospital emergency department by paying for preventative care.
That effort has had a domino effect. In a new study, researchers at the University of Chicago and the University of California in Los Angeles found what’s known as bad debt, or debt hospitals fail to recoup, declined on average 15% across Illinois from 2021-23 — and potentially as much as 25% at hospitals in counties with the highest enrollment in the state’s immigrant health plans. For the average hospital, a 15% drop in bad debt is around $1.5 million.
Aresha Martinez-Cardoso, an assistant professor of public health sciences at U of C who led the team of researchers, also compared Illinois to Indiana and Wisconsin from 2017-2023, a period that spans before and after the Illinois health insurance programs for immigrants started. The neighboring states did not have this type of program, and bad debt for hospitals there stayed relatively the same, the study found.
The decrease in bad debt in Illinois happened in part because thousands of immigrants were insured, the study found. In other words, hospitals were paid for the medical care they provided, instead of having to bill uninsured patients who couldn’t afford to pay for their care or wouldn’t pay, adding to debt piling up at hospitals.
Martinez-Cardoso said she hopes her research provides a snapshot of the short-term impact of insuring immigrants.
“Sometimes you have to spend money to save money in the long term,” Martinez-Cardoso said in an interview. “And it’s in line with our values as a state to take care of our residents.”
Andrea Kovach, an attorney at the Shriver Center on Poverty Law, which advocated to create state health insurance first for low-income seniors regardless of their immigration status in 2020, said the study is one of the only reports to demonstrate how insuring immigrants in Illinois has helped hospitals financially, and what’s at stake if that goes away.
The study comes as Illinois lawmakers negotiate a state budget that starts July 1. Due to budget pressures and uncertainty around federal funds for a variety of programs, Pritzker did not include the Health Benefits for Immigrant Adults program in his proposed budget in February. The program insures low-income people who are 42 to 64 years old.
The move has sparked outcry from some advocates, lawmakers and patients, though some Republicans have questioned why the state is covering medical costs for people who aren’t U.S. citizens.
More than 30,000 immigrants are set to lose coverage starting July 1. The program cost the state about $487 million in 2024. It started in 2022, when Pritzker expanded the state’s immigrant health insurance program to people as young as 42. He’s proposed to keep insuring low-income immigrant seniors who are at least 65.
A spokeswoman for the Illinois Department of Healthcare and Family Services, which administers the immigrant health insurance plans, declined an interview request with top officials. In a statement she said the programs have provided “critical healthcare access for thousands of previously uninsured Illinois residents, which in turn assists providers who serve those customers.”
Illinois State Sen. Graciela Guzman, a Chicago Democrat, said she hopes the study bolsters the argument that the state should keep insuring immigrants. The findings illustrate how the programs have helped stabilize the health of communities, she said, recalling a 46-year-old immigrant who is getting chemotherapy to treat leukemia. He is set to lose his state health insurance.
“The backup plan for that family is potentially moving away,” Guzman said. “It is selling everything that they own. It is like really incredibly terse decisions about how they can pool money together to ensure that the husband, the father, their family member, can have the care that he needs in July.”
When hospitals accumulate debt, that could hurt everyone. They might have to cut services or reduce access to medical care in other ways, according to Martinez-Cardoso’s preliminary findings.
Less bad debt across the health care industry helps control costs for every patient, from rich to poor, Martinez-Cardoso said. And it affects the kinds of services available at your local community hospital.
“Are they able to hire more OB/gyns? Do I have to wait a month to see somebody, or three months to see somebody, or do they have the kinds of equipment that I need?” Martinez-Cardoso said.
As lawmakers put together the state budget, Martinez-Cardoso said she hopes her findings inform their decisions.
Kristen Schorsch covers the health of the region for WBEZ.