07/09/2010 05:52 pm ET | Updated May 25, 2011

Questions About the Illinois Auditor General's Look at Covering All Kids Health Insurance

This May the Illinois Auditor General released an audit of the Covering All Kids Insurance Act expansion population of the All Kids program, Illinois' comprehensive and affordable health insurance program for all uninsured children, which benefited over 1.67 million kids in 2009 and has garnered bipartisan support in the state General Assembly over the last several years. The Sargent Shriver National Center on Poverty Law recently released a brief examining the scope of the audit and the conclusions made by the Auditor General. Instead of providing helpful information to Illinois legislators and citizens on the program's expenditures of money and awards of contracts, as directed by the law authorizing the audit, it overreaches into policy issues beyond its legislative authority and unwisely recommends changes to the All Kids program that, if implemented, would contradict health policy experts and jeopardize billions of federal Medicaid match dollars.

The legislative purpose of the audit was to monitor expenditures of money and awards of contracts under the program, not to evaluate public policy. However, the Auditor General chose to focus the overwhelming majority of his attention on the public policy behind the Covering All Kids Insurance Act (to cover all children) and the carefully researched administrative policies regarding enrollment and retention in the program that have been adopted by the Department of Healthcare and Family Services (DHFS). It is unclear why the Auditor General assumes that the General Assembly was inviting an audit of its own public policy choices, and by doing so, second guesses the implementation choices made by DHFS experts on these matters. Moreover, the requirement of an annual audit for a subset of a state Medicaid program is unusual, administratively costly, and not supported by any data or legislative finding. The Covering All Kids Insurance Act--which provides coverage to less than 6% of the total All Kids population--was unjustifiably singled out for this scrutiny.

The Auditor General's critique of Illinois' use of passive renewal and 12-month continuous eligibility, and his other recommended changes to the enrollment procedures contradict national health policy experts and federal health leaders. If implemented, these recommendations could result in eligible kids being dropped from coverage, leaving them less likely to receive treatment for chronic conditions such as diabetes and asthma, and more likely to have poorer health, greater rates of avoidable hospitalizations, higher mortality rates, delays in necessary care, and unfilled prescriptions. At the same time, many of these recommendations, if implemented, could jeopardize federal Medicaid match money under the maintenance of efforts requirements of the stimulus law and federal health reform--at a loss of billions of dollars for Illinois.

The audit spends much time complaining about the lack of documentation in case files differentiating the types of immigrant children covered by the program, because, according to the audit, the correct documentation would entitle the state to federal matching funds that Illinois would otherwise forgo. However, the difference in documentation among immigrant children did not become relevant to federal financing until Congress passed CHIPRA in January 2009 allowing federal matching funds for certain immigrant children for the first time. The Auditor General paid insufficient attention to the fact that DHFS can retroactively obtain the documentation needed to maximize and claim these federal funds for the time period in question. Similarly, the Auditor General failed to mention that the expansion population of the Covering All Kids Insurance Act has been entirely paid for by offsetting spending reductions elsewhere in the state's medical assistance programs, as intended by the General Assembly when it passed the law.

Hardworking Illinois families know far too well today's economic reality and the importance of their children's health insurance. We owe Illinois families a complete, accurate picture of the All Kids program, including a thoughtful real-world analysis of how over 1.6 million Illinois children and their families would be affected by implementation of the auditor's recommendations.