Local hospitals anticipate increased costs, reduced access for everyone under Medicaid’s new rules

Illinois hospitals and physicians are bracing for impact as hundreds of thousands of people enrolled in the state’s Medicaid program stand to lose coverage under legislation that took effect Oct. 1.

H.R. 1, also known as the One Big Beautiful Bill Act, has changed the eligibility requirements for more than half a million Illinois residents covered under Medicaid, the joint federal-state health insurance program. First at risk are those who gained coverage through the Medicaid expansion under the Affordable Care Act, also known as Obamacare.

In September, the Illinois Department of Healthcare and Family Services, which oversees Medicaid in Illinois, issued letters to 700,000 enrollees outlining the changes, which will take effect in 2027. About half of those enrollees live in Cook County, according to official reports.

The change narrows Medicaid eligibility by requiring proof of employment and forcing those covered to verify their eligibility every six months instead of annually, as is currently the case. States that have tried similar requirements, such as Arkansas, have reported that additional paperwork creates costly administrative barriers and can cause people to lose coverage in error.

“Nearly 200,000 Cook County residents are likely to lose Medicaid coverage,” says Erik Mikaitis, MD, chief executive of Cook County Health, which operates John H. Stroger Jr. and Provident hospitals — two public institutions that provide 40% of charity care in the county.

“Many will lose coverage not because they are ineligible but because of new, burdensome paperwork and reporting requirements,” Mikaitis adds.

However, the cuts will ultimately affect everyone, even those with private insurance, and will lead to higher costs, sicker patients, and longer wait times in already overcrowded emergency departments, Mikaitis says.

Medical providers expect to feel the change right away.

Physicians like Kathy Tynus, MD, a primary care internist, are likely to see a surge in uninsured patients who lose Medicaid. Tynus works for Alivio Medical Center, a federally qualified health center, in Chicago’s Pilsen neighborhood. About half of the center’s patients currently have Medicaid, and the center provides care to all patients regardless of their ability to pay.

Medicaid already reimburses at significantly lower rates than commercial insurance companies. Yet, the drop in Medicaid patients will create a corresponding drop in patient revenue that the medical center cannot afford, Tynus says.

Those who lose coverage are likely to remain with Alivio Medical Center, though they may put off seeing their primary care providers or specialists without coverage. That uncertainty, coupled with potential staff shortages and longer waits, could drive people to use hospital emergency departments for services as routine as treating common colds and refilling prescriptions, Tynus says — a significantly more expensive and time-consuming way to access the health system.

“Ultimately, it’s [patients] who will suffer most,” she says. “Lack of access to primary care may lead to the worsening of people’s chronic health conditions, such as diabetes and hypertension, leading to more serious and costly outcomes, such as heart attack, stroke, kidney failure, and blindness. Not only does this increase costs, but it also adds to patients’ suffering and the loss of their ability to work and support themselves and their families,” Tynus says.

Indeed, for hospitals, the rule change will likely only worsen an already dire financial situation. Hospitals and primary care facilities throughout the Chicago area will likely feel the ripple effects of the potential Medicaid reduction.

Emergency departments initially will bear the brunt of the additional patients and costs. But the hit is certain to spiral throughout the system, affecting specialty care and adding costs to an already overburdened system, says emergency medicine physician Lauren Smith, MD, chief medical officer of Cook County Health.

“What we’re likely to see are patients at later stages of their disease and those with uncontrolled chronic conditions,” whose conditions worsen because they’ve put off care, Smith says. “These will be costly encounters for the patient but also for the health system.”

Cook County Health alone is expected to provide $485 million in charity care in 2027, a $100 million increase over 2026.

Patient advocate AnnMarie Cross is director of the Advocacy Support Center for Greater National Advocates. She says many currently covered Medicaid enrollees who cannot work due to a chronic illness will ultimately lose coverage through no fault of their own.

“It is ironic that many Medicaid enrollees are doing their best to become well enough so that they can go back to work. But the cutbacks in Medicaid will make it harder for them to recover and be able to return to work,” Cross says. “Some may not even apply to Medicaid because they are so chronically ill that they cannot manage their healthcare every week, let alone trying to work that many hours per month.”

In those situations, the person may not realize that their conditions could qualify them for a waiver or may see the waiver process as too daunting to attempt.

“These work requirements are an extra hurdle and an impediment to patients returning to work, not an incentive,” Cross says. “Our government claims to want everyone to be financially-contributing members of society, yet we continue to tear away the very safety nets that help level the playing field, so that those of us who are chronically ill are able to successfully work and contribute to society in those ways.”

Solutions are in short supply. But providers aren’t waiting for the other shoe to drop.

Cook County Health, for example, is running a marketing, advertising, and patient education blitz designed to instruct enrollees in 14 different languages on how to maintain their Medicaid coverage.

“We have trained more than 500 staff so they can help patients directly on how to navigate the changes,” Mikaitis says. The months following the midterm elections will reveal whether those efforts will need reinforcements.