Slashes to Safety Net Programs: The Impact on Low-income and Immigrant Illinoisans

By Danita Hingston, VNA Foundation Intern

Since its inception the pandemic has had a disproportionate effect on low-income people, including those in immigrant families, leading to many families facing increased economic hardships and health inequities. Amid rising cost of living and widening socioeconomic disparities, social programs like government-sponsored health insurance and food assistance (Supplemental Nutrition Assistance Program or SNAP) play a crucial role in allowing vulnerable people to meet their most basic health and financial needs. Several of these social programs were expanded over the past few years at federal and state levels to help mitigate the effects of the pandemic, but they are now facing cutbacks.

Health Benefits for Immigrants

In 2020, Illinois established a health coverage program for people 65 years and older who have undocumented status or hold green cards but have not completed the five-year waiting period to be eligible for Medicaid. The program, known as Health Benefits for Immigrant Seniors (HBIS), was created by the state’s Department of Healthcare and Family Services to advance its mission to improve health equity.  In 2022, the Health Benefits for Immigrant Adults (HBIA) program was established to cover younger adults, ages 42-64 years. The coverage included $0 premiums and $0 copays. It also covered comprehensive services such as doctor and hospital care, lab tests, physical and occupational therapy, mental health and substance use disorder services, dental and optical care.

Of the 63,255 people enrolled in the two programs, more than half (32,612) are HBIA beneficiaries, indicating the need for this program. Access to healthcare coverage allows immigrants to receive life-saving care such as early detection and treatment of illness. In addition, they can access preventive care and afford necessary medication, allowing them to live in the U.S. safely and as productively as they are able. For elderly immigrants, health coverage enables them to age in their own homes and communities, reducing the need for costly and often substandard institutionalized care.

Nutrition Assistance Program

SNAP is the largest federal nutrition assistance program for eligible low-income individuals and families. It was expanded during the pandemic via Emergency Allotments (EA), which provided an additional allowance of at least $95 per month to SNAP households. States were allowed the option to receive EA SNAP funds from the Federal Government to distribute to their eligible households, and Illinois was one of 32 states that participated in this opportunity. Among the social protection programs offered in the state, SNAP has the highest participation rate. According to the Center on Budget and Policy Priorities over 67% of Illinois’ SNAP participants are in families with children and more than 30% are in families with members who are elderly or disabled.

Importance of Safety Net programs

Initiatives like HBIS, HBIA and SNAP are crucial because they target the socioeconomic and structural determinants of health (e.g. social policies), creating a safety net for low-income and marginalized people. Health insurance and additional nutrition assistance help to alleviate poverty and they ensure income is directed to other household needs. For example, a report by the Urban Institute found that the enhanced SNAP benefits kept 4.2 million people above the poverty line in the final quarter of 2021, and had the greatest impact on lowering poverty rates among recipients who were Black and Latino. Safety net programs also positively impact the economy as they influence demands for other services, which can stimulate economic growth.

The state and federal governments have recently implemented changes to the HBIS and HBIA programs, and to SNAP benefits, respectively, despite the well-established benefits of these programs. These modifications are anticipated to have dire effects on the health and wellbeing of vulnerable people in Illinois.

Restrictions to Health Insurance Benefits for Immigrants

Effective July 1, the state implemented changes to its Health Benefits for Immigrants programs. HBIA enrollment will be paused for Fiscal Year (FY) 2024, and HBIS enrollment will be paused when the number of enrollees reaches 16,500. Although those who are already enrolled in HBIA and HBIS will still have health coverage, other changes have been introduced to limit program costs such as co-pays of $100 for emergency room visits and $250 for inpatient hospitalization.  There is also a 10% coinsurance for hospital or ambulatory surgical treatment center outpatient services.

The decision to amend these programs was characterized as a cost-cutting measure. Initial assessments in February 2022 estimated the cost of the state-funded HBIA at $220 million; just three months later, however, the costs had risen by five-fold ($1.1 billion) as enrollment exceeded expectations. In an issued press statement, the Department of Healthcare and Family Services stated that the decision to scale back the programs was to ensure they do not exceed the funds authorized by the General Assembly for FY 24.

HBIS and HBIA are Medicaid-style programs, which indicates that they were created for a population who by definition are low-income. With the implementation of an enrollment cap on HBIS and closed enrollment for HBIA, Illinois will face increasing numbers of uninsured people. Furthermore, the healthcare safety net system, including hospital emergency departments, will very likely become overburdened.

Due to their legal status, many undocumented people often engage in precarious labor and earn menial wages. Paying for healthcare out-of-pocket will most certainly be too expensive for many people. For those who are already enrolled, the co-pays will also be unaffordable, forcing many to forgo life-saving treatments such as acute care, chronic illness management, and mental health services. For example, findings from the Urban Institute’s Well-Being and Basic Needs Survey in 2020, revealed that 25.7% of adults in immigrant families reported that a family member did not get needed medical care because of costs. Lack of affordable healthcare will likely have the greatest impact on seniors as they are more susceptible to illness. As we have witnessed, older adults have been disproportionately affected by COVID-19, which makes it crucial to ensure that all seniors in Illinois have health insurance, allowing them access to vaccines and other preventive and health maintenance services.

Although governments must work within budgetary restraints, cuts to cost-saving health services seem counterproductive. 

Rolling back SNAP Benefits 

SNAP is another safety net program that has been affected by budget changes. March 1st of this year marked the end of the EA pandemic-related benefits for Illinois residents on SNAP. Recipients’ benefits have been reduced by $95 to $250 per month. This change has impacted 2 million Illinoisans who receive SNAP benefits, and comes as the costs for groceries, housing and energy have been sharply increasing.

For immigrant households, accessing SNAP benefits has come with a myriad of challenges over the past five years.  In 2019, the Trump Administration expanded the Public Charge rule that deems an individual ineligible for lawful permanent resident status if they use certain essential public benefits, including food assistance. Consequently, immigrant families became suspicious and feared the use of any public benefits, and members who were still eligible for assistance programs, such as children who are US citizens, were often deterred from participating out of fear of being ruled as a public charge. The Biden Administration, however, overturned the expanded Public Charge rules from the Trump era, ruling that the use of non-cash programs like SNAP will no longer be considered when making Public Charge determinations. This change and the Emergency Allotments enabled many immigrant families to enroll in SNAP, offering much needed financial relief. Reducing SNAP payments now, when families have just begun receiving them and are still dealing with the economic impact of the pandemic, will likely challenge many households’ ability to pay for food, rent and other necessities.

Although it is still quite early to analyze the long-term impact of ending expanded SNAP benefits, preliminary data from the Household Pulse Survey indicates that food insecurity in states that implemented the Emergency Allotments is now at the same level as states that did not expand benefits. Lack of food or consistent access to food has especially serious consequences for children, whose development can suffer from poor nutrition and trauma. It also impacts society, which will be harmed by increased healthcare and workforce costs (e.g. absenteeism, loss of productivity), as well as a future generation of adults who were not offered a healthy childhood.

The Way Forward 

The COVID-19 pandemic brought political and public attention to the need for strong and supportive public health and safety net programs. It also highlighted the imperative for program adaptability and policy changes to respond to families’ needs. Taking into account the current changes in safety net programs, more work is needed to advance the right of every person to feel safe and secure, including immigrants who are undocumented and their families.

Looking forward, a focus on effectively responding to structural barriers to healthcare is needed. This requires action from policymakers who are committed to expanding safety net programs, which the State of Illinois and the Federal Government demonstrated during the Public Health Emergency period. With the introduction of the HBIS and HBIA programs, Illinois took an important step toward landmark structural reform. In fact, Illinois has shown over the past few years that it is a state that champions health equity, and it has become one of the most welcoming states in the nation. As lawmakers and state leaders address problems around illegal immigration and safety net program budgets, we must be unequivocal about the state’s long-standing social justice approach to addressing these issues and take pride in, and build on, our successes. When people are healthy and are contributing to the economy, society as a whole benefits. Irrespective of an individual’s legal or socioeconomic status, everyone has a right to quality healthcare, a decent standard of living, and a safe environment in which their families can thrive.