New York and Illinois

New York and Illinois have the most sophisticated Medicaid integration infrastructure of any states in the country. They also have some of the highest Medicare per-beneficiary costs, the most complex regulatory environments for MA plans, and the most visible urban-rural and racial equity divides in their Medicare populations. New York’s Managed Long-Term Care program is a national model for community-based LTSS coordination. Chicago’s South and West Side Medicare population is among the highest-need in any major American city. Both states are simultaneously policy leaders and equity laggards, operating integration infrastructure in their metro cores that produces almost nothing for the rural populations in upstate New York or downstate Illinois.

New York: MLTC, Integration Infrastructure, and the Five Boroughs

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New York’s Medicaid program is the largest and most complex in the country. The integration infrastructure built around Managed Long-Term Care is the most developed HCBS coordination system in the United States. MLTC plans manage community-based long-term services and supports for Medicaid-eligible beneficiaries who are assessed as needing care for more than 120 days, covering home health aide services, personal care, adult day health care, private duty nursing, consumer-directed personal assistance, and related services. Enrollment in MLTC is mandatory for dual eligible adults age 21 and older who meet the functional criteria. The program operates through three lines of business: MLTC Partial Capitation, which manages Medicaid LTSS benefits while leaving Medicare unaffected; Medicaid Advantage Plus (MAP), which integrates Medicare and Medicaid benefits through a FIDE SNP aligned with an MLTC plan; and PACE.

The MAP product is analytically significant because it represents the most mature FIDE SNP integration pathway in the country. MAP plans consist of a Medicare Advantage FIDE SNP covering Medicare services and a Medicaid managed care plan including MLTC covering Medi-Cal benefits, both operated by the same parent organization. The member receives integrated materials, a single ID card, and coordinated care management across both programs. New York’s 2026 Integrated Benefits for Dually Eligible Enrollees (IB-Dual) program extends this integration model to dual eligible individuals who do not require LTSS, allowing newly Medicare-eligible members of Mainstream Medicaid Managed Care and Health and Recovery Plans to remain in their Medicaid plan while enrolling in an aligned D-SNP through a default enrollment process.

The New York City MA market is the most complex in the country by any measure. The five boroughs contain a Medicare population of extraordinary density, linguistic diversity, and clinical acuity. MetroPlus, the plan operated by NYC Health + Hospitals, and HealthFirst serve the most vulnerable urban Medicare populations through safety-net plan models. Centers Plan for Healthy Living operates as a smaller safety-net focused plan. The academic medical center landscape, including NYU Langone, Weill Cornell, Columbia, Mount Sinai, and NewYork-Presbyterian, creates a provider competitive dynamic where each system’s MA participation strategy shapes network access for beneficiaries across the city.

The CY 2027 proposed rule’s same-parent MCO alignment provision under §422.514(h) is more consequential in New York than in any other state. New York has the largest number of MLTC-FIDE SNP combinations that do not currently have same-parent MCO alignment. If the alignment requirement is finalized and enforced, it would force restructuring of plan-MLTC relationships that have been built over years, potentially disrupting care coordination for dual eligible beneficiaries who are currently receiving integrated services through misaligned but functionally effective arrangements.

New York’s Medicaid spend-down provisions allow a broader population to access Medicaid, and thus D-SNP eligibility, than most states. The medically needy pathway enables individuals with income above Medicaid limits to qualify by “spending down” excess income on medical expenses. This provision expands the dual eligible pool and creates a D-SNP enrollment pipeline that is larger relative to the state’s income profile than it would be in a state without spend-down.

Upstate New York operates under different dynamics. Albany, Buffalo, Rochester, and Syracuse are mid-sized markets with regional health system dominance and moderate MA competition. Rural upstate, including the Adirondacks, Catskills, and southern tier, has high dual eligible rates and limited MA plan availability. The integration infrastructure that exists in the five boroughs exists almost nowhere in rural upstate New York. A dual eligible beneficiary in Hamilton County or Schoharie County navigates Medicare and Medicaid separately, without MLTC MAP enrollment, without D-SNP options, and without the care coordination that the state’s policy architecture was designed to provide.

Illinois: Chicago’s South and West Side and the Downstate Divide

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Cook County has over one million Medicare beneficiaries. The city of Chicago has an extremely concentrated and racially segregated Medicare population. The South and West Side neighborhoods carry dual eligible concentrations, chronic disease prevalence rates, and primary care access deficits that produce some of the highest-acuity Medicare populations in any major American city. The intersection of poverty, chronic disease, limited primary care access, and the health equity gaps documented in MCR-10.02 is most visible in these neighborhoods. Life expectancy differentials of 15 to 20 years between the North Side and the South Side are well documented and reflected in the Medicare utilization patterns that plans serving these areas must manage.

The health system landscape in Chicago is shaped by four major organizations with different Medicare strategies. Advocate Health (now part of Advocate Health, the merged Advocate Aurora system) has the largest integrated delivery network in the Chicago metro area. Rush University Medical Center operates an academic medical center with a safety-net orientation on the West Side. University of Chicago Medicine anchors the South Side’s academic medical presence. Cook County Health, the county’s public health system, operates Stroger Hospital and a network of community health centers serving the uninsured and Medicaid populations.

The Illinois D-SNP market is moderately developed but concentrated in Cook County. IlliniCare Health (Centene), Aetna Better Health, and Meridian Health Plan operate D-SNPs in the Chicago metro area. Downstate Illinois, the rural counties south of Interstate 80, has extremely limited FIDE SNP availability and high dual eligible rates. The downstate Medicare population is older, whiter, and poorer than the Chicago population, and it faces the same rural access constraints documented across the Rust Belt and the South.

Illinois expanded Medicaid and has a relatively advanced Medicaid managed care program. The Medicaid-Medicare coordination infrastructure in Cook County has been an ongoing policy development project. The state’s integration approach uses D-SNPs with state Medicaid agency contracts that specify care coordination requirements, but the integration depth in Illinois has not reached the MLTC-MAP level that New York has achieved. Illinois does not have an equivalent to New York’s mandatory MLTC enrollment for dual eligibles needing LTSS, which means the LTSS coordination for dual eligible beneficiaries in Illinois depends on plan-level care management rather than a structured state program.

Cost Structure and Rate Compression

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Both states have Medicare per-beneficiary costs significantly above national averages, driven by high input costs, complex patient populations, and high utilization rates in their metropolitan areas. The benchmark calculation implications are somewhat favorable: high-cost markets produce higher benchmarks, which cushions rate compression relative to lower-cost states. But the cushion is not proportionate to the input cost differential. Provider reimbursement rates in New York City and Chicago are among the highest in the country, and the cost of operating MA plans in these markets reflects labor costs, facility costs, and administrative complexity that exceed what the benchmark adjustment fully compensates.

The plan viability calculus in both states is shaped by this cost structure. Plans with strong provider partnerships and tight utilization management can operate profitably in high-benchmark markets. Plans without those capabilities face margin pressure that is more acute than in lower-cost markets because the absolute dollar amounts at risk are larger. The benefit contraction trend visible nationally in 2026 is present in both states, but the competitive density in New York City and Chicago means that benefit reductions are more likely to drive enrollment shifts than plan exits. A plan that reduces dental benefits in Miami may lose members to a competitor. A plan that reduces dental benefits in Manhattan faces 30 competitors offering alternatives.

Language Access and Equity Dimensions

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New York City’s language diversity creates the most complex language access environment in the Medicare system. The Medicare population includes large Chinese, Russian, Haitian Creole, and Spanish-speaking communities, each requiring distinct language access infrastructure that goes beyond translated materials to include culturally competent counselors, provider networks with linguistic capacity, and enrollment assistance in languages that SHIP programs do not staff for at scale. The SHIP program in New York (HIICAP) has counseling capacity in the New York City metro area but faces the same volunteer-dependent, geographically concentrated model as SHIP programs in other states.

Illinois’ Spanish-speaking Medicare population is concentrated in Chicago’s Pilsen, Little Village, and suburban Cook County, the largest non-English Medicare language group in the state. The equity infrastructure both states have built beyond federal requirements includes state-level non-discrimination protections, culturally competent care standards, and provider training programs that operate independently of the federal equity infrastructure being dismantled at the CMS level. California, New York, and Illinois are the three states with the most developed independent equity frameworks, which means their beneficiaries retain protections that beneficiaries in states without independent frameworks have lost.

Related Reading

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MCR-09_02 The FAI Is Dead: What Replaces the Financial Alignment Initiative MCR-09_04 State-by-State Analysis: Top 20 Medicare Markets and Dual Eligible Programs