CHICAGO -- Cook County, Ill., which operates one of the largest public health systems in the country, is relying on a provision in the new federal health care law to help cure chronic deficits.

The county’s Chicago-area health and hospital system accounts for 36% of the $3 billion county budget. The system’s fiscal 2013 deficit is $152 million, making up the bulk of Cook’s overall $268 million shortfall, county budget director Andrea Gibson said Tuesday in a talk in downtown Chicago.

To offset the health system’s annual losses, the county has been forced to subsidize it every year. The 2010 subsidy totalled $389 million. The 2011 subsidy totaled $276 million, and the county chipped in $254 million in the current year budget. The county expects to contribute another $254 million in fiscal 2013, Gibson said.

But the annual subsidies could be significantly cut under the Medicaid expansion program that is a key part of the Affordable Care Act. The county hopes to begin reaping the benefits of the expansion in fiscal 2013 with federal approval of a waiver that allows it to expand Medicaid enrollment a year ahead of the formal start of the new law in 2014, Gibson said.

If approved, as expected, the county could begin to enroll up to 100,000 newly eligible patients in the Medicaid program as soon as October.

The expansion could boost revenue by 11% next year, according to one local report. County officials have declined to name a specific projection. But they are counting on the waiver -- which is widely expected to be approved -- to make a deep cut into the $152 million deficit and annual county subsidies, Gibson said.

“This source of revenue will be critical to stabilizing the health system,” Gibson said at a talk in front of civic organization the Chicago City Club. “We can see for the first time the possibility that we could substantially reduce the county’s subsidy.”

Gibson said the county is also urging physicians to bill more patients who can pay, an initiative that is expected to mean $13 million more in revenue next year. Increased physician billing and the federal Medicaid expansion are two key pieces of raising new revenue next year, she said.

Meanwhile, an improving economy has meant less of a hit from the gradual reduction of Cook County’s sales tax rate, Gibson said.

County Board President Toni Preckwinkle won election in 2010 after promising to roll back a hugely unpopular 1% sales tax increase implemented under predecessor Todd Stroger. The county in January will roll back the final 0.25% piece of the increase.

County analysts expect to lose roughly $80 million next year due to the 0.25% rollback, $10 million less than projected a year ago, Gibson said.

“We’ve had our share of people telling us we’re foolish” for reducing the tax, said Gibson, a deputy budget director under former Mayor Richard Daley who joined Preckwinkle’s administration in May 2011. “But we’ve been pleasantly surprised to see the sales tax revenue rise more than our projections.”

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