PI Original Matthew Blake Friday May 25th, 2012, 3:58pm

Medicaid: Cuts Now, Some Revenue Soon? (UPDATED)

The General Assembly stayed in session until late Thursday evening to pass a bill that would lop off $1.6 billion from the federal-state Medicaid program that serves 2.7 million Illinois residents. But while state lawmakers worked overtime to enact Medicaid cuts, they just introduced a bill this afternoon that hikes the state cigarette tax and, combined with the cuts, would cover the state’s $2.7 billion in unfunded Medicaid liabilities.

The General Assembly stayed in session until late Thursday evening to pass a bill that would lop off $1.6 billion from the federal-state Medicaid program that serves 2.7 million Illinois residents. But while state lawmakers worked overtime to enact Medicaid cuts, they just introduced a bill this afternoon that hikes the state cigarette tax and, combined with the cuts, would cover the state’s $2.7 billion in unfunded Medicaid liabilities.

Gov. Pat Quinn, the Illinois Hospital Association, and advocates for the poor, elderly and disabled who depend on Medicaid all are pushing for the tax, and the consensus is that the tax will pass eventually. “My impression is that it will happen,” says Jim Duffet, executive director for Campaign for a Better Health Care.

As of this late this afternoon, the bill cleared a House committee and is being debated on the House floor. * The status of the bill – ‘SB 2194’ – can be monitored at the Illinois General Assembly Web site.

It is a frenetic and chaotic schedule, as the state must do Medicaid, major changes to the public employee pension program, and a budget for next fiscal year all by next Thursday, the last day of the spring legislative session. The legislature will continue to meet over Memorial Day weekend.

State Sen. Heather Steans (D-Chicago), the Democratic head of a working group that hatched the new fiscal approach to Medicaid, says that she does not anticipate a Senate vote until early next week.

“They still need to round up enough Republican votes,” Stean says. Illinois Senate Republicans have been the group most vocally against the tax.

In February, the Illinois House passed a resolution that the state must address its unfunded Medicaid liabilities by next fiscal year, which begins July 1.

In Quinn’s framework – which state legislative leaders appear inclined to follow – the state will pay off its liabilities first through $1.36 billion in cuts and eliminations of Medicaid programs plus $240 million in cuts to Medicaid providers – the two components of the $1.6 billion bill state lawmakers passed yesterday.

Under the framework, another $100 million will come in revenue from hospital assessments, $300 million will be taken from unspent fiscal year 2012 money – and $700 million will come from increasing the cigarette tax by a dollar a pack.

While critical of the overall Medicaid package, advocates have supported the cigarette tax hike. Joseph explains that without the tax on smokes, “There would be intense pressure to cut elsewhere to reach the $2.7 billion target.”

Quinn said in a statement released last night that “there is more work to do.”

“The General Assembly must move quickly to pass legislation to add a dollar a pack to the cost of cigarettes, which – combined with today’s legislation – will achieve the necessary $2.7 billion in savings to rescue Medicaid,” the statement read.

Quinn’s revised framework won him the support of safety net hospitals that primarily care for low-income patients as well as the greater Illinois Hospital Association lobby. However, Hospital Association spokesman Danny Chun stressed in an interview that the association endorses the overall package of Medicaid bills. If one bill, including the cigarette tax is yanked, so then is the support of hospitals.

The bill that passed last night is largely identical to the package Progress Illinois reported on Tuesday – provider cuts are not as great as they were once anticipated to be, but they are still severe cuts to programs.

This includes eliminating the Illinois Cares RX prescription drug program to seniors, which will hit 180,000 residents.  Other cuts were fleshed out in a report Wednesday by Voices for Illinois Children.

These include the elimination of family care for some low-income parents, and an income limit placed on children who are technology-dependent and rely on Medicaid for equipment like ventilators. Also, the package passed last night places a four prescriptions-a-month limit on Medicaid recipients.

Many progressive health care advocates have been up in arms ever since Quinn gave a February budget speech that approvingly waved a report in the air by the Chicago Civic Federation, which called for major Medicaid cuts.

Advocates acknowledge the state’s fiscal mess, but would like to see a focus on the revenue side of the budget, such as expanding the state sales tax base and rolling back tax breaks to companies like the CME Group, Inc.

“We have been frustrated from the beginning of this debate,” Duffet says.

* UPDATE 1 (5/25/12, 4:10 p.m.): The cigarette tax bill passed the full House.

Comments

Log in or register to post comments