Originally Posted Online: April 19, 2012, 1:06 pm
Last Updated: April 20, 2012, 9:36 am
Quinn plan calls for Medicaid cuts, tax hike
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SPRINGFIELD, Ill. (AP) — Gov. Pat Quinn, trying to close a $2.7 billion hole in the health program for poor Illinoisans, offered a plan Thursday that would toss about 215,000 people off Medicaid, raise cigarette taxes and cut payments to doctors and hospitals.
The Democratic governor says the dramatic changes are needed "to save the entire Medicaid system from collapse."
They're certain to trigger vigorous opposition, however. Top Republicans in the General Assembly immediately spoke out against the tax increase, the influential Illinois Hospital Association opposes rate cuts, and many advocates for the poor will fight the move to reduce services.
Democratic legislative leaders didn't exactly embrace the proposal, saying more work needs to be done before lawmakers reach a consensus. But the plan did get a thumbs-up from the Chicago-based Civic Federation, which called it a reasonable response to the crisis situation.
The proposal would end prescription drug coverage for about 180,000 senior citizens and tighten income guidelines so some 26,000 adults no longer qualify for medical services.
In addition, a variety of services deemed optional by the federal government would be eliminated or restricted. They include adult dental care, elective cesarean sections and the number of prescriptions people can receive.
Quinn, who also plans to propose a major pension overhaul on Friday, called for raising the tax on cigarettes by $1 a pack to generate about $337 million. That money would then go into the Medicaid program and be matched dollar-for-dollar by the federal government. The tax is currently 98 cents a pack.
The American Cancer Society applauded the tax proposal. The group estimated it would keep 72,000 minors from becoming smokers and persuade 53,000 adults to quit.
The minority leaders in the Illinois House and Senate said they oppose any tax increase to support Medicaid. Rep. Tom Cross of Oswego and Sen. Christine Radogno of Lemont noted that when Quinn called in February for action on Medicaid, the governor talked only about "reducing expenditures" and said nothing about a tax increase.
"We agreed with him and will hold him to his words," the two Republicans said in a statement.
Rates to health care providers would be cut by $675 million, or roughly 8 percent. Aides to the governor said the proposal doesn't specify how much should be cut from each type of provider, leaving room to negotiate issues such as whether hospitals that serve poor areas should be spared.
Julie Hamos, director of the state Department of Healthcare and Family Services, told The Associated Press that the plan also includes a "very aggressive" push to knock ineligible people off the Medicaid rolls. That could cut about 100,000 people from the program, which now serves 2.7 million Illinois residents, she said.
Medicaid is one of several trouble spots for the state budget. Costs have climbed dramatically over the years, and the state doesn't have enough money to keep up. Illinois will have $4 billion in unpaid Medicaid bills by this time next year unless officials take action now, the Quinn administration says.
Quinn asked a group of legislators to hammer out a plan for fixing the problem, but they have been unable to agree so far. Sticking points include differences about which services can be cut and whether to raise taxes.
So Quinn decided to release his own proposal to reach the $2.7 billion target. The administration says cuts in service and eligibility account for half of the $2.7 billion, lower provider payments make up one-quarter and the cigarette tax and federal matching funds account for the remaining quarter.
"We have to have members of the General Assembly step forward and do important things — not just for now but for the future and the common good of the people of Illinois," Quinn said at a news conference.
He jabbed at Republican opposition to the tax increase by noting that Illinois' last three GOP governors raised the cigarette tax a total of five times.
Republicans legislators on the panel trying for two months to come up with a Medicaid plan were quick to reject Quinn's tax proposal and his call to cut pay for providers. They said that with more time, the working group can come up with an alternative. The possibilities include: a bigger push to get ineligible people out of the program, a faster switch to HMO-style management of care and more restrictions on services that aren't mandated by the federal government.
"We can get to the $2.7 billion without increasing a tax on somebody," said Rep. Patricia Bellock, R-Hinsdale.
Democratic Sen. Heather Steans, of Chicago, is also on the working group. She called the governor's plan a starting point that will be merged with the panel's own ideas as talks continue.
Hospital groups predicted the rate cuts would force some institutions to close, reducing access to medical care and eliminating thousands of jobs. "We are now at a breaking point," said the Association of Safety-Net Hospitals, which serve poor areas.
Quinn said he will present another major proposal Friday: his plan for controlling the state's ballooning pension payments.
He would not discuss the proposal, but lawmakers on a panel studying the pension problem said they've been told Quinn will ask state employees to contribute more to their retirement funds and accept smaller cost-of-living increases. They also said he'll propose a 30-year schedule for reducing a roughly $85 billion gap in long-term pension funding.