Quinn Wants Medicaid Cuts, Tax Hike

(With additional reporting from The Associated Press)

Gov. Pat Quinn has come out with a proposal that he said will rescue Illinois' hemorrhaging Medicaid program. It would cut health care services and raise the state's cigarette tax.

In recent years, Illinois has added programs and bulked-up services to help people who don't have or can't afford private health insurance. There is "All Kids," which offers state-subsidized coverage for children. Illinois Cares R-X, which helps low-income seniors pay for prescription drugs.

Those are just two examples of the nearly three dozen programs that would be affected by a proposal unveiled Thursday by Gov. Quinn. He also wants to hike the tax on cigarettes.

A lot of Illinois residents rely on Medicaid to pay for their health care. These days, every other baby born in Illinois is covered by it.

An uptick partially prompted by the recession that, coupled with Illinois' increases in coverage, has made costs soar. Medicaid accounts for 40 percent of the state budget, a number that Quinn said will grow unless something's done to rein it in.

"In order to save the system -- to rescue the system, to have a system of health care for our most vulnerable residents all across Illinois, 2.7 million people, lots of 'em children -- we have to make some fundamental changes," Quinn said. "Now these are difficult changes, but if we don't make those changes, we won't have a system at all."

Quinn's proposed a three-pronged approach. It relies on raising the state tax on cigarettes, paying doctors and hospitals less for taking care of Medicaid patients and cutting programs and the number of people who qualify for them.

Those cuts are wide-ranging. Some aren't too hard to swallow, like limiting recipients to one pair of eyeglasses every two years. Other cuts are more like cost controls. Prior approval would be needed to get a wheelchair repaired or for HIV and cancer patients to get certain drugs. The state limit paying for the delivery of babies via c-section.

Then there are moratoriums on admissions to mental institutions, and knocking 26,000 adults off a state insurance program.

In order to prevent more cuts, Quinn is proposing raising the state's 98-cent tax on cigarettes by a dollar.

"It's one of the largest drivers of cost in our Medicaid system," Quinn said. "Now the proven strategy of preventing more people from smoking and continuing to smoke is to raise the price of cigarettes. That's just common sense."

And as a bonus, Quinn said that would trigger an extra infusion of cash from the federal government.

The American Cancer Society and Lung Association are thrilled.

State Rep. Patti Bellock (R-Hinsdale) said Quinn's plan doesn't go far enough in "scrubbing the rolls." She said there are people who've moved out of state, but still come back to Illinois to use their state-paid Medicaid benefits. She wants recipients to have to prove their eligibility every year. She is concerned that under Quinn's proposal even those who need the care would have a hard time finding it, because doctors will be unwilling to treat them.

The governor's plan calls for a roughly 8 percent decrease in what the state pays caregivers.

Laura Shea is president of the Sangamon County Medical Society, and a practicing psychiatrist in Springfield. She said reimbursements are already too low. Shea said if they go even lower, more doctors may turn away Medicaid patients.

"I'm really concerned about the people who are insured by public aid because I feel like they have a hard time getting treatment already," Shea said.

It is likely that some variety of rate cut will be part of the final deal. It may, however, not be at the level Quinn has proposed.

The governor may have rolled out his plan, but a bipartisan group asked to propose $2.7 billion worth of cuts in Illinois' Medicaid budget failed to come up with a plan by a deadline this week.

State Sen. Dale Righter (R-Mattoon) is part of a bipartisan group of legislators the governor had charged with finding a way to cut Medicaid by 15 percent. Righter isn't supportive of Gov, Quinn's plan, noting that Democrats raised the state income tax just last year.

"We're still 6 weeks out from the end of session, the governor's waving the white flag and saying 'you know we're really not going to change the system that much, and we're going to go ahead and raise taxes," he said. "The working group's not done. This is not the working group's plan. This is the governor's plan."

The task force is meeting again Tuesday to come up with its own plan for Medicaid. Whatever the final agreement may be, it is going to hurt.

Advocacy groups have been bracing for proposed cuts and are worried about the impact on the elderly, poor and disabled. David Vinkler of AARP said that cutting some benefits could lead to increases in other costs, like emergency room visits.

"It's going to be really bad," Vinkler said. "People who really need help ... start choosing between food, drugs, and paying their bills.