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Hospitals: Medicaid cuts may boost costs for others

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SPRINGFIELD — Higher hospital bills could be facing the average Illinois household under Gov. Pat Quinn's $33.8 billion proposed budget.

By Andrew Thomason

SPRINGFIELD — Higher hospital bills could be facing the average Illinois household under Gov. Pat Quinn's $33.8 billion proposed budget.

Quinn wants to hold Medicaid funding flat by changing to the state-federal health insurance program. His office predicts that if nothing changes, Medicaid spending would jump by $2.7 billion.

"We think that is a recipe for a collapse of the Medicaid system," Jerry Stermer, Quinn's top adviser, said.

Danny Chun, spokesman for the Illinois Hospital Association, which lobbies for more than 200 hospitals in the state, said Quinn's proposed Medicaid budget would have negative ramifications beyond just Medicaid patients.

One out of every three hospitals in the state is operating in the red, said Chun. Decreasing how much the state pays doctors for treating Medicaid patients or cutting services covered by Medicaid will force hospitals to make up the difference elsewhere.

"Health-care costs will go up for non-Medicaid patients and for employers who pay for insurance and premiums," Chun said.

Any Medicaid cut "has a domino effect across the health-care system," he said.

Valorie Jones and her husband are raising seven children, ages 6 to 18, in their Alton home. Jones said her family is covered by her husband's insurance, but she works to keep the family's health-care cost at a minimum.

Higher price tags for doctor visits would be tough to swallow, she said.

"I couldn't handle it. I couldn't afford it, not with seven children," Jones said. "If it was just a small fever, I would avoid going (to the doctor). If it was a broken arm, no, I wouldn't avoid it.

Chun said the cuts also could push hospitals, teetering on the edge of financial collapse, off the cliff, creating areas where the nearest health-care facility is up to an hour away.

Hospitals "are that fragile," Chun said.

Spending on the state's human services budget, which includes Medicaid, this upcoming fiscal year will grow by 2.7 percent, from $14.3 in fiscal 2012 to $14.7 billion in Quinn's proposal for this year.

Quinn's office said that under normal circumstances, Medicaid spending should jump by $2.7 billion.

To avoid such a massive increase in spending, Quinn is calling for lawmakers to approve some combination of decreasing the amount health-care providers get paid for treating Medicaid patients, limiting the non-mandated services and other reforms.

"Everything is on the table," said Stermer.

Quinn lobbied for a 6 percent cut to Medicaid reimbursement rates last year. That effort fell flat in the Legislature. Stermer predicted that if no other reforms are accomplished, Quinn would have to seek "dramatic" rate cuts.

Currently, the state has $1.9 billion in Medicaid bills from last year that it intends to delay paying once again, said Stermer. Without changes to Medicaid, the amount of overdue, unpaid bills would jump to $4.6 billion next fiscal year.

"That's the 800-pound gorilla … because everything else, whether it's a 9 percent cut to this agency or a 2 percent cut to this agency, doesn't matter because it's all being cut" to cover Medicaid costs, state Rep. Chapin Rose, R-Mahomet, said.

Without change, the state will have $21 billion in unpaid, overdue Medicaid bills by fiscal 2017, according a report by the Civic Federation, a think-tank that monitors the state's finances.

Quinn's administration is moving ahead with implementing changes to income and residency verification reforms passed this spring, despite not getting approval from the federal government.

Currently, residency verification is not required unless something suspicious comes to the attention of the state. In that case, the person only needs to present a single pay-stub to prove he meets the income requirements to get Medicaid benefits.

The Illinois Hospital Association has proposed increasing taxes on behaviors such as smoking or drinking sugary beverages to cover the increasing costs of Medicaid. The Quinn administration wouldn't come down on one side or the other on such tax increases.

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