SPRINGFIELD — Gov. Pat Quinn has a dilemma. The state constitution requires him to balance his budget. The governor figures he can find $2.7 billion in savings through cuts to the state’s Medicaid program. The costs of failure are huge, and few think the governor will succeed.
By Andrew Thomason
SPRINGFIELD — Gov. Pat Quinn has a dilemma. The state constitution requires him to balance his budget. The governor figures he can find $2.7 billion in savings through cuts to the state’s Medicaid program. The costs of failure are huge, and few think the governor will succeed.
Even those cuts would simply hold Medicaid spending flat, and wouldn’t begin to address the $2 billion the state owes in overdue Medicaid bills.
If the Legislature can’t agree on cuts, Medicaid eventually will squeeze other areas of the state budget, including education and public safety. On top of that, the state will wind up with $21 billion in overdue Medicaid bills by 2017, according to the Civic Federation, a budget watchdog based in Chicago.
“Medicaid liabilities continue to squeeze discretionary spending, and if nothing is done this session, more and more services and facilities will be reduced or eliminated just to pay these costs,” Brie Callahan, a spokeswoman for Quinn, said.
Making such drastic cuts would help balance the budget, but it’s going to be almost impossible, said Joy Wilson, health policy director for the National Conference of State Legislatures, a lobbying group for state legislatures.
“Over a year or over two years, those are hard numbers to get out of the Medicaid program as it’s currently constituted,” Wilson told a rare Illinois Senate Committee of the Whole on Thursday. “It is very hard to get savings in the Medicaid program in real time. It just is.”
Wilson traces the problem to the Patient Protection and Affordable Care Act — the national health-care act — which faces its first serious legal challenge in the U.S. Supreme Court next week. Opponents are arguing against its constitutionality.
Once upon a time, Wilson told the Senate, states saved cash quickly by simply raising eligibility requirements to kick people off Medicaid. That would work in Illinois, where the number of people receiving Medicaid has nearly doubled in a decade, from 1.5 million people in 2003 to 2.9 million.
There’s at least one problem with that solution: The national health care act prohibits states from making any changes to eligibility until 2014, except in limited cases approved by the feds.
Illinois recently received one of those federal exemptions, allowing the state to check the residency of Medicaid recipients. Now it’s seeking a similar exemption to tighten income verification.
“That should help us a lot, but it’s not the $2.7 billion,” said state Rep. Patti Bellock, R-Hinsdale, who is on the Illinois House Human Services Appropriations Committee.
Wilson said another Quinn proposal — to cut reimbursement rates for Medicaid providers — could be difficult. The feds are working on a rule that would require a state to demonstrate that cutting reimbursement rates wouldn’t affect care adversely. A similar proposal in California landed that state in federal court, where it faces a lawsuit brought by providers and others.
“It was a little disheartening,” state Sen. Heather Steans, D-Chicago, said of Wilson’s presentation. “There’s a lot of restrictions being put on by the feds in terms of the flexibility states have, so there’s only certain things we can look at, and that makes it more challenging.”
Quinn supporters say the governor is looking at the broad “optional services” category, where savings could range from changing prescription coverage to eliminating organ transplants.
Wilson cautioned against rash cuts.
“It’s very important that you make sure that you don’t make cuts that actually cost you money, because then at the end of the day you’re still in the hole,” Wilson said.
As an example, she pointed to dental care, which is optional under Medicaid.
Most states that cut adult dental care — a Medicaid option — quickly reinstate the program, because untreated dental problems too often lead to more costly hospitalization, boosting states’ Medicaid costs.
Quinn’s office didn’t directly respond to questions about whether its goal of shedding $2.7 billion from the Medicaid budget is realistic, and would not comment on specific cuts.
A working group has been convened to present possible solutions to the state’s ballooning Medicaid costs.
Steans, a member of the working group, said it is still gathering evidence and testimony. In a week or two, the group will “sit down and try to hash out what will be a reasonable plan moving forward,” Steans said.
The working group’s findings are due by mid-April.
Quinn has threatened to keep the Legislature around for special session in the summer if no serious reforms are agreed upon by the end of spring session May 31.
Steans and Bellock admit that the cash-strapped state needs to make deep cuts. Asked specifically if the cuts are possible, Bellock’s shoulders slumped, and she said simply, “It’s going to be very difficult.”
Medicaid expansion could worsen physician access
A new paper suggests that a critical part of the Affordable Care Act (ACA) — its expansion of Medicaid coverage to 16 million more Americans — may actually reduce those individuals' access to health care (http://bit.ly/HhE0ap). Medicaid underpays doctors for their expenses. Medicaid's reimbursement rates are around half of those paid by private insurers.
Two MIT economists have found that three-quarters of physicians receive lower fees for serving Medicaid patients than they do for the uninsured, because many people without health insurance are still able to pay out-of-pocket for routine health expenses.
Overall, Medicaid expansions do not lead to more doctor visits.
The ACA's Medicaid expansion could worsen physician access.