Earlier this afternoon, Gov. Quinn signed the "Medicaid
reform" package. As you may recall, Quinn called on lawmakers to reduce
Medicaid spending by $2.7 billion in his February budget address.
The Institute offered a 59 point plan to help lawmakers hit that
target. Our plan would have reduced Medicaid spending by $2.7 billion without
cutting reimbursement rates that are already so low that providers can’t afford
to take new Medicaid patients. That plan, endorsed by several lawmakers and
presented to the Medicaid working group, reduced spending by making the program
more transparent and efficient in the delivery of care.
Sadly, Gov. Quinn signed a package that ultimately fails to deliver on his
promises to taxpayers:
The package makes a number of changes to the
Medicaid program, but found just $1.6 billion in savings, including a 3.5
percent rate cut to hospitals. This falls far short of the $2.7 billion in
savings promised by lawmakers and needed to ensure the Medicaid program is both
sustainable and protects the most vulnerable.
The package imposes new taxes on tobacco
products and hospitals. The package increases cigarette taxes by $1-per-pack
and imposes new taxes on "roll-your-own" tobacco products. This more
than doubles the state's tax on tobacco, raising the total tobacco tax in
Chicago to nearly $5-per-pack, second highest in the nation. We've previously
highlighted why relying on tobacco taxes for Medicaid spending is bad public
policy. The package also includes new taxes on hospitals, which will be shifted onto Illinois consumers.
The package implements ObamaCare ahead of
schedule. Despite the fact that a majority of states are suing the federal
government over a forced expansion of Medicaid, this package permits the
Governor to move forward with his plan to implement ObamaCare's massive
expansion of Medicaid nearly two years early in Cook County. His administration
estimates that the plan would add approximately 250,000 people to the Medicaid
rolls. Keep in mind: the Supreme Court could strike down this provision (or the
law in its entirety) any day. And, as we've explained in the past, this plan
will hurt Illinois and Cook County taxpayers at a time of record government
deficits and debt.
Overall, Gov. Quinn’s package endorses a permanent income tax hike by
keeping Medicaid spending at unaffordable levels and relying on temporary tax
dollars to finance it. This does not clear the path for the repeal or eventual
sunset of the 2011 income tax hike. Worst of all, the package fails to fix the
actual problems with the state's Medicaid program by leaving in place a broken
system where spending will continue to rise faster than revenues and the most
vulnerable will be turned away from quality care.