Quinn signs Medicaid cuts, cigarette tax

June 14, 2012

Associated Press

A $1.6 billion Medicaid spending cut that Gov. Pat Quinn signed into law Thursday takes a bite out of a relatively generous program and will leave the state with a level of services already familiar elsewhere in the nation.

The new cuts to the health care safety-net program eliminate extras like chiropractic and dental care for adults. Many other states dumped or limited these extras in the wake of the recession — or never offered them at all.

More than 25,000 Illinois working parents will be thrown off the program, but even that change can't be viewed as extraordinary, policy experts said, because Illinois historically has been more generous than most other states, covering parents at higher income levels.

In other words, Illinois' actions are "very consistent with what you've seen in other states. In Illinois, it's being all done all at once, in a way that may scare people," said Matt Salo of the National Association of Medicaid Directors.

For Illinois' Democratic governor, Medicaid emerged this year as a top legislative priority. The five bills that Quinn signed Thursday totaled $2.7 billion in cuts and taxes and were designed to repair a long-term deficit in the state's Medicaid program. Most changes start July 1, the beginning of the state's fiscal year. The multilayered legislation includes a tax increase on cigarettes of $1 per pack.

"One of our most important missions in Springfield this year was to save Medicaid from the brink of collapse," Gov. Quinn said in a statement. "I applaud the members of our working group and of the General Assembly, who worked together in a bipartisan manner to tackle a grave crisis."

Across the country, enrollment in Medicaid, the federal-state health program for the poor and disabled, swelled during the recession, driving up costs as states' revenue growth slowed. This year, continuing high unemployment spurred further increases in overall U.S. states' Medicaid spending compared to last year.

All during this time, many states cut benefits, added restrictions and reduced payments to providers. Illinois is playing catch-up.

"Concerning Medicaid, we took epic action," House Speaker Michael Madigan told lawmakers on the final night of the legislative session. Powerful health care interests had to compromise to get the Medicaid bill passed, while Republicans supported a tax increase and Democrats supported cutting benefits to the poor.

What got lost in the debate was the relative bounty of the Illinois program. For 2.7 million poor and disabled Illinois residents, the cuts will create real hardships, magnified because they're happening all at once. But the changes bring Illinois in line with other financially struggling states as well as other states never known for lavish safety-net programs.

For instance, Illinois will start requiring patients to pay $2 out of their own pockets for generic drugs and $3.60 for brand-name drugs. Most state Medicaid programs already require similar copayments for medications, according to reports published by the Kaiser Family Foundation.

More examples:

—Illinois will stop covering chiropractic services, joining 25 other states that don't provide the benefit.

—The state will limit eyeglasses for adults to one pair every two years. Twenty-two other states already have similar or more restrictive limits on eyeglasses. Eight states don't cover eyeglasses at all.

—Adult dental care will cease, except for emergencies such as tooth extractions. Illinois joins 16 other states that either don't cover regular adult dental care or have put strict limits on it.

—Podiatry will be covered only for patients with diabetes. Eight states don't cover podiatry at all and another 33 states strictly limit coverage.

"You'd be hard-pressed to find any state that hasn't already looked at adult dental, podiatry and chiropractic," Salo said. "These are the first things to go in any state."

—Illinois will cut payments to some hospitals and nursing homes. Last year, it was one of only six states that didn't cut provider payments.

—At its peak, the Illinois Family Care program, a favorite of imprisoned former governor Rod Blagojevich, covered parents with incomes up to 400 percent of the federal poverty guidelines, or $60,500 for a two-person household. Few other states were as generous. After July 1, Illinois will cover the neediest parents with household incomes up to 133 percent of federal poverty guidelines, or about $20,100 for a two-person family.

Illinois Medicaid, once "so much more generous than most other states," is on course to look very similar to programs in the rest of the country, Salo said.