State cuts to Medicaid meant to force a restructure to the program

July 5, 2011

by Amanda Vinicky and City Room

(AP/File)

Illinois' top budget official says the governor is cutting Medicaid payments as a way to force legislators to restructure the program. Gov. Pat Quinn cut $270 million in Medicaid reimbursements when he signed the state budget into law last week.

"Medicaid is a very ... cost sensitive area that's increasing since 2008 at 5.8 percent a year on average.  That's a higher rate than the state can afford.  And it squeezes out other priority spending," said David Vaught, Quinn's budget director. He said Medicaid rates in Illinois are outdated.

Vaught said Quinn's cuts won't save the state money. Instead, the cuts will stall paying hospitals until next year. Hospitals have requested the state pay them back late, rather than cut reimbursements. 

The State of Illinois currently owes vendors about $4 billion in overdue bills.