A coalition of Chicago hospitals serving the poor argue Wednesday against the state of Illinois’ proposal to slash Medicaid funding by $2.7 billion.

Representatives of so-called safety net hospitals say such cuts would devastate the low income communities they serve and could lead to possible closures.

“My story is very simple: I have no option to cut anywhere at this point. … I have no way to reduce services,” said Jose R. Sanchez, president and CEO of Norwegian American Hospital in Humboldt Park on Chicago’s West Side.

Sanchez told the Illinois House’s Health Care Availability and Accessibility Committee that if the cuts proceed, his hospital would need to cut 18 percent of its operating budget.

“Eighteen percent is unsustainable,” Sanchez says. “There is no way we are going to be able to do it besides closing the institution.”

Norwegian American Hospital is part of the Association of Safety-Net Hospitals.

Sister Shiela Lyne, president and CEO of Mercy Hospital and Medical Center, told the Committee meeting in Chicago the state could save $700 million if it would remove more than 300,000 people who do not qualify for Medicaid insurance. Lyne, whose hospital is also a member of the Association, said the state needs to be aggressive in pursuing more Medicaid funding from the federal government.

“We should not balance the budget on the backs of the poor,” Lyne said.

Gov. Pat Quinn’s office said the cuts to Medicaid are needed to save the program. 

The hearing came as U.S. Health and Human Services Secretary Kathleen Sebelius was in the city for a forum on preventing healthcare fraud. Sebelius said she understands that states are struggling to find funds to pay for services. She hopes states find areas to cuts since health care is desperately needed by many individuals.

“I know a lot of folks are struggling to find resources in tough budget times. We’re hopeful that cutting people off of health care is not a choice that I think many people finding very attractive,” Sebelius said.  “Frankly, it’s a lose-lose situation. Not only do people lose their health care, but the short-term cost savings are passed on to others. … As a former governor, I know how tough it is to run a Medicaid program and delivering appropriate services. ”

Those testifying before the House Committee had a sympathetic ear in committee chair state Rep. Mary Flowers, D-Chicago.

“Cutting Medicaid does not reduce or eliminate health care needs. People will still need medication, they will still need treatment,” Flowers said. “But without Medicaid, they will not be able to afford it. People we will not have access to critical services.”

Illinois state lawmakers will return to the session in Springfield on April 17.