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A look at some of the governor’s proposed Medicaid cuts

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Illinois

* The AP looks at the governor’s proposed $1.5 billion Medicaid cut…

(H)ospitals are a main target, shouldering $735 million in payment cuts — a 13 percent reduction, according to the Illinois Hospital Association. That may prove difficult to accomplish. Hospitals are major employers in many districts and the association will tell lawmakers the statewide economic impact of cuts would equate to 12,591 jobs lost.

The association’s political action committee contributes to candidates of both parties, giving $463,055 last year in Illinois races, including $150,000 to Pat Quinn’s losing campaign. […]

“There will be difficult discussions,” predicted Rep. Patti Bellock, a Hinsdale Republican who helped lead a bipartisan panel that hammered out the Medicaid cuts passed in 2012 known as the SMART Act. “There are a lot of districts where hospitals are extremely important. I consider them the backbone of our communities.” […]

The proposed payment cut to hospitals is nearly three times what the facilities lost in funding in 2012, said A.J. Wilhelmi of the Illinois Hospital Association. He warned of unintended consequences. “When you cut Medicaid, there’s a cost shift to the private insurance market and therefore middle-class families will pay more,” Wilhelmi said.

Rauner’s budget would cut $216 million from nursing homes (a SMART Act restoration) and save $40 million by ending a fee to pharmacies for dispensing brand-name drugs.

* Tribune…

The Illinois Hospital Association estimated that the cuts would result in 12,591 lost jobs and $1.75 billion in lost economic activity in the state.

Those most affected are hospitals that serve large numbers of Medicaid patients, Illinois Hospital Association spokesman Danny Chun said.

Norwegian American Hospital CEO Jose Sanchez said the majority of its almost entirely Hispanic and African-American patient-base in the Humboldt Park neighborhood rely on Medicaid for health insurance.

“If all of these cuts got through, it will have a devastating impact on the hospital,” Sanchez said. “We are 55 percent Medicaid.”

* IRN…

“There is no cost savings” to excluding adult dental care from Medicaid, said Dave Marsh of the Illinois State Dental Society. “It’s minuscule. But the pain and suffering of the population who would be affected by this is staggering.”

“There is a connection between the mouth and the rest of the body,” said Dr. Bruce Rotter, dean of the SIU School of Dental Medicine. “Approximately a third to a half of adult patients have periodontal disease.”

posted by Rich Miller
Monday, Feb 23, 15 @ 10:12 am

Comments

I’m excited to know that a dental school dean knows the mouth is connected to the rest of the body.

Comment by anon. Monday, Feb 23, 15 @ 10:15 am
But wouldn’t that only save have that much in state funds. I don’t think that has been very clear.

Comment by RetiredStateEmployee Monday, Feb 23, 15 @ 10:18 am
Half as much

Comment by RetiredStateEmployee Monday, Feb 23, 15 @ 10:18 am
===“There will be difficult discussions,” predicted Rep. Patti Bellock, a Hinsdale Republican…===

The only difficult decision a GOP GA member has is “Do the want a … problem?”

Yeah, that ain’t hyperbole, that’s a Rauner edict.

That independent, co-equal, branch of Illinois Government is going to be tested, exactly with proposals that turn into bills, that turn into ultimatums…

Maybe Rep. Bellock should check with Rep. Sandack when it comes to just falling in line(?)

Comment by Oswego Willy Monday, Feb 23, 15 @ 10:23 am
Clearly Gov. Rauner is captain of the ship leading the race to the bottom.
One must chuckle at the news editorial writers who have bought into the Gov’s hocus pocus.

Comment by Tim Snopes Monday, Feb 23, 15 @ 10:26 am
Part of Medicaid funds are matched and/or reimbursed by the federal government. So this would sort of be reverse-leveraging the money. Cutting several dollars to hospitals to save one dollar of state funds is not a good idea.

Comment by DuPage Monday, Feb 23, 15 @ 10:29 am
If you don’t cut this what is the other program to cut? There is only a finite amount of revenue available.

Comment by prisoner of cook Monday, Feb 23, 15 @ 10:32 am
12,591 lost jobs is an awfully precise estimate, isn’t it?

No problemo. Rauner can just ratchet up his “operational efficiencies” number from $200 million to $375 million.

That would be as real as anything else he’s proposed.

Comment by Wordslinger Monday, Feb 23, 15 @ 10:33 am
I certainly agree that dental health is critical to overall health, and coverage should be expanded, not reduced for those who cannot afford the shockingly high prices.

I’m not so sure about hospitals, though. I thought the trend was towards providing more care outside hospitals, in clinics and outpatient surgical centers and or even in the home. Whenever I visit a hospital, I notice the number of clerical and administrative staff walking around. It’s an expensive way of providing medical care. Does Illinois have an excess of hospital beds, at least in some areas. My local community hospital looks pretty dark early in the evening. And no, hospitals should not be funded because they are create local jobs. There are cheaper ways of generating employment than running the taxpayer cash through hospitals.

Comment by Cassandra Monday, Feb 23, 15 @ 10:35 am
Heck, as a state employee, my wife and I are already not going to the dentist any more. We can’t afford to pay up front and wait the nine months for reimbursement as it is.

Comment by Anonymous Monday, Feb 23, 15 @ 10:38 am
Snopes — Rauner may be captain of the ship be isn’t taking this cruise. He’s just sending the rest of us!

Comment by Out Here In The Middle Monday, Feb 23, 15 @ 10:38 am
Did anyone think this was going to be fun?

It will be bloody, because that is the bed we have made for ourselves over many years.

Comment by Formerly Known As... Monday, Feb 23, 15 @ 10:41 am
==Clearly Gov. Rauner is captain of the ship leading the race to the bottom==

If so, then Edgar, Ryan, Blago, Quinn, Madigan and crew handed him a crippled ship.

This thing was taking on water long before he donned the captain’s hat.

Comment by Formerly Known As... Monday, Feb 23, 15 @ 10:47 am
Well, now we get to see if our elected reps in the Peoria area are representing their constituents or the governor. CAT may love the gov, but OSF is getting ready to sharpen the blade.

Comment by Ducky LaMoore Monday, Feb 23, 15 @ 10:50 am
FKA, what do previous years have to do with Rauner banking phony savings in his proposal?

He wanted taxes rolled back. Done.

He said he could make it work with existing revenues. Not yet, he hasn’t.

Comment by Wordslinger Monday, Feb 23, 15 @ 10:51 am
=== “the pain and suffering of the population who would be affected by this is staggering.” ===

This is what it takes, in Rauner’s view, to become the most compassionate state in the Union.

Comment by anon Monday, Feb 23, 15 @ 10:52 am
Patti Bellock probably knows more about getting efficiencies in Medicaid, than anyone on Rauner’s team. She’s got plenty of backbone, and support across the aisle too. The Gov’s staff had better be careful with her.

Comment by walker Monday, Feb 23, 15 @ 10:53 am
===This is what it takes, in Rauner’s view, to become the most compassionate state in the Union.===

Love hurts.

Comment by 47th Ward Monday, Feb 23, 15 @ 10:58 am
Wait i thought rauner was going to fix job killing govt activity. Isnt slashing 12k jobs and the money those 12k people spend job killing?

As i recall what got us out of the tecession in the 20s and muffeled the recession in the us was govt jobs which kept the economy going while the few with money horded it instead of spending it.

Comment by Ghost Monday, Feb 23, 15 @ 11:01 am
- walker -

===Patti Bellock probably knows more about getting efficiencies in Medicaid, than anyone on Rauner’s team. She’s got plenty of backbone, and support across the aisle too. The Gov’s staff had better be careful with her.===

Agreed. That’s why I posed

===The only difficult decision a GOP GA member has is “Do they want a … problem?”===

And … ===Maybe Rep. Bellock should check with Rep. Sandack when it comes to just falling in line(?)===

…because, like you, I don’t think Rep. Bellock is going to go quietly into that goodnight. This is the “polite” response. Wait until this gets to the “nose counting” time.

Comment by Oswego Willy Monday, Feb 23, 15 @ 11:08 am
==Rauner’s budget would cut $216 million from nursing homes==

He’s got plenty of experience there.

Comment by Precinct Captain Monday, Feb 23, 15 @ 11:08 am
==This thing was taking on water long before he donned the captain’s hat.==

Yes it was, and Rauner spent tens of millions of his own money to wear that hat. Governin’ ain’t easy

Comment by exbricklayer Monday, Feb 23, 15 @ 11:33 am
FKA You left out Thompson as one of the co-creators of this debacle. he was the first to take “pension holidays”.

Comment by flea Monday, Feb 23, 15 @ 12:01 pm
++ He said he could make it work with existing revenues.++ The governor can live with his budget. His game is to force the Dems to raise taxes, shut down schools and fire state workers. The poor - they don’t vote so he doesn’t care.

Comment by Mama Monday, Feb 23, 15 @ 12:08 pm
Rich, what about the current budget that is about to crash & burn? Can anyone fix the budget hole? Can the budget be balanced without taxes?

Comment by Mama Monday, Feb 23, 15 @ 12:12 pm
===His game is to force the Dems to raise taxes, shut down schools and fire state workers.===

Won’t happen that way. Can’t. Won’t.

Structured roll call with a promise the governor will not veto, that’s how it will be required to go.

Let’s not forget the 30 of 47 GOP House, and 15 of 20 GOP Senate votes needed to pass that, along with GOP Members sponsoring.

Those are absolute minimums. Non-negotiable.

This is all on Rauner. The Dems in both Chambers are in no need, or hurry, to help under Rauner’s demands of them…

Now, the ILGOP GA, that’s different…

Comment by Oswego Willy Monday, Feb 23, 15 @ 12:13 pm
==If you don’t cut this what is the other program to cut? There is only a finite amount of revenue available.==

There lies the real debate. Is there only a finite amount of revenue available. Are we even close to reaching that amount?

With an individual state income tax rate of 3.75%, I’d say not. Wisconsin’s top rate is 7.75% on taxable income of $221,661 and above. Iowas top rate is 8.98% on taxable income of $64,261 and above. Kentucky has atop rates of 6% 6 percent on taxable income of $75,001 and above.
Missouri has a top rate of 6 percent on taxable income of $9,001 and above.

Even Moody’s in downgrading Illinois’ bond rating always add in their Illinois report that Illinois has:
–Sovereign powers over revenue and spending
–Statutory provisions giving priority to debt service over other state expenditures
–Large, diverse, and wealthy economy

Comment by Joe M Monday, Feb 23, 15 @ 12:15 pm
flea - grazie. A list like that is incomplete without the original, Thompson.

Wordslinger - Rauner ==banking phony savings== in this budget and this budget crisis being years in the making are both accurate.
The 10:26 comment makes it sound like the Illinois was cruising along in perfect shape until Rauner took over and suddenly jerked the wheel towards the rocks. This budget banks some phony savings, and this budget crisis was years in the making. Neither are good news.

Comment by Formerly Known As... Monday, Feb 23, 15 @ 12:37 pm
Good on the IHA for issuing some specifics about the number of jobs on the hook for elimination under this one aspect of the Governor’s proposal.

Too bad we don’t have similar projections relating to some of the other human services cuts he’s proposing. That falling unemployment rate is poised to take a sharp turn and begin heading the other way again.

As circularfiringsquad would say: Ready! Fire! Aim!

Self-inflicted jobs woes.

Comment by Linus Monday, Feb 23, 15 @ 12:39 pm
Joe M is right. And that’s why Illinois has no
trouble selling its debt. We taxpayers are endlessly pluckable, like it or not. Corporations too, although somehow I doubt many “loopholes” will be filled this spring.

Comment by Cassandra Monday, Feb 23, 15 @ 12:42 pm
If only rauner had a 20 million dollar carrot he could use to get votes…… After all politicians dont need to worry about the voters if they have big war chests right?

Comment by Ghost Monday, Feb 23, 15 @ 1:13 pm
This reminds me of the king from history of the world part 1….

Countdemoney: sir, the peasants! They are revolting!
King: you said it, they stink on ice……

Comment by Ghost Monday, Feb 23, 15 @ 1:28 pm
FKA, I really don’t get where you’re coming from.

Rauner’s proposed FY16 budget budget assumes $32 billion in GRF revenue, and he balances expenditures by assuming at least $3 billion, or 10 percent, in phantom savings.

He’s not paying down old bills. The FY16 proposal has nothing to do with prior years.

Comment by Wordslinger Monday, Feb 23, 15 @ 1:55 pm
I completely believe that cuts to Medicaid can be self-defeating. But the parallels to higher ed are disconcerting. We have here another highly bureaucratic financial entity whose balance sheets are mostly a mystery to outsiders, claiming that cuts from government will irreparably damage it. And my hunch is that the first cuts these entities will make, is to their front lines instead of to their internal upper-level bureaucracies.

Or they might. I’m sorry universities and hospitals in other words but you’ve done such a good job making your internal economics opaque, I just can’t tell when you are and you aren’t crying wolf.

The problem is I suspect Donna Arduin doesn’t have the first clue, either.

Comment by ZC Monday, Feb 23, 15 @ 2:25 pm
Word, I really don’t get where you’re coming from either.

Past actions impact on current choices. It is not as if every new budget year wipes out prior obligations or nullifies debt accumulated in previous years. Debt carries over. Choices have consequences beyond just one day or one year.

Pensions are one example, as @flea understands. We are at the peak of the pension ==ramp==. Had we paid our pension obligations in those prior years, our required pension contribution in this year’s budget would much smaller. So would our debt service for pension obligation bonds and more. This consumes billions of dollars we would otherwise be able to spend freely on things like Medicaid or education instead of things like increased pension ==ramp== contributions or larger debt service payments.

Comment by Formerly Known As... Monday, Feb 23, 15 @ 2:28 pm
Word, imho, the FY16 proposal has a great deal to do with prior years.

Prior actions impact current choices. State debts do not reset every new budget year, just as our credit card balances do not reset every NYE. Debt accumulations carry over.

It is doubtful we would be cutting our budget now had we paid our prior pension obligations, for example. Increased pension ==ramp== contributions and larger debt service payments consume billions of dollars we would otherwise be able to spend freely this year.

Comment by Formerly Known As... Monday, Feb 23, 15 @ 2:55 pm
ZC:

That would be a fair point, except that these are mostly public bodies with boards appointed by the Governor.

No, what Rauner and Republicans don’t like is that universities make the argument that they have to pay top dollar to attract top talent.

We know what these folks do, but for the past 14 years and perhaps longer people have questioned why these professors and other university folks are paid what they are paid.

Which is pretty funny, since Rauner has been making that argument about his own spending about once a week since he was sworn in.

Take a look at the list of the governor’s new hires:

ftp://ftp.illinoiscomptroller.com/newhire/PYR427.pdf

The governor’s personal assistant makes more than most professors.

Comment by Juvenal Monday, Feb 23, 15 @ 3:45 pm
Hospitals in Illinois are mostly public bodies with boards appointed by the Governor?

They’re nonprofits, definitely. But my impression is the largest hospitals in the Chicago area include Northwestern, University of Chicago, Rush, Loyola, Advocate Christ,

Comment by ZC Monday, Feb 23, 15 @ 4:33 pm
Sorry for the cutoff there … I get it more for public universities, definitely. I do think the economics of higher ed are relatively more transparent than the hospital system.

Comment by ZC Monday, Feb 23, 15 @ 4:34 pm
== Thompson as one of the co-creators of this debacle. he was the first to take “pension holidays”. ==

Nope. After the Pension Clause was put in the IL Constitution in 1970, the first Gov to short the pension funds was Dan Walker. See IFT v Lindberg 1975.

Comment by RNUG Monday, Feb 23, 15 @ 6:36 pm
There’s seems to be some confusion among some in regards to the governor’s proposed FY16 budget and the historic shorting of the pension funds.

There is no connection. The governor’s proposed FY16 budget does not add a dime to making up for the historic shorts. In fact, as has been pointed out, he’s banking on magic beans to short them again, to the tune of $2.2 billion.

That’s a lot of phony. That’s Blago territory.

He wanted an income tax rollback, he got it. That’s real.

But that doesnt mean he can just make stuff up on the spending side and call it “savings.” Campaigning and governing are way different.

On the revenue side, besides sweeps, Rauner is going for a grab back of the locals share of the income tax. That’s a heavy lift to 60/30. No base for it.

Next in line, I suspect, will be a graduated push to have suburban and Downstate schools districts pick up their pension costs. Also a heavy lift, with only Chicago legislators as base. That’s not enough.

So, for this year, I think the path of least resistance will eventually include a significant POB to make up for the magic beans.

That will give Rauner some time to get his feet underneath him
and figure out what the job is going forward. Because the job is not sales, but real CEO stuff, something that has not been in his wheelhouse.

And as we’ve seen in the last month, with the irrelevant and strange union stuff and the phony budget, the dude needs the time; he wasn’t ready to go,

Comment by Wordslinger Monday, Feb 23, 15 @ 8:02 pm
According to none other than Tim Nuding, there is a direct connection between historic shorting of the pension funds and the governor’s proposed FY16 budget.

== The scheduled state General Revenue Fund contribution to the pension systems in FY16 totals $6.6 billion.
Of that amount, about $2.0 billion accounts for “normal costs,” which represents the cost of benefits newly earned each year by active members of the pension systems. Said another way, if the pension systems were 100% funded, the payment that would have to be made to the systems to maintain 100% funding would be $2.0 billion.==

Comment by Formerly Known As... Monday, Feb 23, 15 @ 8:38 pm
We are also paying $1.4B on Pension Obligation Bond Debt Service in FY16. Nearly enough to cover these Medicaid cuts were we able to spend the money freely instead of being forced to make those debt payments.

==Past Governors and General Assemblies have chosen to borrow funds through the sale of bonds in order to make the annual pension payments.
This happened because the General Revenue Funds that should have been used to make the pension payments were allocated to other areas of the budget. Instead, the decision was made to sell bonds and deposit the proceeds into the pension systems in order to make the required state contribution.==
http://makeillinoisgreat.com/wp-content/uploads/Memo-Sins-of-the-Past.pdf

Comment by Formerly Known As... Monday, Feb 23, 15 @ 8:45 pm
FKA, you’re cracking me up.

You must think Quinn, Madigan and Cullerton are the bees-knees for making that full-boat pension payment the last six years,

Paying back borrowed money is baked in the cake, That’s just the way borrowing money works, The governor is making stuff up to bank $2.2 billion shorting debt repayment.

Comment by Wordslinger Monday, Feb 23, 15 @ 9:31 pm
Word,

Seeing as how they and Blago are the big brains who sold the FY03, FY10, FY11 pension obligation bonds we are now spending billions to service, the families facing service cuts in this budget must be cracking up right alongside you.

We can deservedly criticize Rauner for his magic beans that never sprout, but no sane person can deny past choices have contributed to our current budget squeeze.

Comment by Formerly Known As... Monday, Feb 23, 15 @ 10:47 pm