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* Background is here if you need it. An excerpt from today’s Capitol News Illinois story about pending Medicaid cuts…
Like many states, Illinois levies special taxes on certain health care providers, including hospitals. The money those taxes generate is used to draw down additional federal matching funds, then is paid back to the providers in the form of directed payments to increase their overall reimbursement rate and to reward them if they meet certain performance or quality standards.
Currently, IHA estimates the hospital tax generates about $2 billion a year in revenue. This past session, lawmakers passed a bill to increase the assessment in order to fund a 54% increase in hospital payments, subject to federal approval of the state’s plan. But state lawmakers passed that bill before Congress passed Trump’s domestic policy bill, dubbed the “One Big Beautiful Bill Act.”
Prior to passage of the new federal law, the tax rate states could levy was effectively capped at 6% of a hospital’s net patient revenue. But under the new law, for states like Illinois that expanded Medicaid under the ACA, that cap will gradually be lowered by half a percentage point each year starting in 2028 until it reaches 3.5% in 2032.
In addition, Wilhelmi said, the new law imposes a cap on the directed payments that expansion states like Illinois can send to hospitals so that the total does not exceed the maximum allowed under Medicare – the federal health insurance program for seniors, which has a lower reimbursement rate than Medicaid.
“And that will result in a significant reduction in Medicaid reimbursements for hospitals,” Wilhelmi said. “It means literally hundreds of millions of dollars in less reimbursement to hospitals.”
It’s a ways off, so there’s time to plan, or for the hospitals to change the federal law. Also, remember, those two items are part of a much broader Medicaid reduction package.
* Again, keep in mind that the Medicaid cuts are almost all backloaded. From the Sun-Times last week…
“The Illinois Department of Public Health (IDPH) is also warning that the Medicaid cuts could force the closure or severe service reductions at nine rural hospitals, affecting over 500 inpatient beds and jeopardizing care for 54,000 rural Illinoisans,” Pritzker wrote in the letter. “If H.R. 1 becomes law, many hospitals will be forced to eliminate critical services, cut staff, or even close, creating ripple effects that harm all patients in their communities, regardless of whether they rely on Medicaid coverage.”
The nine rural hospitals at risk of closure, according to the University of North Carolina’s Cecil G. Sheps Center for Health Services Research, are OSF Sacred Heart Medical Center in Danville, Hoopeston Community Memorial Hospital, Crawford Memorial Hospital in Robinson, Richland Memorial Hospital in Olney, Harrisburg Medical Center, Franklin Hospital in Benton, Massac Memorial Hospital in Metropolis, Hardin County General Hospital in Rosiclare and Katherine Shaw Bethea Hospital in Dixon.
* From WTTW yesterday…
Medicaid cuts in the massive new federal spending bill have left some so-called safety-net hospitals in limbo. […]
Once Medicaid funding is cut, as many as 330,000 people in Illinois could be impacted, officials said. Advocates say low-income patients don’t have many options if they lose Medicaid coverage and or if their local hospital closes. People could end up not seeking preventative care and pushing off routine check-ups until their conditions become life-threatening emergencies.
Medicaid cuts would hit local hospitals like Mount Sinai Hospital hard; 70% of the hospital’s patients are on Medicaid. Dan Regan, Sinai’s communications vice president, said the cuts will be felt far beyond hospitals’ bottom lines and everyone will feel the effects.
“It’s going to impact everybody because people will still need some place to go,” Regan said. “When safety nets get pushed to the brink, the impact isn’t contained. It’s not just on the safety net; it spreads and this bill will really widen the gap between the people who have access to care and those who don’t. Those gaps are not going to just show up in hospital budgets; they’re going to show up in schools. They’re going to show up in the workplace.”
Loretto Hospital, based in Austin, serves predominantly Black and Brown communities on the city’s West Side. These communities are disproportionately impacted by health care access disparities. At Loretto, 83% of patients are on Medicaid.
* NBC 5…
Chicago hospitals wouldn’t be the only institutions impacted if the cuts are put into place. According to estimates by Manatt Health, rural hospitals would stand to lose up to 21 cents of every dollar they receive in Medicaid funding if the bill passes. What’s more, the National Rural Health Association reports that nearly half of all children and one-in-five adults in small towns and rural areas rely on Medicaid or CHIP for health insurance, leaving them in a potentially dangerous position if cuts are enacted.
According to the Center for Healthcare Quality and Payment Reform, of Illinois’ 79 rural hospitals, 23 have seen losses of services in recent years, with 17 at-risk of closing.
Republicans have tried to boost funding for rural hospitals in an effort to swing votes on the bill, with the Senate allocating $25 billion for a rural hospital relief fund, but Democrats say the amount is far short of what those hospitals will lose as part of the spending package.
* WIFR…
“People are really worried about living the American dream,” maintained [US Rep. Darin LaHood]. “It’s too expensive to buy a home. Inflation is too high. Cost of energy is too high.”
In response to those concerned about Medicaid’s slashing, LaHood said he was looking out for his district.
“Are there going to be cuts to Medicaid? Yes, but not the ones that are going to affect drastically our hospitals and rural providers,” he commented. “Having a district that’s very rural… we’re keenly aware of this.”
* KWQC…
The Senate inserted $50 billion for rural hospitals, but healthcare experts say it won’t be enough to cover the losses. KFF, formerly the Kaiser Foundation, says Medicaid cuts in rural areas will amount to $155 billion.
posted by Rich Miller
Thursday, Jul 10, 25 @ 12:51 pm
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Yes people who pay close attention toward future polices are alarmed. Your average person following things lightly will see this as doom and gloom that did not occur as they vote next year. Before the storm hits.
Comment by Tallone Thursday, Jul 10, 25 @ 1:24 pm
“America First” except it’s just imploding every beneficial institution in America and raising taxes on everyone except Jeff Bezos and the President’s buddies. Those far southern districts are some of the most deep red districts in the State and they’re going to lose access to hospitals.
Comment by Incandenza Thursday, Jul 10, 25 @ 1:26 pm
Duh, I dunno but maybe we could consider eliminating the maximum earnings cap of $170,000 on Social Security taxes and require the top six percent of highest income earners pay one dollar out of every 13 earned into the care for our widows, orphans, disabled and elderly like everyone else does. These big dollar political donors have rigged the system far too long. The top six percent earn about 28% of the national income. Maybe that 28% should be placed into the Social Security tax base.
Comment by Jack in Chatham Thursday, Jul 10, 25 @ 1:31 pm
Good god, LaHood has zero idea what he voted for.
Comment by JoeMaddon Thursday, Jul 10, 25 @ 1:36 pm
Picture the health care system as a table with four legs. One of those legs is Medicaid, one is Medicare, one is private/commercial insurance and the other is other revenues. If you start shortening the Medicaid leg, the whole table becomes unsteady and eventually unstable for everyone, not just the folks who receive Medicaid.
Comment by Andrea Durbin Thursday, Jul 10, 25 @ 1:38 pm
Andrea Durbin and JoeMaddan are correct
Comment by Socially DIstant Watcher Thursday, Jul 10, 25 @ 1:41 pm
==maybe we could consider eliminating the maximum earnings cap of $170,000 on Social Security==
Are we eliminating the benefits cap as well?
Comment by City Zen Thursday, Jul 10, 25 @ 1:49 pm
==Are we eliminating the benefits cap as well?==
You always have some snarky comment to make. Don’t be dense.
Comment by Demoralized Thursday, Jul 10, 25 @ 1:54 pm
=== Good god, LaHood has zero idea what he voted for. ===
Yes he did. He just doesn’t care. This is the MAGA LaHood, not the one who cared about governing.
Comment by Norseman Thursday, Jul 10, 25 @ 1:58 pm
One of the reasons St. Mary’s Hospital in Streator was sold several years ago is that it had so many patients on Medicaid. The government was late in paying. It’s the same reason one of the ambulance services left town.
Cuts to Medicaid are going to hit the clinic we have here as well as to our regional hospitals and nursing homes.
But the GOP knows this. That’s why they delayed the Medicaid cuts until after the 2026 elections but provided for the tax cuts to the wealthy to take effect quickly.
Comment by Streator Curmudgeon Thursday, Jul 10, 25 @ 2:08 pm
darrin will be quoting President Bush II soon….oops
Comment by Amalia Thursday, Jul 10, 25 @ 2:25 pm
“LaHood has zero idea what he voted for.”
How long are we going to keep pretending?
He knows exactly what he did.
His words are for his supporters who haven’t read a single word of the bill, much less understand what is in it.
He knows that subgroup of people will define their reality based on what he says. It doesn’t matter if it’s accurate or not to the rest of the world. In fact the more pushback he gets from the outside world, the more his supporters will support him.
We’re in a bad place, and it’s not going to get better for awhile.
Comment by TheInvisibleMan Thursday, Jul 10, 25 @ 2:50 pm
=“People are really worried about living the American dream,” maintained [US Rep. Darin LaHood]. “It’s too expensive to buy a home. Inflation is too high. Cost of energy is too high.=
And this legislation does absolutely zero to address those issues. Also, is he suggesting (by his housing comments) that the value of my home should be reduced? I would like to have a word with him if that is the case. I doubt he has much understanding beyond the talking points though.
=Yes he did. He just doesn’t care.=
=He knows exactly what he did.=
With respect, I am really not sure he does know. That does not make him any less responsible for what he did, and it actually might be worse. I live in LaHood’s district and have met/talked to him several times in a small group setting. There is little to no substance to Darrin LaHood he is a classic nepo baby. When I have respectfully asked him questions about some of his positions on job it was literally like looking into a void. There really is nothing behind the facade. He is good a regurgitating bullet points though.
And, again it does not mean he isn’t responsible for the damage that will come from his vote.
With respect.
Comment by JS Mill Thursday, Jul 10, 25 @ 3:45 pm
=He knows exactly what he did.=
Of course he does. Just like when he joined the lawsuit in 2020 to contest the election results. LaHood believes that being 100% MAGA is enough to ensure the continued support of the major of his constituents. I think he’s right. It’s up to those voters to say otherwise. But LaHood knows exactly what he’s doing.
Comment by Pundent Thursday, Jul 10, 25 @ 4:11 pm
=move/create 50 new jobs to the state within four years.=
Oh snap. 50 whole new jobs over four years. Hashtag Winning. Hasn’t REV cost Illinois taxpayers a little over $1 billion dollars in state and local tax incentives since 2022? Gimme some more of that employment action.
Comment by Fiddy Thursday, Jul 10, 25 @ 4:49 pm
“Good god, LaHood has zero idea what he voted for.”
This is not what I would call a unique situation for him. He’s a talking head. A puppet. Nepo baby greased into a job his parents think he can hold down. So far so good for him.
Comment by Ducky LaMoore Thursday, Jul 10, 25 @ 8:26 pm
LaHood knows. I’m familiar with at least one person who met directly with him, not just his staff, and walked through the whole Medicaid piece of the bill in great detail. Saying he doesn’t know is both factually wrong as it turns out and also giving him something of a free pass that he doesn’t deserve.
Comment by Jeremy Rosen Thursday, Jul 10, 25 @ 10:04 pm