Medicaid reform bill fails to deliver

House Amendment 3 to Senate Bill 2840 fails to live up to the promises made to taxpayers. While this bill is an improvement over earlier drafts, there is still cause for alarm.

by Jonathan Ingram

Earlier this year, Gov. Quinn and lawmakers agreed to reduce Medicaid spending by $2.7 billion. On Monday, the Institute released a plan to do just that, without hiking taxes or cutting reimbursement rates to doctors and hospitals. In contrast, Rep. Sara Feigenholtz filed an amendment to Senate Bill 2840, which contains many of the reforms Gov. Quinn and the Medicaid working group had discussed, but which ultimately fails to live up to the promises made to taxpayers. While this bill is an improvement over earlier drafts, there is still cause for alarm:

• It falls far short of the $2.7 billion in savings promised by lawmakers. According to the bill’s sponsor, the reform plan introduced hinges on new taxes that will be introduced separately.

• It endorses a permanent income tax hike. The bill keeps Medicaid spending at unaffordable levels and relies on temporary tax dollars to finance it. This does not clear the path for the repeal or eventual sunset of the 2011 temporary income tax hike.

• It implements ObamaCare ahead of schedule. It permits the Governor to move forward with his plan to implement ObamaCare’s expansion of Medicaid nearly two years early in Cook County, adding approximately 250,000 people to the Medicaid rolls.

• It leaves much of the implementation of cost-savings to administrative rule-making. In a number of cases, it permits the Department to make changes, but does not require or direct them to do so.

• It does not effectively cut up the Medicaid credit card. While the bill begins to limit the number of unpaid Medicaid bills the state can push off into future years, it permits the state to push off $700 million of fiscal year 2013 bills into the future. It also exempts all fiscal year 2012 bills from the new limit, which may give the Department the ability to gimmick the order of vouchers submitted to the Comptroller’s office.

• It does not offer the fundamental, structural changes that the Medicaid program needs. Structural problems need structural reforms. Temporary fixes, reimbursement rate cuts and half-measures ensure that the underlying problems will remain.

This is not the “rendezvous with reality” that was promised.