Medicaid reform package breaks promises to taxpayers

Lawmakers pushed an overall Medicaid reform package that fails to live up to the promises made to taxpayers.

by Jonathan Ingram

Earlier this year, Gov. Quinn and lawmakers agreed to reduce Medicaid spending by $2.7 billion. The Institute previously offered lawmakers a roadmap to $2.7 billion in Medicaid reforms.

But this week, lawmakers pushed an overall reform package that fails to live up to the promises made to taxpayers. This package includes just $1.6 billion in savings, the early implementation of ObamaCare and spends nearly $1 billion in new taxes and revenue.

• SB 2840 makes a number of changes to the Medicaid program, worth an estimate $1.6 billion, including a 3.5 percent rate cut to hospitals. The bill passed the House 94-22 and passed the Senate 44-13. This falls far short of the $2.7 billion in savings promised by Gov. Quinn and lawmakers.
• HB 5007 implements ObamaCare ahead of schedule. It permits the Governor to move forward with his plan to implement
  ObamaCare’s massive expansion of Medicaid nearly two years early in Cook County, adding approximately 250,000 people to the Medicaid rolls. The bill passed the House 62-55 and passed the Senate 35-22. Supporters of Gov. Quinn’s plan included 5 Senate Republicans and 11 House Republicans.
• SB 2194 imposes new taxes on tobacco products and hospitals. This bill increases cigarette taxes by $1-per-pack, imposes taxes on “”roll-your-own”” tobacco products and increases hospital assessment taxes. The bill passed the House 60-52. The tax hike was supported by 18 Republicans and 42 Democrats. The bill is expected to be heard in the Senate early next week.

Overall, this reform package endorses a permanent income tax hike by keeping Medicaid spending at unaffordable levels and relying on temporary tax dollars to finance it. This does not clear the path for the repeal or eventual sunset of the 2011 income tax hike. Worst of all, the reform package fails to fix the actual problems with the state’s Medicaid program by leaving in place a broken system where spending will continue to rise faster than revenues.