Some Medicaid patients will soon feel the pinch of cuts

By Jamey Dunn

It’s official. Some Illinois residents on Medicaid will lose coverage or see their benefits rolled back after Gov. Pat Quinn signed a package of Medicaid reform legislation today.

Hundreds of thousands of letters have already been sent out by the Department of Healthcare and Family Services to notify Medicaid patents that they will no longer be covered for certain care, or in some cases, will no longer be offered Medicaid benefits. Most of the cuts will take effect at the start of the new fiscal year on July 1.

The changes include a reduction in the amount of household income that adults can make and be eligible for the FamilyCare program. Only those who make less than 133 percent of the federal poverty level, which is $30,660 for a family of four, will keep their coverage.

The law also eliminates the Illinois Cares Rx program, which helps low-income seniors pay for their medication.

Under Senate Bill 2840, Medicaid will no longer cover dental care for adults except in emergency situations. Group therapy for nursing home residents will also be eliminated. The department will limit access to certain services. Medicaid patients will only be allowed four prescriptions a month and eye glasses every two years. Prior approval from the department will be needed to replace or repair medical equipment, such as wheelchairs.

DHFS plans to hire an outside company to review the state’s Medicaid rolls and purge any recipients who are not eligible.

Supporters of the changes said they are needed to save the Medicaid program. Lawmakers voted last year to push billions in Medicaid bills from the current fiscal year into Fiscal Year 2013. A projection from the Civic Federation predicted that if no action were taken, the backlog of unpaid Medicaid bills would have reached $12 billion by 2017. “One of our most important missions in Springfield this year was to save Medicaid from the brink of collapse,” Gov. Pat Quinn said in a written statement. “I applaud the members of our working group and of the General Assembly, who worked together in a bipartisan manner to tackle a grave crisis. As a result, we preserved our health care program that millions of our most vulnerable rely upon.” Senate Bill 3397, which Quinn signed today, will phase out the practice of paying for Medicaid bills from one fiscal year out of revenues from future fiscal years. Illinois joins several other states that have made Medicaid cuts and reforms in recent years.

But advocates said cuts to services and tightening eligibility should have been a last resort. Jim Duffett, executive director of the Campaign for Better Health Care, said lawmakers should not have isolated Medicaid from the rest of the budget when making spending decisions. Quinn called on lawmakers to make a $2.7 billion reduction to the Medicaid liability. Duffett said Medicaid cuts should have instead been weighed against other spending, such as tax breaks for businesses. “We as a state have to decide what are our priorities.”

He argued that when implementing the plan, the state should first focus on taking away coverage from those who are not eligible, such as people who are not residents of the state, and then phase in a roll back in coverage for current Medicaid patients. “It’s just: boom!” he said. Duffett said the state is looking at its bottom line and not at what will happen to patients who will lose coverage at the end of the month. “Whatever their calculations are in terms of what they need to start saving is exactly what they’re doing. ... This is very aggressive.” He said officials should also be considering unintended consequences, such as patients losing coverage resorting to more expensive care in emergency rooms.
But Quinn said that the state has to move forward quickly with the changes. “It is difficult. There’s no question. But there are reductions and efficiencies that I think will serve everyone well. Everybody will have to understand that if we didn’t take the action today, we wouldn’t have a Medicaid system. … So we really had to act with dispatch and do some very difficult changes but necessary for the public,” Quinn told reporters in Peoria today.

Hospitals and nursing homes will see the rates they are paid for treating Medicaid patients reduced. Hospitals will see a rate cut of 3.5 percent. Nursing homes and other providers will see an average rate cut of 2.7 percent. Doctors, dentists, clinics, safety-net hospitals and critical access rural hospitals are exempt from rate cuts. The cuts and efficiencies to the Medicaid program combined with the reductions to provider rates will save the state an estimated $1.6 billion.

 The plan also relies on a $1-a-pack cigarette tax increase that goes into effect on June 24. The increase is expected to bring in $700 million with federal matching funds. The plan also includes a revamped hospital assessment, an accounting practice used to capture federal dollars and distribute money to the state’s hospitals. The new assessment will bring the state $100 million more in federal funds.