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Generous no more, Illinois slices Medicaid spending by $1.6 billion

Medicaid cutbacks

Under legislation signed by Gov. Pat Quinn Thursday:

▪ Illinois will stop covering chiropractic services

▪ The state will limit eyeglasses for adults to one pair every two years.

▪ Adult dental care will cease, except for emergencies such as tooth extractions.

▪ Podiatry will be covered only for patients with diabetes.

▪ State payments will be reduced to some hospitals and nursing homes.

▪ The state will require a total of $15 million a year in “cost-sharing” from families with “medically fragile” children who rely on ventilators and receive in-home nursing services.

Updated: July 16, 2012 6:29AM

The $1.6 billion Medicaid spending cut that Gov. Pat Quinn signed into law Thursday will leave Illinois with a level of services already familiar elsewhere in the nation.

Locally, health care providers are both pleased and disappointed with the new bills. The cuts to the health care safety net program eliminate extras like chiropractic and dental care for adults, which many other states already have dumped or limited in the wake of the recession.

More than 25,000 Illinois working parents will be thrown off the Medicaid program, making Illinois “very consistent with what you’ve seen in other states. In Illinois, it’s being all done all at once, in a way that may scare people,” said Matt Salo of the National Association of Medicaid Directors.

The five bills that Quinn signed Thursday totaled $2.7 billion in cuts and taxes designed to repair a long-term deficit in the state’s Medicaid program. Most changes start July 1, the beginning of the state’s fiscal year. The multilayered legislation includes a tax increase on cigarettes of $1 per pack.

“One of our most important missions in Springfield this year was to save Medicaid from the brink of collapse,” Quinn said in a statement.

Hardships ahead

But for 2.7 million poor and disabled Illinois residents, the cuts will create real hardships, magnified because they’re happening all at once.

Quinn’s move drew criticism from advocates for the poor, who complained the governor and state lawmakers could have closed corporate “loopholes” to make up for Medicaid shortfalls rather than wringing savings from the state’s most vulnerable populations.

Illinois Medicaid, once “so much more generous than most other states,” is on course to look very similar to programs in the rest of the country, Salo said.

And according to the Naperville-based Illinois Hospital Association, that may not be a bad thing.

“The Illinois Hospital Association is pleased that Governor Quinn today signed a series of bills that are of great importance to patients and the state’s health care delivery system,” the organization said in a statement Thursday.

The IHA is an advocate for 200 hospitals and health systems across the state. Provena Mercy Medical Center in Aurora referred to the IHA announcement when asked to comment on the Medicaid cuts Thursday. Rush-Copley Medical Center in Aurora did not respond to requests for comment.

Hospital tax issue

The IHA commended Senate Bill 2194, “which includes critically needed support for the Medicaid program from a cigarette tax increase and an enhanced Hospital Assessment Program, as well as clear and workable criteria on the hospital tax-exemption issue.”

Brian Davis, vice president of marketing and government relations for Edward Hospital in Naperville, said clear standards on the hospital tax issue are important.

“We are confident that Edward will meet the new criteria and that our previously rejected property tax exemption application, along with other pending applications for various properties, will be approved in the near future by the Department of Revenue,” Davis said Thursday.

“The maintenance of our property tax exemption means we will be able to continue to invest in our communities through critically needed services, ... new life-saving technology and upgraded facilities.”

Impact on residents

The cuts will eliminate the Illinois Cares Rx program, which provides 180,000 low-income seniors with $72 million a year in prescription drug subsidies. The legislation also cuts income eligibility for the Family Care insurance program, affecting 26,400.

“While the health-care related bills signed today are overall positive, we are concerned about how cuts in Medicaid will affect patients and hospitals throughout Illinois,” Davis said. “The rate cuts will impact Edward and Linden Oaks at Edward by about $1 million dollars annually.”

And hospitals aren’t just for patients — they are also major job creators and economic engines, providing nearly 425,000 direct and indirect jobs to Illinoisans and generating an economic impact of nearly $79 billion a year.

Staff writer Erika Wurst contributed to this story.

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