Medicaid mess is unavoidable
State officials face two choices on budget issues — bad and worse.
It's a simple rule of economics — you ought not spend money you don't have. If you do, bad things happen.
Gov. Pat Quinn Thursday outlined some of those bad things when he released his plan to address the state's debt-ridden Medicaid program. Although he described it as a plan to cut $2.7 billion, his proposal actually calls for $1.3 billion in cuts while simultaneously seeking $675 million in revenue increases to be achieved by a $1-a-pack cigarette tax hike that would generate more federal aid.
It's a sure sign that language is being perverted and that budget games continue to be played when a proposed tax increase is characterized as a budget cut. But that's how bad it's become in Illinois, a state bearing a staggering overall debt load that is expected to quadruple over the next four years if dramatic changes are not made.
Quinn followed his Medicaid message on Thursday with a proposal to restructure the state's underfunded public pension programs on Friday (an editorial on Quinn's pension proposals will be in Monday's newspaper). Just those two items consume 39 percent of the state's budget.
The cries of outrage over the proposed cuts will be deafening, and not without justification. People will be hurt, some more than others.
But what is the alternative to Quinn's plan or those submitted by others? Illinois simply doesn't have the money to meet all the demands for spending, and it has not had it for years. But governors and legislators kept on spending anyway, compounding the problem to the point that it borders on the unbelievable.
When Quinn describes the need to "act quickly to save the entire Medicaid system from collapse," he's not exaggerating.
The Medicaid numbers are staggering. Roughly 2.7 million people, many of them not even state residents, are on the state's Medicaid rolls, costing taxpayers $14 billion-plus a year. Illinois owes $1.9 billion in unpaid Medicaid bills, a sum expected to increase to $21 billion by 2017 without reductions in spending. Medicaid is more than a huge burden on the state budget, crowding out spending for other vital programs; it's an ever-growing threat because its costs continue to rapidly increase.
To achieve $1.3 billion in spending cuts, Quinn has proposed clearing the rolls of those who don't qualify under state guidelines, either because they don't live in the state or have incomes that exceed state limits. That would save an estimated $120 million.
Other reductions come from eliminating adult dental treatment, cutting chiropractic services, ending the state's supplemental drug program Illinois Cares, moving patients to managed care programs and limiting Medicaid prescriptions to five per month. He's also asking medical-service providers to continue to treat patients while being paid $675 million less.
The list of proposed cuts goes on and on — 58 in all — but just halfway ($1.3 billion) to Quinn's initial goal of $2.7 billion in cuts.
If enacted, will these cuts hurt people? Of course. How could they not?
This is budget triage in just one of many financially beleaguered state programs, cutting what can't be salvaged to ensure that what can be salvaged will survive.
What's next? Quinn's plan is just a starting point, although it was drafted by working groups made up of appointees from the governor and legislative leaders. House and Senate members running for re-election won't be pleased to have to make tough budget choices, so it is hard to say how House Speaker Michael Madigan and Senate President John Cullerton will react. Legislators' instincts will be to reject some of the cuts when they should be adding to them.
Minority Republicans, who wield little clout in Springfield, already have raised objections to the proposed cigarette tax increase. They point out that Quinn is good at raising taxes but rarely follows through on cutting spending. So they want to see real cuts before committing themselves to increased taxes.
It is, unfortunately, a horrific mess. Every choice is bad.
But there is no choice except to pick the least bad alternative and go forward.