Cutting Medicaid to save it
After the party comes the hangover, and Illinois is now paying the price for a decade-long spending spree.
Reactions differed last week when Gov. Pat Quinn signed a huge package of Medicaid-related legislation that is aimed at closing a $2.7 billion spending gap.
Spokesmen for the elderly, the disabled and mothers with young children described the cuts as heartless and contend they will cause mass suffering.
But Gov. Quinn and others bragged about the tough-minded decisions they contend will save the Medicaid program from fiscal collapse.
"We had to make some very tough decisions, difficult but necessary in order to preserve the system," said Quinn.
So who's correct? Actually, both sides are dead on.
There is no question that many of the 2.7 million Illinoisans who receive taxpayer-funded services through Medicaid will be hurt. Programs cut include a drug program for seniors, chiropractic services and dental care. Income eligibility requirements are being tightened, forcing some families off the dole.
At the same time, there are limits. Illinois is not just out of money, but billions of dollars in debt despite a massive income-tax increase. To keep Medicaid services available to those most in need, Quinn and legislators were forced to establish priorities — triage of sorts. To continue providing some services, Quinn and legislators decided to sacrifice others. They also raised Medicaid revenues $700 million by doubling the cigarette tax.
It was distasteful, Quinn said, but necessary.
What's striking, however, about the coming changes in Medicaid is not that Illinois is reducing services but that Illinois' reduced services will be roughly equal to what other state provide their citizens.
The Associated Press reports many states already have eliminated chiropractic and dental services or never offered them at all. Most states already require small co-payments for prescription medicine. Illinois will begin doing so when the legislation takes effect on July 1 — a $2 co-pay for generic medication and $3.60 for brand-name prescriptions.
Illinois will soon allow Medicaid recipients only one new pair of glasses every two years. Twenty-two states have a similar or more restrictive rule in place, and eight states don't provide eyeglasses.
What this demonstrates is that Illinois is late to the budget-cutting party once again. While other states addressed their fiscal problems by, among other things, limiting their Medicaid services, Illinois lawmakers continued to offer more generous services even as the state was sliding into effective bankruptcy.
Finally, when unavoidable disaster loomed, Quinn and lawmakers chose to do what they should have done years ago — limit spending increases by reducing services.
It's no fun when budgets are tight. But one way to avoid the kind of fiscal calamity Illinois now confronts is to make careful spending decisions.
That should be obvious. But, obviously, it's not. Illinois has been on a spending binge for most of the 2000s. Lawmakers routinely spent money the state didn't have and created costly programs they couldn't afford.
Illinois would have faced a cash crunch even without the brutal 2008 recession and its aftermath. But problems were compounded when the housing bubble burst and the banks nearly went bust.
Only in the last two years have the governor and the legislative leaders tried to rein in spending.
Today, it's Medicaid. Tomorrow, it will be public employee pensions, school funding, law enforcement, road construction and repair, and on and on.
Times are hard. But they wouldn't be as hard now if our elected officials had been willing to confront financial realities and act accordingly in the past.