Up to 100,000 Illinois Residents Could Lose Medicaid Coverage as Part of $485M in Cuts Proposed by Governor

Over the past three days, Illinois Gov. George Ryan (R) has cut $485 million from the state budget to cover an expected $500 million revenue shortfall that was created by declining tax revenues and rising health care costs, the Chicago Tribune reports. A majority of the cuts are to health care programs for the poor, which are under the governor's control because lawmakers did not give Ryan the authority to cut from other parts of the budget (Parsons/Long, Chicago Tribune, 11/29). Nearly all the cuts can be made without legislative approval. The following is a day-by-day description of Ryan's budget cuts that specifically affect health programs:

• Nov. 27: Ryan announced $219 million in cuts that in part will close a section of the Elgin Mental Health Center and a Chicago-area rehabilitation center for young adults with severely disabilities. The governor also shifted $22 million from construction of a genomics institute to a program that would help seniors and people with disabilities purchase prescription drugs (Parsons/Long, Chicago Tribune, 11/28).
• Nov. 28: Ryan announced $120 million in Medicaid cuts, which will save $30 million by cutting the reimbursements to HMOs that care for 150,000 Medicaid beneficiaries (Parsons/Long, Chicago Tribune, 11/29). Under Ryan's plan, the state would first "renegotiate" reimbursement rates with managed care organizations and then cut the "extra payment" the state makes to hospitals for Medicaid beneficiaries that are hospitalized for extended periods. The plan also cuts payments made to hospitals for Medicaid outpatient treatments (O'Connor, Associated Press, 11/29). The cuts for outpatient care and extended hospital stays would save $90 million, the Tribune reports (Chicago Tribune, 11/29).
• Nov. 29: In the last round of budget cuts, Ryan made reductions of $109 million. Under those cuts, the state is expected to save $17 million by removing about 100,000 former welfare recipients who during the "welfare-to-work push" in the late 1990s found employment but continued to receive Medicaid benefits even though their eligibility expired. All remaining Medicaid beneficiaries will now have to pay copayments of $1 per prescription or doctor or emergency room visit, a move expected to save the state $5.5 million. In addition, Ryan's plan would cut about $14 million from a grant program to fund inner-city hospitals that typically treat Medicaid beneficiaries. Some of these facilities also experienced cutbacks in the reductions announced Nov. 28 (McKinney, Chicago Sun-Times, 11/30).

Hospitals Upset
While state Budget Director Stephen Schnorf said the cutbacks "should not diminish" the care patients receive, hospital officials said some small hospitals could be forced to close. Kenneth Robbins, president of the Illinois Hospitals and Healthsystems Association, said, "If these outpatient cuts go forward, there is a very real possibility that a half-dozen rural hospitals will be forced to close their doors and another half-dozen pushed to the brink of failure" (Associated Press, 11/29). Richard Mark, president and CEO of St. Mary's Hospital in Springfield, Ill. said, "[Ryan's] trying to balance the budget on the backs of the poorest hospitals in Illinois, and I think its unconscionable" (McDermott, St. Louis Post-Dispatch, 11/28). For his part, Ryan said that if lawmakers allowed him to make reductions in other parts of the budget, "hospitals would not shoulder so much of the burden." He said, "We're trying to make this as painless for everybody as we can. I think [cuts] all impact on people's lives, and that's the bad part of it" (Associated Press, 11/29). Ryan criticized the Democratic-controlled House, which did not vote to authorize cuts elsewhere in the budget, like the Republican-controlled Senate did. Some hospitals and private agencies have said Ryan may reconsider some of the cuts, but the governor called that "wishful thinking." He added, "That's where we have to make the cuts and that's where we're going to make the cuts, and we have no choice" (Long/Parsons, Chicago Tribune, 11/30).