Governor Pat Quinn Pushes $2.7 Billion Illinois Medicaid Savings Plan

(Springfield, IL) – April 19, 2012. Without consensus by his working group, Governor Pat Quinn today struck out on his own and announced his own plan to cut Illinois Medicaid costs by $2.7 billion from the Illinois’ troubled health care program for the poor.

“We must act quickly to save the entire Medicaid system from collapse, and protect providers and the millions of Illinois residents that depend upon Medicaid for their healthcare,” Quinn said.

The Governor convened a working group – comprised of members from each of the four legislative caucuses – to explore all options to wring $2.7 billion out of the Medicaid system, but the group has yet to reach a full consensus.

Without waiting for the legislative consensus, the proposal that Quinn is pushing reduces Illinois’ Medicaid liability by $2.7 billion, with three-quarters of the plan comprised of cuts, reductions and efficiencies, one-eighth in state revenue, and one-eighth in federal matching funds.

The key elements of Quinn’s plan include:

• Cuts, reductions and efficiencies to 58 separate items totaling $1.35 billion (50 percent)

• Rate reduction to providers totaling $675 million – (25 percent)

• Additional revenue through a $1 per pack increase in the cigarette tax totaling $337.5 million (12.5 percent)

• 100 percent federal match funding from the increased cigarette tax totaling $337.5 million (12.5 percent)

By including a tobacco revenue increase, the state will be eligible for an additional 100 percent in federal matching funds, totaling $337.5 million per year, Quinn claims.

“The status quo is not an option, and I want to thank the members of the working group, who have worked diligently with us to find real solutions to this problem,” said Julie Hamos, Department of Healthcare and Family Services director.

Medicaid provides healthcare to 2.7 million people in Illinois and coverage for half of all births.

At the end of the current fiscal year (FY 2013), Illinois will have $1.9 billion in unpaid Medicaid bills. The Civic Federation projects $21 billion in unpaid Medicaid bills by 2017 if Illinois’ Medicaid system is not fundamentally restructured.