Governor's Proposal on Medicaid Spending Reductions
Last month we wrote about the budget crisis facing the Medicaid Program. The Department of Healthcare and Family Services' budget for Medicaid is on the brink of collapse with a deficit of $2.7 billion in the coming year.
Yesterday, the Governor released a plan to stabilize the Medicaid Program. It is a plan comprised of 3/4 cuts and 1/8 additional state revenue:
- Cuts, reductions and efficiencies in 58 separate items totaling $1.35 billion (50 percent)
- Rate reductions to providers totaling $675 million (25 percent)
- Additional revenue through an increase in the cigarette tax totaling $337.5 million (12.5 percent)
- 100 percent federal matching funds from the increased cigarette tax totaling $337.5 million (12.5 percent)
The tobacco tax is good fiscal policy, as well as good public health policy. Higher tobacco taxes save money by reducing tobacco-related healthcare costs, including Medicaid expenses. The additional revenues raised by increasing the cigarette tax are a crucial component of the plan – without it, the rate reductions to providers could be much larger.
This is the link to the full list of spending reductions (pdf). In addition, you may wish to review the fact sheet on the Governor's Plan (pdf). If you have other ideas for cost savings, please e-mail us at: firstname.lastname@example.org.
This proposal will ensure that Illinois is able to continue the Medicaid Program, providing vital healthcare services for low-income children, adults and families.
Please let your legislators know that immediate action, in the next six weeks, on Medicaid must be an urgent priority.
Illinois Department of Healthcare and Family Services