New Report Shows Medicaid Cuts Will Hurt Illinois Economy

A new report from Families USA and the Campaign for Better Health Care shows that Governor Quinn’s proposed $2.7 billion one-year reduction in Medicaid spending would hurt “Illinois’ economy, its health care providers, and the Illinoisans who depend on Medicaid for health care.”

The report, released on April 25, emphasizes Medicaid cuts mean both lost jobs and lost business activity. For example, a 5 percent reduction in state Medicaid spending would jeopardize more than 7,000 jobs and cost the state about $923 million annually in business activity. A 10 percent reduction doubles those figures. Quinn’s proposed 18 percent cuts mean the potential loss of more than 25,000 jobs and more than $3.3 billion in lost business activity. Short-sighted cuts can have long-term negative effects on Illinois’ economy. 

“Just because Medicaid gets cut doesn’t mean that people will get any less sick or need any less medical care. With no source for preventive or primary care, patients will eventually end up in the emergency room with a more severe illness or complications,” notes Jim Duffett, Executive Director of the Campaign for Better Health Care. “Chronic conditions such as diabetes, high blood pressure and cardiac issues must be managed or the consequences can be fatal.” 

“Medicaid is not just a safety net. It helps strengthen families in tough times, and it provides security for the most vulnerable, such as our kids, who are the future. For those of us who have private insurance and think we are immune from drastic cuts and changes in the Medicaid Program, think again. Slashing eligibility and services will financially cost you and your family more than the political rhetoric of some who say gutting the program will save you money." Duffett explains, "The expanded cost to pay for uncompensated care is then passed on to consumers, employers, and businesses in the form of higher insurance premiums. It is estimated that, in 2008, family coverage cost $1,017 more because of higher premium charges (cost shifting) that resulted from passing along the costs of uncompensated care.” 

Illinois Hospital Association President & CEO Maryjane Wurth says that blunt cuts are devastating to patients and the entire health care system. “Drastic Medicaid cuts hurt everyone—not just the Medicaid patients. Hospitals will be forced to reduce jobs. Local businesses will be impacted. And hospitals will be forced to cut or eliminate medical services that everyone uses—there is not a separate set of staff, equipment and facilities just for Medicaid patients.” 

The cuts would be costly for the state as well, since Illinois receives slightly more than one dollar in federal matching funds for every dollar it spends on Medicaid. The federal match brings new money into the state that the state would not otherwise have. 

“We have workable solutions such as expanded coordinated care that will not compromise patient care,” says Wurth. “We have presented these multi-year proposals to members of the General Assembly and look forward to working with them to create a more effective Medicaid system. It’s important that Medicaid patients get the most efficient, high-quality care possible.” “The Governor’s proposed cut to Illinois’ Medicaid program is both cruelly insensitive and economically unsound,” said Ron Pollack, Executive Director of Families USA. “His proposal will deny the state more than a billion dollars in federal support, cost the state billions in economic activity, put tens of thousands of jobs at risk, and hurt the state’s most vulnerable families and senior citizens. For many reasons, this is the wrong direction for Illinois in these difficult economic times.” The report is available at www.cbhconline.org. 

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About Families USA 

Families USA is the national organization for health care consumers. It is nonprofit and nonpartisan and advocates for high-quality, affordable health care for all Americans. For more information, · www.familiesusa.org 

About the Illinois Campaign for Better Health Care 

We believe that accessible, affordable, quality health care is a basic human right for all people. The Campaign for Better Health Care is the state’s largest coalition representing over 300 diverse organizations, organizing to help create and advocate for an accessible, quality health care system for all. For more information, visit www.cbhconline.org. 

About the Illinois Hospital Association 

The Illinois Hospital Association, with offices in Naperville, Springfield and Washington, D.C., is an advocate for 200 hospitals and health systems and the patients and communities they serve. For more information, visit www.ihatoday.org.