Eaton: Reform of Medicaid nothing if not confusing
By Fran Eaton Always Right/illinoisreview.typepad.com May 30, 2012 8:24PM
Updated: July 6, 2012 9:21AM
The Illinois Legislature must have a secret class during freshman orientation on how to be confusing. Fooling the public is a highly prized skill in Springfield.
A three-bill package sold as reining in our state’s out-of-control Medicaid crisis has set the bewilderment level to a new high. Or is it a new low? It’s disconcerting.
Medicaid is the government-provided health care program for the poor, partially paid for by state funds, matched by federal dollars. What’s the definition of “poor,” you ask? In Illinois, it depends on household income and the number of children (up to age 26) in a household. The more children, the more money the household can earn and still remain eligible for Medicaid — sometimes 185 to 200 percent of the poverty level.
With higher unemployment and more businesses leaving Illinois, the number of Illinoisans at the poverty level has sharply increased in recent years. That means the cost of Medicaid has risen substantially, while fewer pay taxes into the state’s treasury.
Doctors, hospitals, pharmacies and clinics are forced to wait months to get Medicaid reimbursement. Many Medicaid providers that have exhausted their savings and borrowing potential are unable to wait for their money and have closed.
The gloomy scenario is simple to understand. People who can’t afford private health care receive Medicaid. The more public funds allotted to health care, the less there is for education, public safety and public works programs and the more pressure on lawmakers to boost revenue through taxes and fees.
That’s where the system gets complicated. Believe it or not, hard-working folks have the gall to expect to be able to spend their money in a way they see best. They resent lawmakers taking away more and more of their tax dollars and using them in ways that don’t match taxpayers’ priorities. Fearing a voter backlash, legislators begin seeking tax hikes that are the least objectionable, typically so-called “sin taxes” on stuff like alcohol, tobacco and gambling.
This spring, Gov. Pat Quinn and the Legislature have agreed that cigarette smokers should pay more than their fair share to resolve Illinois’ roughly $2.7 billion Medicaid debt. The cigarette tax increase of $1 per pack brings the total tax in suburban Cook County to nearly $50 per carton.
The higher tax is projected to bring in about $350 million per year, which would be matched by federal funds to help limit the extent of Medicaid cuts. Does that mean Illinois will encourage cigarette smoking to bring in more revenue or discourage it because it’s unhealthy for smokers and those around them?
Smoking in public places is prohibited in Illinois, and some bordering states sell smokes for much less. How much will businesses along state borders lose when more smokers head for Missouri, Iowa and Indiana to buy cigarettes and other tobacco products? A spokesman for tobacco retailers estimates sales will decline by about 20 percent. But Illinois legislators still expect our smokers to bring in much more revenue.
Also, in an attempt to help correct a growing public health care crisis, the Legislature voted to expand the number of Cook County residents on Medicaid by nearly 250,000 through a federal waiver to allow unmarried county residents at 125 percent of the poverty level to qualify for Medicaid. This allows Cook County to tap into Obamacare two years ahead of the rest of the nation, according to Julie Hamos, director of the state Health and Human Services Department.
But that will likely happen just as the U.S. Supreme Court is deciding whether the Obamacare participation mandate is unconstitutional. That decision could cancel the whole program. If that were to occur, Cook County would have no revenue resource to cover the costs of those 250,000 new Medicaid patients. And we’re to think that’s a good idea?
To recap, we’re raising the cigarette tax to help reduce the impact of Medicaid cuts statewide while also increasing the Medicaid rolls by 250,000 Cook County residents.
And lawmakers also say they’re addressing the eligibility issue regarding Medicaid. Before, it was presumed that if one applied for government health care, he or she were eligible. A recipient would be kicked out only if someone or something raised a red flag and then only after extensive research.
Now, we’re told, without clear explanation, that a person is going to have to prove that his finances do not allow him to obtain health care insurance, and it’s going to be tougher to get lost in the system — greatly helping clean up Medicaid abuses. We shall see.
Certainly, this whole Medicaid mess is confusing. But for we taxpayers, still smarting from the 67 percent income tax hike, someone in Springfield should have the courtesy to simplify. At the very least, they should explain it to those of us who are paying the bill.
Fran Eaton is a Southland resident who co-founded and edits the conservative political blog, illinoisreview.com