CHICAGO – A liberal national advocacy group is criticizing the solution proposed by Illinois’ Democratic governor to the state’s Medicaid crisis, a sign of the conflict ahead for state lawmakers on the issue.
Families USA issued a new report Wednesday that estimates job losses of more than 25,000 if Illinois cuts Medicaid spending by $2.7 billion.
That amount of cuts was proposed by Gov. Pat Quinn in February as he called for the Legislature to stop pushing unpaid Medicaid bills into future budget years. Quinn last week proposed cutting Medicaid projected spending by $2 billion and raising cigarette taxes to close the rest of the Medicaid budget gap.
A Medicaid budget cut of $2 billion in Illinois would place more than 19,000 jobs at risk and cost the state an estimated $2.45 billion in business activity, Kathleen Stoll of Families USA said.
Medicaid is the primary payer of care for more than 60 percent of Illinois nursing home residents, or 47,000 elderly and disabled Illinoisans, according to the new report. Medicaid also pays for more than one in five hospital stays.
Medicaid services allow family caregivers to keep working rather than quit their jobs to care for elderly and disabled family members.
The Illinois-based Campaign for Better Health Care joined Families USA in issuing the report. Both groups work for affordable health care for all Americans and are traditional allies of Democrats.
It’s not the first time Families USA has criticized Medicaid cuts in a state led by a Democratic governor, but the report is unusual because it features Quinn’s name prominently and frequently.
“Governor Quinn has proposed a cut of nearly 18 percent to Medicaid. If he succeeds, more than 25,600 Illinois jobs will be put at risk and business activity will be reduced by an estimated $3.3 billion,” the report states. The report was prepared before Quinn announced his plan for $2 billion in cuts and a cigarette tax increase.
Quinn’s office reacted to the criticism Wednesday, saying the “the entire Medicaid system will collapse if we do nothing.” A Medicaid collapse would be disastrous for clients, providers and the state of Illinois, said Quinn spokeswoman Brie Callahan, adding that the governor has made it clear that “the status quo is not an option.”
The Families USA report offered no alternative plan for balancing the Illinois Medicaid budget. Representatives of the groups said by phone they agree with the cigarette tax plan. Jim Duffett of the Campaign for Better Health Care suggested closing “corporate tax loopholes.” He acknowledged that Illinois can’t continue to let late Medicaid payments pile up year after year.
The Families USA job loss estimates are based on a model created by the U.S. Department of Commerce. Families USA worked with a University of Baltimore economics researcher to develop its calculations of how Medicaid cuts affect jobs, Stoll said.
Jobs lost after Medicaid cuts would be largely in the health care sector, but also in other businesses as lost federal funding ripples through the economy, Stoll said.
The Illinois Hospital Association has used the Families USA calculations in its public statements against Quinn’s cuts.
But others aren’t convinced of the jobs impact. Matt Salo, executive director of the Washington-based National Association of Medicaid Directors, said although he’s not familiar with the Families USA methodology, “it’s a very, very difficult game to try to correlate budget cuts to job losses in any field. It’s way too speculative.”
Last week, Quinn’s plan got an endorsement from the Chicago-based Civic Federation, which called it a reasonable response to the crisis situation.