Medicaid bill taxes smokers; stresses healthcare providers

On July 1, smokers began to pay an extra tax for their habit after Governor Patrick Quinn signed into law a package that alters Illinois’ Medicaid system. The $1 tax hike per cigarette pack combined with $1.6 billion in Medicaid spending reductions are designed to save the State $2.7 billion on Medicaid. The Save Medicaid Access and Resources Together (SMART) Act eliminates the Medicaid prescription drug program, Illinois Cares Rx; limits Medicaid patients to one pair of glasses every two years; and has tighter standards to fight alleged fraud.

“Medicaid reform was unavoidable, but the funding cuts and program eliminations will do too much harm to the children, elderly, and disabled—all of whom are the least able to afford access to healthcare,” said State Senator Mattie Hunter (D-3rd). “Sixty-five percent of the people on Medicaid in Illinois are children. Cutting the funding that provides a child with healthcare is sinful.” Quinn countered, “One of our most important missions in Springfield this year was to save Medicaid from the brink of collapse,” adding that the Medicaid program’s $2.7 billion budget gap would have grown to $21 billion by 2017 if this year’s legislation had not passed.

 “There was no easy solution to the Medicaid issue in Illinois,” Hunter said. “I do not think I necessarily know what the better alternative solution would have been, but I do know that there was not enough discussion before coming to the final conclusion that was voted on this year.” The bill’s $1.6 billion in savings comes from scaling Medicaid to fit available funding sources through 62 spending reductions and from controls on program use. It also cuts provider rates; most providers will see a 2.7% cut. The bill eliminates “optional” services, such as psychotherapy and adult chiropractic services, and even restricts adult dental services to emergencies.

“We are concerned that changes in coverage eligibility could impact patients and leave them in circumstances having to choose between basic life needs and health needs,” said Bryan Becker, interim associate vice president of health affairs at the University of Illinois Hospital and Health Sciences System on the Near West Side. He added that U of I estimates a net impact of millions of dollars in Medicaid payment reductions in 2013. “Those numbers could increase based on additional changes to the pricing for medications, inpatient medication coverage eligibility, and ineligibility to Family-Care,” explained Becker, who added the UIC College of Pharmacy and College of Dentistry alone will see $2 million to $7.2 million in reduced Medicaid payments. Dionne Haney, the Illinois State Dental Society’s director of professional services said concerning dental care that, “What we’ve seen in the past is that when you eliminate the dental benefits, more adults go to the emergency room for treatment.

Places like the University of Illinois at Chicago College of Dentistry are going to be affected by these cuts because they won’t be seeing as many patients as in the past. “We are not currently working on any other programs that would relieve the need, but we have been working with Family Health Care Services to get Medicaid back in the system to get the adult Medicaid services that are badly needed,” Haney said The cigarette tax hike aims to prevent even deeper Medicaid cuts. The plan taxes every pack $1, with small cigars taxed at the same rate. These measures move Illinois to 16th place for highest cigarette tax among U.S. states, according to the Campaign for Tobacco Free Kids. “While the $1 tax is certainly of benefit in supporting healthcare expenses, the tax alone is probably not sufficient to support all of the additional healthcare needs that the Medicaid population requires,” said Becker.

 Despite not supporting the Medicaid cuts, Senator Hunter favors the cigarette tax. “I do not support tobacco use, and so I do favor any tax increase to cigarettes that may encourage people to avoid these products,” she said. The cigarette tax increase is expected to generate $350 million in federally matched revenue, which will be used to fund Medicaid. The American Cancer Society said the new tax will help thousands of people quit smoking and decrease smoking-related costs to Medicaid, which last year came to $1.5 billion, according to the organization. SaveSafetyNet.com, an organization promoting “safety net” hospitals that provide care to the indigent, urged legislators to keep funding Medicaid dollars for safety net health providers. Local hospitals Mercy and Saint Anthony are among safety net hospitals that provide care for some of Illinois’s poorest citizens.