Illinois Gov. Bruce Rauner (R), has proposed cutting state spending on Medicaid by $1.5 billion, or roughly 10 percent.
The proposed cuts, which the governor announced on Wednesday evening, are part of more than $6 billion in total proposed cuts in state spending in areas such as education, healthcare and local governments. Gov. Rauner also called for lowering pension benefits for state workers, according to The New York Times.
"We must be willing to take actions we'd rather avoid, and make decisions that may seem unpopular in the short run, but serve the best interests of the people of Illinois in the long run," Gov. Rauner said Wednesday. "The budget outlined today is the budget Illinois can afford, and that in itself is an example of 'thinking anew.' Because for far too long we have been living beyond our means—spending money that Illinois taxpayers could not afford."
But Illinois Hospital Association President and CEO Maryjane A. Wurth said the proposed $1.5 billion spending cut, as well as policy changes, "would take the state in the wrong direction and undo the substantial, groundbreaking progress being made to transform the Medicaid program and the state's healthcare delivery system" and have a negative effect on the economy. As an example, she said a 10 percent spending cut to hospitals alone would mean the loss of more than 8,200 jobs and $1.1 billion in economic activity.
She also cited various evidence that the program has been cost effective and provided people in Illinois with a return on investment, such as Illinois being ranked as 49thin the nation in Medicaid spending per enrollee, as well as the fact that state taxpayer costs per Medicaid beneficiary have dropped an average of 1.2 percent per year over the past 10 years.
"To the extent that the State does not adequately fund Medicaid, these unfunded costs are shifted to middle class families through higher insurance premiums, co-payments and deductibles," she concluded.
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