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Illinois Budget

Illinois Gov. Pat Quinn delivers the State of the Budget Address to a join session of the General Assembly in the House chambers in Springfield, Ill., on Wednesday, Feb. 22, 2012. (AP Photo/Seth Perlman)

SPRINGFIELD, Ill. • Gov. Pat Quinn today proposed a $1-a-pack tax on cigarettes and major cuts in the state’s Medicaid system that will affect both hospitals and low-income patients, saying it’s needed to “save the entire Medicaid system from collapse.”

The proposal is part of an attempt to cut $2.7 billion from the government medical program that serves low-income citizens. The plan would entirely eliminate some existing services to state Medicaid patients that aren’t required by federal law, such as group therapy and chiropractic treatment. Other services, like eyeglasses and detoxification, would be reduced. Even adult incontinence supplies would be limited.

“We have to act today,” Quinn told reporters in a statehouse news conference. He said failure to address the Medicaid debt “will harm other parts of our government in Illinois,” and will get worse by the year.

The Medicaid system’s perennial shortfall is affecting the rest of Illinois’ troubled fiscal picture, Quinn said. “We have to bring it back to earth.”

The state Medicaid system serves some 2.7 million low-income Illinoisans, and currently has a $1.9 billion backlog of unpaid bills to hospitals and other providers. The proposal would address that issue in part by lowering the rates that the state pays those providers.

The state’s top hospital lobbying group called the proposed rate reductions to providers “too drastic and too rash to impose on the state’s already fragile health care system.”

The proposal now goes to the Legislature, where its chances of being approved intact are questionable.

Republicans immediately attacked the Democratic governor’s plan for including a tax hike.

“We stand . . . against any tax increases to solve our Medicaid crisis,” Senate Republican Leader Christine Radogno and House Republican Leader Tom Cross said in a joint statement, referring to the cigarette tax. They said the proper place to make up the cost is in “reforms and cuts, not revenue enhancements.”

Democrats worried that some of the proposed cuts to patient services would hurt the state’s poorest citizens. “We want to protect the patients in these hospitals,” said Sen. Bill Haine, D-Alton. He said he agrees with Quinn’s plan to restructure the eligibility requirements so those services are going only to those who actually need them.

Quinn’s proposal includes:

• Cracking down on Medicaid fraud, "controls" to prevent over-use and waste, and "elimination or reduced coverage of certain optional populations and services."

• Rate reduction to hospitals and other providers totaling $675 million.

• A $1 per pack increase in the state cigarette tax, totaling $337.5 million

• Cuts and reductions to 58 separate items totaling $1.35 billion. The proposed service cuts would include eliminating group psychotherapy, adult chiropractic service and adult dental services. The proposal would put new limits on prescriptions, put limits on how often clients could use detoxification services, and limit clients to one new pair of eyeglasses every two years.

The proposal also would impose a $10 co-pay on patients for non-emergency use of emergency services. And tt would reduce Medicaid coverage of “incontinence supplies” from the current 300 per month per patient to 200 per month.

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Our earlier coverage:

UPDATE 12:55 pm: Quinn's office has put out a written statement outlining the changes he will propose this afternoon. From the statement:

• Cuts, reductions and efficiencies to 58 separate items totaling $1.35 billion (50 percent)

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• Rate reduction to providers totaling $675 million – (25 percent)

• Additional revenue through a $1 per pack increase in the cigarette tax totaling $337.5 million (12.5 percent)

• 100 percent federal match funding from the increased cigarette tax totaling $337.5 million (12.5 percent)

The statement says the "cuts and efficiencies" will include cracking down on Medicaid fraud, "controls" to prevent over-use and waste, and "elimination or reduced coverage of certain optional populations and services."

Optional services include things like chiropractic treatment and psychotherapy.

SPRINGFIELD, Ill. • Gov. Pat Quinn today will reveal how he proposes to trim $2.7 billion from the state's Medicaid costs, a goal he outlined earlier this year.

Medicaid is the government medical program that serves almost 3 million low-income Illinoisans. Quinn has called for cutting costs in the program as part of a wider attempt to rein in the state's backlog of unpaid bills, which stands around $9 billion.

Ideas floated from the administration and elsewhere lately include a $1-a-pack tax on cigarettes, as well as lower Medicaid payments to hospitals and doctors, changing eligibility criteria to reduce the Medicaid rolls, and ending payments for things like chiropractic treatment.

Quinn will speak to reporters in his Springfield office at 3 p.m. today.