Medicaid Cuts Hurt

Go to the web site of the Illinois Department of Health and Family Services and you will find the following description of the Medicaid program:

“Medicaid is a jointly funded state and Federal government program that pays for medically necessary services. Medicaid pays for medical services for children and their caregivers, pregnant women, and persons who are disabled, blind or 65 years of age or older. Primary services funded through Medicaid are physician, hospital and long term care. Additional coverage includes drugs, medical equipment and transportation, family planning, laboratory tests, x-rays, and other medical services.

To receive Medicaid services, individuals must be residents of the state of Illinois, a US national, citizen, permanent resident, or legal alien, in need of health care and/or insurance assistance, whose financial situation would be characterized as low income or very low income.”

It seems that we now have a very different definition of what’s “medically necessary” in Illinois. Together the General Assembly and the Governor cut an estimated $1.6 billion from the FY Medicaid budget when it passed sweeping Medicaid reform legislation (via SB 2840) at the end of May 2012, thereby making significant cuts to Medicaid programs and services. Most of these changes took effect on July 1, 2012.

Reducing the cost of Medicaid services consumed much of legislators’ attention during the Spring Session. A bi-partisan committee worked many hours to analyze the program and make recommendations on “surgical” rather than across-the-board cuts to services, but the end result is that tens of thousands adults and children are not going to get some (or all) of the medically necessary services that they will need in the months to come. Many health service providers and advocates predict that the state will not actually save very much money over the long haul. Instead, costs will be shifted to other sectors of the health care system.

Program eligibility changes result in significant coverage reductions:

  • FamilyCare eligibility was reduced from 185% of the federal poverty level (FPL) to 133%, which is a yearly income of about $30,656 for a family of four.
  • The Illinois Cares Rx Program was eliminated as of June 30, 2012, making patients without health insurance, Veterans Care, or discount programs responsible for the full cost of their medications.
  • The Medically Fragile/Technology Dependent Waiver program will impose a new income limit of 500% FPL, beginning September 1, 2012.

Coverage reductions in adult services include:

  • Chiropractic care is no longer covered
  • Dental care is covered only in emergency cases, i.e., extractions
  • Podiatric care is only be available for patients with diabetes
  • Vision care is now limited to one pair of eyeglasses every two years
  • Adult speech, physical, and occupational therapies are now limited to 20 visits per calendar year.

So-called “utilization controls” have brought increased co-payments in several situations:

  • Adult doctor or clinic visits will now require a $3.65 co-payment (up from $3).
  • Children on All Kids Assist insurance must now pay $3.65 for non-emergency treatment in an emergency room.
  • Children in the All Kids Share program must now pay $10 for non-emergency treatment in an emergency room.

There are also a number of increases in co-payments for adult generic drug prescriptions (from $0 to $2) and brand-name prescriptions (from $3 to $3.65) along with co-payment increases for all services for children in the All Kids Share program (from $2 to $3.65) except generic prescriptions, which will remain at $2. In addition, all adults and children must get prior approval for most medications that exceed a new limit of four prescriptions per month.

There is some good news:

  • The All Kids program and the Moms and Babies program did not receive cuts.
  • The passage of the cigarette tax increase prevented further Medicaid cuts.
  • Cook County Health Care System received approval of a waiver that permits the early expansion of Medicaid services in Cook County as part of the implementation of the Affordable Care Act.

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