Rauner Goes After Healthcare Costs

Published February 25, 2015

Illinois Gov. Bruce Rauner wants to reduce what the state spends on health insurance for its own employees as well how much money it is funneling into Medicaid.

“(B)ringing health care benefits more in line with those received by the taxpayers who pay for them, we save an additional $700 million,” Rauner said last week during his budget address.

But the governor acknowledged this proposed savings would only be fully realized if state worker unions cooperate.

“We recognize that some of these reforms cannot be achieved through legislation alone,” he said. “Some must be achieved through good faith bargaining and I hope that those on the other side of the table are as committed as I am to achieving the types of meaningful reform that are necessary for Illinois’ future.”

Union Rejects Changes

Moments after the speech, the state government’s largest union was sounding the alarm.

“The governor said he seeks to short-fund the health plan for state and university employees who have already shouldered significantly higher healthcare costs in recent years,” said Roberta Lynch, president of Council 31 of the American Federation of State, County and Municipal Employees.

“If he intends to propose further changes to health coverage or employee costs, the governor acknowledged he must do so as part of state contract negotiations now under way,” Lynch said.

Officials with the governor’s Office of Management and Budget countered that state employees receive health benefits far more generous than most workers in the private sector.

Rauner’s proposal would be to offer these employees the equivalent of what they would receive if they were enrolled in an Obamacare “Bronze Plan.”

This would save state taxpayers between $700 million and $900 million annually, according to the Office of Management and Budget.

Medicaid Cuts

Rauner also is proposing reducing state funding for Medicaid by cutting payments to hospitals and nursing homes.

Officials within the Rauner administration said Medicaid cuts are necessary to balance the budget. They said they viewed cuts to providers as preferable to forcing patients off the Medicaid rolls.

Nursing homes and hospitals would receive 12 percent reductions in payments, which would result in $1.5 billion in savings for the state, according to the Rauner administration.

Maryjane A. Wurth, President & CEO Illinois Hospital Association countered said the “governor’s Medicaid proposal – a drastic $1.5 billion spending cut as well as harmful 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 health care delivery system.”

Scott Reeder ([email protected]) is executive editor of the Illinois News Network, where an earlier version of this article first appeared. Reprinted with permission.