Politics                                                             

Budget plan tries to 'wish away'
Medicaid debt and school finance

Rank-and-file Republican lawmakers want to do more to reduce the backlog of Medicaid bills. GOP freshmen are learning the job is not all fast-track fun

By CHARLES N. WHEELER III

As I was going up the stair I met a man who wasn 't there.
He wasn't there again today. I wish, I wish he'd stay away.

Once upon a time in an earlier America — long before MTV and compact discs — the pop music charts were topped by a little ditty about an unhappy fellow who kept running into someone he preferred to pretend did not exist.

Judging from Gov. Jim Edgar's proposed Fiscal Year 1996 budget, the song's hero may have a kindred spirit in modern-day Illinois. Like the protagonist in the old Hit Parade number, Edgar in his spending blueprint ignored a huge Medicaid deficit that is the state's most critical financial problem.

Yet just as the musical character's lament suggests, the backlog of bills for health care for the poor, the disabled and the elderly can't be dispelled by wishing. The numbers are staggering. When the current fiscal year ends on June 30, the state expects to owe hospitals, nursing homes, doctors, pharmacists and other providers some $1.3 billion. Budget officials note, however, that only about a third of the bills will be more than 60 days old, the payment cycle the administration would like providers to consider the norm. (Most of us, of course, are lucky if we get a full 30 days on our credit cards.)

In fiscal 1996, Edgar hopes to trim another $100 million, ending up at about $1.2 billion, again two-thirds of it less than 60 days old. Even this modest improvement won't be achieved, the governor said, without harsh medicine for health care providers. His prescription calls for extending a current tax on hospitals and nursing homes that is supposed to end in July, continuing a rate freeze originally imposed only through FY 95, and cutting some $400 million in bonus payments to hospitals that treat large numbers of poor people. The package would cost providers more than $1 billion in taxes and lost revenue. That could force 15 to 20 hospitals to close their doors, according to hospital association leaders.

In his budget address, Edgar blamed the Medicaid mess on federal bureaucrats, who have yet to approve his plan to shift some 1.1 million Medicaid clients into managed care. And he stressed that federal obstinance came despite President Bill Clinton's promise to give the nation's governors greater leeway in designing welfare programs.

Attractive a target as it may be, though, the federal bureaucracy is not really a suitable scapegoat for several reasons. The administration's own estimates show the managed care initiative, called MediPlan Plus, would have shaved only about $120 million from Medicaid costs in the coming fiscal year.

Moreover, federal officials and outside experts question even those savings, saying they doubt the program can be put in place as smoothly and function as well as state officials are predicting. For example, the state's only other large-scale managed care experiment. Healthy Moms and Healthy Kids, has fallen short of expectations for both savings and access to care. And that program involves only about one-tenth as many people as MediPlan Plus.

In addition, another study pointed out that Edgar's plan targets some 1.1 million welfare mothers and their children. But they account for only about one-third of the state's Medicaid spending, the health researchers found; the other two-thirds covers medical and nursing home bills for some 400,000 disabled or elderly persons, who would not be moved into managed care.

In similar fashion, the governor glossed over another issue critical to the state's economic well-being, school finance. Rather than tackle Illinois' wretched record of support for public education, Edgar called for yet another blue-ribbon committee to study school funding. Perhaps the new panel could start by dusting off the report issued two years ago by the Illinois Task Force on School Finance.

6/April 1995/Illinois Issues

After more than two years of study, the task force concluded that 80 percent of the public school children in Illinois attend schools in districts that lack the financial resources needed to provide an adequate education. In response, the legislature proposed a constitutional amendment to force the state to provide the majority share of school funding.

Its huge price tag — as much as $2 billion by some estimates — turned Edgar and most of the business community against the proposal, and it fell short in the 1992 election. The situation has not improved since then. When the task force began its work, the state picked up 38 percent of the tab for elementary and secondary education; this year, the state's share is less than 33 percent, and it could well decline further under Edgar's proposed FY 1996 budget.

In opting to sidestep Medicaid and school funding, Edgar placed legislative politics above public policy, in hopes of offering a minimalist budget that could win approval from the Republican majorities in the Senate and the House without the need for Democratic votes that might come at a high price. Even so, Senate President James "Pate" Philip (R-Wood Dale) and House Speaker Lee A. Daniels (R-Elmhurst) are unhappy with the proposed extension of the provider tax, which ultimately drives up hospital and nursing home costs for their suburban constituents to subsidize health care for poor people, especially in the inner city and rural areas.

Many rank-and-file GOP lawmakers also are displeased with the provider tax extension, but say they want to do more to reduce the Medicaid backlog. Republican freshmen, meanwhile, are learning that the job is not all fast-track fun. After two months of living out their campaign brochure fantasies — bashing welfare moms, smashing union teachers, trashing trial lawyers — the newcomers have been introduced by the governor's budget to the real world of state government, one in which tough votes may be required.

The challenge for Republicans who don't like Edgar's proposal is to find a credible alternative that will allow them, like the governor, to ignore those issues they wish were not there. *

Charles N. Wheeler III is director of the Public Affairs Reporting program at Sangamon State University in Springfield.