Cig tax to go up $1, cuts to be made to Medicaid beginning July 1

By Jayette Bolinski
Illinois Statehouse News

SPRINGFIELD, Ill. — Illinois Gov. Pat Quinn (D) signed off on a cigarette tax hike and a series of changes to the state’s ailing Medicaid system June 14 to help Illinois save billions of dollars.

The reforms, which will boot thousands of low-income Illinoisans from the Medicaid rolls, include $1.6 billion in cuts, raising the state’s cigarette tax by $1 a pack — to $1.98 — stricter monitoring of Medicaid fraud and reducing payment rates to health-care providers.

The changes were designed to plug a $2.7 billion gap in the state’s Medicaid obligations, and they go into effect July 1. Earlier this week, the state began notifying thousands of Illinois families and individuals by mail that they may no longer qualify for health-care services.

Among the cuts is the elimination of Illinois Cares Rx, a state-only prescription subsidy program mainly for senior citizens. Dental services will be restricted, and some prescriptions will be limited to four per month.

Thousands of families will be cut from the rolls, too, as parents who earn more than 133 percent of the federal poverty guidelines, which equates to about $20,000 a year for a two-person household, will no longer receive Family Care health coverage.

In addition, the reforms end the practice of rolling Medicaid costs from year to year, and they allow the Cook County Medicaid system to limit Medicaid coverage to its residents.

Rates to some provider groups will be cut by 2.7 percent, except for doctors, dentists, clinics, safety-net hospitals and critical-access rural hospitals. Non-exempt hospitals’ rates will be cut by 3.5 percent. Nursing home cuts average 2.7 percent.

One of our most important missions in Springfield this year was to save Medicaid from the brink of collapse,” Quinn said in a statement June 14, crediting lawmakers with cobbling together the reform package. “As a result, we preserved our health care program that millions of our most vulnerable rely upon.”

Jayette Bolinski can be reached at

From the June 20-26, 2012, issue

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