Are Medicaid premiums on Rauner’s budget radar?

SPRINGFIELD — As Gov. Bruce Rauner prepares for his first budget speech Wednesday, the rookie Republican will be looking for ways to stem a tide of red ink.

Topping his target list is the state’s Medicaid program, which, along with education, accounts for the lion’s share of state spending.

Rauner last week wasn’t offering details about his budget plan in the run-up to his much-awaited speech, but lawmakers expect the businessman to outline major changes to the health insurance program for the poor and disabled.

“I think that would be an area, if I were governor, that I would look at,” state Rep, Bill Mitchell, R-Forsyth, said.

“I do know that’s going to be a major concern of his,” added state Rep. Patti Bellock, R-Hinsdale. “It just has to be addressed.”

Rauner spent the first weeks of his administration warning that a massive restructuring of state government is the only way to deal with the expiration of the state’s temporary income tax increase, an out-of-whack employee pension system and years of unbalanced budgets.

The cost of Medicaid, which pays for everything from childbirth to nursing home care, has been in the cross-hairs of other states in recent years and could provide a roadmap for Rauner to follow.

In Indiana, which Rauner often calls an example of a well-run state, Gov. Mike Pence backed a plan to require able-bodied Medicaid recipients to participate in job-training and work programs as a condition of receiving benefits.

Indiana also has begun requiring premiums of between $3 and $25 a month for qualifying enrollees.

Iowa also has imposed a plan to charge premiums for some recipients. But, enrollees can have some of the fees waived if they participate in wellness programs and risk assessments.

Michigan also is among states charging enrollees a 2 percent premium based on their income levels in order to reduce the cost of the program.

Republicans say premiums, combined with cuts in some services, are likely where Rauner is looking to slash the budget.

“Think about it. You and I have to pay deductibles. It would seem reasonable that recipients would have to pay something for these services,” Mitchell said

Democrats, however, are wary of what Rauner may be looking at.

State Rep. Greg Harris, D-Chicago, said premiums could trigger some enrollees to forego coverage.

“It ends up being a way of driving people out of the system,” Harris said. “It’s very counterproductive.”

Attempts to squeeze savings out of Medicaid aren’t new.

In 2012, Republicans and Democrats teamed together to push through reforms that were designed to save $1 billion annually.

But, the need for more savings is even higher this time around. The expiration of the income tax increase is projected to leave a $5.7 billion hole in the budget. And, the cost of Medicaid is on the rise as part of the expansion of health insurance programs under President Barack Obama.

“This is the critical lesson that we’re seeing: We’re on an unsustainable path,” Rauner told students at the University of Chicago Booth School of Business earlier this month. “We need fundamental structural change and raising taxes alone … isn’t going to fix the problem, and in a lot of ways it’s going to make it worse.”

Mitchell said Rauner will face a skeptical Democratic majority in the House and Senate.

“It’s going to be extremely politically difficult,” Mitchell said.

But, said Bellock, the time for a Medicaid fix is now.

“Our Medicaid program is far more generous than other states in the nation,” Bellock said.