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FOR IMMEDIATE RELEASE
April 23, 2008

Gov. Blagojevich fights harmful Bush Administration Medicaid rules on several fronts
Urges Illinois Congressional delegation to vote to halt implementation; joins other governors in support of legal challenge to Bush rules Families USA report estimates Bush Medicaid rules would cost Illinois $487 million in first year alone in addition to job loss and economic decline

CHICAGO – Governor Rod R. Blagojevich today sent a letter urging members of the Illinois Congressional delegation to support a moratorium on the Bush Administration’s proposed changes to the Medicaid program when the issue comes up for a vote in the U.S. House later today.  Late last week, the Governor joined ten other states in filing legal briefs in support of a lawsuit against Secretary of Health and Human Services Michael O. Leavitt to stop federal changes to the Medicaid program.  Families USA released a study earlier today highlighting the devastating effect the regulations would have on the Illinois economy, including job and economic activity losses in addition to an estimated $487.7 million cut in federal Medicaid funding to the state. 
 
“You need only to turn on the nightly news or pick up a newspaper to know that the people of this country are crying out for relief.  Whether it is relief from the cost of groceries, gas or healthcare, families from coast to coast are struggling.  While we’ve worked aggressively to expand access to affordable healthcare in Illinois, a major reduction of federal support for Medicaid would have a devastating impact on our state’s finances and the millions of people we serve,” said Gov. Blagojevich.  “We need to attack these harmful regulations from every angle.  I’m urging our Congressional delegation to again prevent the Bush administration from implementing the rules, and we’re working with other states to fight the rules in court as well.”
 
The Families USA “Bad Medicine” study released today found that lost federal matching dollars for the Medicaid program will have serious consequences on Illinois’ economy.  According to the study, during the first year of implementation, Illinois is projected to lose $487.7 million in federal funding; and $2.5 billion over five years.  As a consequence, if the rules are implemented, business activity in the first year would go down by approximately $1.2 billion, resulting in 10,800 fewer jobs and $418.8 million in lost wages.
 
As more individuals lose their jobs, more people will qualify for Medicaid programs.  This creates a cycle in which the increase in enrollees results in higher Medicaid costs.  The lost federal dollars means the State must pay the increases in Medicaid costs, at a time when revenue growth is slow in Illinois and other states around the country.
 
“The Medicaid program is intended to serve as a partnership between the states and the federal government.  Children and people with disabilities will be among those hardest hit by these regulations, vulnerable populations that cannot afford to lose access to the Medicaid services,” said Illinois Department of Healthcare and Family Services Director Barry S. Maram.
 
Gov. Blagojevich, along with other states’ agencies and officials, are part of amicus curiae, a legal opinion submitted by groups or organizations that may be affected by a legal ruling.  The participating agencies are voicing their support of a lawsuit against Secretary of Health and Human Services Michael O. Leavitt to stop federal changes to the Medicaid program.
 
Illinois joins Kansas, Kentucky, Missouri, North Carolina, Ohio, Oklahoma, Pennsylvania, Tennessee, Utah and Washington in the brief filing.  The states argue that the proposed regulations will shift the costs of the Medicaid program from the federal government to the states.
 
“CMS is shirking its responsibility to the Medicaid program by shifting an estimated $13 billion in federal costs to the states,” said Gov. Blagojevich.  “In Illinois, Families USA estimates the total cost to Medicaid programs would be as much as $487.7 million in the first year.” 
 
The Governor also sent a letter to members of the Illinois Congressional delegation urging them to prevent CMS’ regulations from taking effect next month.  The entire letter follows:
 
Dear Member of the Illinois Congressional Delegation:
 
Today Families USA released a study highlighting the devastating effects Medicaid regulations proposed by the Bush administration’s Centers for Medicare and Medicaid Services (CMS) would have on Illinois’ economy.  The findings come on the same day that the U.S. House of Representatives is expected to take action on legislation that would halt the scheduled May implementation of the regulations. I urge you to support the legislation and delay implementation of the CMS regulations that may result in healthcare coverage disruptions, a $487.7 million reduction in federal funding for Illinois’ Medicaid program next year, and a loss of thousand of jobs.
 
You need only to turn on the nightly news or pick up a newspaper to know that the people of this country are crying out for relief.  Whether it is relief from the cost of groceries, gas or healthcare, families from coast to coast are struggling.  While we’ve worked aggressively to expand access to affordable healthcare in Illinois, a major reduction of federal support for Medicaid would have a devastating impact on our state’s finances and the millions of people we serve.
 
The study released by Families USA shows the damage CMS’ Medicaid regulations would wreak on the Illinois economy.  Under the regulations, the federal government would no longer match each dollar spent in Illinois on Medicaid services.  Those matching funds are essential to creating and maintaining jobs and business activity in Illinois.  Losing that funding could mean losing thousands of jobs, devastating our already struggling economy. 
 
CMS is shirking its responsibility to the Medicaid program by shifting an estimated $13 billion in federal costs to the states.  In Illinois, Families USA estimates the total cost to Medicaid programs would be as much as $487.7 million in the first year, and $2.5 billion over five years. 
 
According to the study, Illinois could lose 10,800 jobs and $1.2 billion in business activity in the first year alone.  For the first year, that amounts to a staggering $418.8 million in lost wages.  The result is a cycle in which more people will be laid off, making them eligible for Medicaid services.  And as Medicaid enrollment increases, so to will the costs to the State at a time when less revenue is incoming. 
 
The Bush administration is playing politics with people’s lives.  Congress must act now to prevent the rules from taking effect.  I look forward to working with you to make sure that Washington does not forget its responsibility to hardworking families all over the country.
 
 
Sincerely,
 
 
Rod R. Blagojevich
Governor


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