Gov. Pat Quinn previewed some tough budget choices Tuesday, saying he wants to cut $2 billion from the state's Medicaid budget to help solve the state's fiscal woes.
The Democrat said he wants to tackle restructuring the health care program that covers 2.7 million poor and disabled Illinoisans, but he didn't provide specifics.
"We want to have better health care and wellness for those who are Medicaid recipients," he said. "That may mean we step on some of the toes of some of those providers in the system. Some of those sacred cows may have to be challenged."
Some options for restructuring the system are shrinking payments to hospital and doctors, cutting benefits and reducing how many people are eligible.
Reforming Medicaid won't be easy, particularly in an election year. Last year, Quinn proposed cutting payment rates for providing care under the Medicaid program, which would have meant a reduction in what state government owes. But state legislators did not approve it.
The state's Medicaid budget is about $14 billion, which includes federal money. The state contribution is around $8.6 billion.
However, the state has paid some costs out of future budgets, and there has been buildup of late payments. The backlog of unpaid Medicaid bills is expected to reach $1.8 billion by the end of the fiscal year.
Quinn said he also wants to reform public pensions system this year; the state's five state-employee pension systems are underfunded by about $83 billion.
He said he will look at employer and employee contributions, cost of living adjustments and the retirement age. Previously, he has suggested making local school districts pick up the employers' portion of teacher retirement benefits.
"If we want to have adequate resources for education and public safety and all the other important things in life, we're going to have to deal with this very difficult issue," he said Tuesday as he addressed the City Club of Chicago.
Quinn also said he wants to reform the state's tax system, which he says has "too many loopholes." He offered no details.
Quinn will unveil his state budget on Feb. 22 at a time when Illinois's backlog of unpaid bills is at $9.2 billion and expected to continue growing.