Senate District 9 Candidates on the Economy, Medicaid
Find out where candidates Daniel Biss and Glenn Farkas stand on different issues.
The candidates' answers have been lightly edited.
The unemployment rate in Illinois is almost 1 percent higher than the national average. At the same time, both Indiana and Wisconsin are doing better than Illinois when it comes to jobs. What do you believe we need to do to create more jobs in Illinois?
Farkas: First thing I would do is to repeal the corporate income tax. We’ve raised that from 4.7 percent, it’s now plus the 2.5 percent replacement tax at 9.5 percent; it’s the third highest in the nation.
Number one, we’ve got to signal to business that we are open to business. We cannot be unfriendly to businesses. I would support repealing that tax so we can compete. We need to show our neighbors to the west that we are no longer bleed businesses.
I said in my opening remarks that we are not an island – Chicago has great cultural advantages, great education advantages, great city, and a great transportation hub. But when businesses and individuals have other opportunities, they will leave. We’ve lost 800,000 taxpayers in 15 years.
So there are people walking out, leaving. Caterpillar decided that they weren’t going to put a plant here. They’ve moved to North Carolina. They’ve directly cited the problems here in Illinois, the fiscal mess. Again, we keep circling back to pensions and Medicaid.
The state we are in right now, we are not in a good bargaining position. You’ve seen on the news where Sears negotiated property tax discounts. You’ve seen CME threatened to leave unless they got discounts. We are so bad economically that we are allowing businesses to negotiate with us.
If we are going to bring jobs here, we’ve got to first realize that we cannot be so far out of the norm with other states and keep those businesses here.
Biss: So when I talk to businesses leaders about the decisions they make regarding where to place new investments, where to expand, the number one concern they have is about the value proposition they have for their tax dollar.
What they say to us is, ‘Look, there’s stuff that the government does is important for us. Education is unbelievably important to us for us to have a successful business and to have a good business climate.’ The transportation network, which is primarily publicly funded, is one of the most valuable assets the Chicago area has for business.
But what we have now is a system where the tax dollar you are putting in, isn’t going first and foremost to pay for a great school system or a transportation hub. It’s going to pay for accrued debt and that’s a bad deal. That’s a bad deal for a business to take. That tax dollar gets taken to pay for a debt that somebody accrued 25 years ago.
The really scary thing they tell me is, ‘That debt is growing.’ The deal is only going to get worse if we don’t turn this around.
This question about fiscal stabilization, fiscal integrity, getting our long-term liabilities lined up with our long-term abilities to raise revenue is the fundamental question that faces our businesses and other businesses to consider coming here.
Now there are a whole series of other subsidiary issues, I think we need to look very carefully at our regulatory environment. We’ve seen over the last few decades a real proliferation of regulations, not in areas where public safety is at risk, that’s where it should be regulated, but rather in areas where it’s rather frivolous and unnecessary and I think that places a real drain on the labor market.
First and foremost, we have to put in place a predictable, affordable, working, fiscal climate so the businesses not only can afford what they have now, they know what they can expect.
Farkas: Illinois is like a racehorse with a 250-pound jockey. We have a lot of great opportunities here but we are just slowing them down with the burden of government, the regulations and the fees. We are the third highest in worker compensation, we are the third highest in malpractice insurance.
If elected, I would try to work with the legislators to find every opportunity we can to lower the fees, lower the regulations, to try to get businesses to want to be here.
Based on projected future expected costs, the Illinois Medicaid program has the potential to swallow up the entire state budget. What can be done to control these costs in Illinois?
Farkas: Medicaid is growing at almost twice the rate of inflation. It’s gone up every year since we’ve had it in 1962.
One of the first things we can do with affordable care, with the Supreme Court decision, it allowed us is to opt out of the Medicaid expansion. When I look at the numbers as a financial person, I see we’ve got 2.8 million people in Illinois on Medicaid. If we expand, we would put maybe another 1 million on Medicaid. We can’t pay the bills we’ve got right now. We came into fiscal 2012-2013 with about $8.5 to $9 billion of unpaid bills from the state, about $1.5 million of that was Medicaid. I don’t believe adding to that roll is going to help us in any way get a control of those costs.
When you are in a big hole like we are, adding to this cost by expanding Medicaid, even though the Federal government says, ‘Hey we are going to kick in some dollars for use for the first few years and we’ll decrease it over time.’ I’m pretty simple about the Federal government; they’ve got $16 trillion in debt. What happens when we add all these people on the rolls and the government starts to cut off the spigot for funding? Now we’ve exploded the number of people on Medicaid. We need to step back, figure out what we have, make some adjustments, make some cuts and try and get this thing under control before we even think about expanding the program.
Biss: When the 2012 legislative session started, we finally began to focus on Medicaid in a way that was quite overdue. We passed an absolutely sweeping and very painful package of reforms.
So first of all, what was the goal? The goal was to get $2.7 billion in savings because that was how short we were going to be if we didn’t do something. SO there was $1.6 billion in cuts—62 different cuts, eligibility cuts, program cuts, utilization cuts. It sounds easier to say cuts, it sounds harder to say take away the medical technology that is necessary for a child to survive, it sounds horrible to say stop giving prescription drugs to low-income seniors. Of all of times the times I’ve had to push the green button that was toughest time.
But it was the right thing to do because of how serious the shortfall was. So we did that, we made those cuts. We also raised the cigarette tax by $1 a pack. We understand that we couldn’t get to that $2.7 billion on spending alone. We had to find a balanced approach with all available spending and revenue options. We also did a rate cute to some providers to fill in the rest of the whole, so that everybody had to give something. Something came from taxes, something came from programs, something came from providers.
Most importantly, the big piece of those programmatic cuts were based upon new efforts we are going to undergo to really make sure we are avoiding any kind of systemic fraud in the Medicaid program. Because what we need to do, to get back to the question, is to stem the growth. It’s the growth of the Medicaid program that’s been absolutely devastating our budget. And those transformations in the eligibility verification are what are going to be useful in stemming that growth going forward. I see my responsibility now is making sure we implement those correctly, track the results and make adjustments needed to keep those costs down overtime.
Farkas: We are going to have to stem the growth, there’s no doubt there. We are also looking at, based on the Civic Federation report, about $22 - $23 billion in five years that would be swallowed by Medicaid. We are going to have to continue to slow the growth, look for cuts.
Ohio, in their version, what they did with Medicaid, was they analyzed the data and they saw that 4 percent of the people were taking 50 point of the spending. So we are going to need to do a deep dive into the numbers, to figure how to cut the fraud, the waste and look at where cost is going to try to figure out how we can get a handle on this. Medicaid, is unlike pensions, that’s a math problem, you figure it out. Medicaid, you have no idea how much the costs are going to be, how many people are going to get sick. It’s a very tough problem to solve.
Would you support a decrease in the rates Illinois pays doctors that treat Medicaid patients? If not, what are of the program do you think we should focus on the most in order to bring costs down?
Biss: When we put together this historic package that we passed in May, everything was on the table to begin with and everything wound up on the table in some form at the end of the day, But we were fairly light on the rate cuts, simply because Illinois pays lower rates to doctors. And to boot, we pay them late. We felt given the challenge of finding adequate Medicaid providers, particularly specialty providers down state, it didn’t make sense to make a real deep rate cute.
Going forward the fundamental question is how we implement a program in a way that really achieves those savings that we needed to achieve in order for the whole thing savings to be viable.
Now on that point, let me say a word about the Affordable Care Act. The Affordable Care Act is the realization of a very long held policy goal in this country—finding a way to cover everybody, somehow. Do we want to do that? Do we want the government to play a role in making sure that everybody in this country has access to health care? That’s a legitimate question and some people say no, that’s not the right thing for the government to do.
Here’s what I say: Number one, I’d prefer our country not to be a place where poor people die of terrible disease. Number two, I want our country not to be a place where somebody with a great idea, can’t go start the business that’s going to change the world because they are terrified of the opportunity of covering their spouse with a preexisting condition.
So this fundamental goal, of finding a mechanism via the federal government to cover everybody, I think it’s one of the great policy achievements in the last 50 years of this country.
If you want to have a functioning health care system, including one who’s cost-growth is manageable, we have to be pointing toward that goal. That’s why I’d very proudly say that as State senator, I would support the Medicaid expansion needed to fully implement the Affordable Care Act in Illinois.
Farkas: I don’t think we can cut much more. The doctors in this state are being squeezed by Medicaid getting their rates cut. We haven’t added a slew of doctors so I don’t believe we can cutting the doctor’s pay rates because they are just going to throw up their arms and say, ‘Hey, I’ve got rent to pay, I spent a lot of time at school, I’ve got a lot of costs, I’m just not going to take Medicaid patients.’
So, yeah, at the end of the day this is a great program. We’ve put all these people on the program but there are no doctors to treat them, so they end up back in the emergency room again.
I think we are jumping into this Medicaid expansion a little too fast. We don’t have a handle on the situation here at home in Illinois. This brings us back to the Affordable Care Act; I’m not in favor of that plan, as well.
Yes, we want all people to be covered. I would like to see private insurance take more of a driver seat in this. I don’t believe having the Federal government take a large control over the health care system is a good thing. The Federal government has a long history of making a lot of promises they don’t keep either. So $16 trillion dollars in debt, adding another entitlement program into the mix is not something I’d support. I don’t think that’s good for Illinois to expand Medicaid here either.