NEW ORLEANS – The Jindal administration’s call for $225 million to $250 million in state health care cuts has reignited the debate over the governor’s decision to reject about $1.8 billion a year in federal money for expanding Medicaid.
State Sen. J.P. Morrell, D-New Orleans, fired the first shot this week, saying the Medicaid expansion money, which Jindal rejected as a part of his opposition to President Obama’s signature health care law, would have helped cover a $1.4 billion general fund shortfall for the fiscal year beginning July 1.
“We are allowing political decisions for someone’s immediate political gain to structure how we do things in the state and that never works out well,” Morrell said.
State Sen. David Heitmeier, D-Algiers, who is an optometrist, says $250 million in cuts to the Department of Health and Hospitals would feel like a $700 million hit to state health care services because most of those dollars are matched by federal money.
Heitmeier says the real culprit in the state’s budgetary woes is the falling price of oil, with the sudden $50 drop in the cost of a barrel of crude slicing the state’s oil-related revenues by $600 million. But he says there is no doubt that rejecting the Medicaid expansion money was a fateful move by Jindal.
“Medicaid expansion would mean about $4.5 million a day to the health care arena in our state where there’s definitely holes we could fill,” he said.
But Calder Lynch, the DHH chief of staff, says the Medicaid expansion has nothing to do with the current budget crisis. First off, if the state had accepted the expansion, Lynch said the new federal funding would have to go to covering services for about 500,000 newly eligible patients, mostly able-bodied adults.
That’s in addition to the pregnant women, children and disabled adults who make up the vast majority of the 1.4 million Louisianans now covered by Medicaid.
“You’re looking at bringing in a whole new segment of the population that’s never been eligible before, over half a million new individuals coming into the Medicaid Program,” Lynch said. “Our estimate is that having that influx in enrollees is going to strain our existing provider network and ultimately add over $2 billion in additional state costs over the next 10 years. That certainly isn’t going to help our short-term budget problem.”
The cash-strapped state would still have to come up with 10 percent of the costs covered by the federal Medicaid program. Meanwhile, Lynch says the program’s poor reimbursement rate for health care providers doesn’t bode well for getting more doctors to handle new Medicaid patients.
But this week, a new study in the New England Journal of Medicine found that aspect of Obamacare has been a significant success, with reimbursement rates in 10 states increasing by about 50 percent.Watch movie online The Transporter Refueled (2015)
Still, Lynch says the financial equation for Medicaid expansion doesn’t work.
“If you’re going to increase reimbursement to cover (the new Medicaid-eligible population), you have to do it for everyone, and for everyone else in our program, the state’s still paying for 40 percent of the costs, and that’s why we simply can’t afford it,” Lynch said.