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Louisiana Legislature ignores medicaid expansion fallacies
Written by  // Monday, 08 June 2015 11:55 //

Health reformThis space warned two years ago that the parts of the gun had been made, and implored voters not to put it together. But they either were ignorant of or ignored that and did it. Now the Louisiana Legislature has put the bullet in the chamber, leaving it only in the hands of next year’s new body and governor to fire the bullet into the corpus of the people of Louisiana.

 

The passage of HCR 75 by Speaker Chuck Kleckley took the next step, steeped in subterfuge, of trying to shovel money into Louisiana’s budget to satisfy short-term electoral whims of legislators at the expense of needlessly costing Louisianans more in the long run. This resolution allows the state to decide within the first three months of next year whether to have general urban larger hospitals, which they and their affiliated doctors receive the lion’s share of Medicaid funds, pony up money to use as a match for Medicaid – hidden code to foist wasteful and counterproductive expansion of the program through the Patient Protection and Affordable Care Act.

The facts establishing that expansion would have a negligible, if not negative, impact on the health care of its clients while costing far more than at present are well known. And the studies that demonstrate Louisiana would pay upwards of $2 billion extra over the next decade through expansion in return for health outcomes of those covered likely no better than under the current system where health care is delivered to the indigent upon request regardless of their ability to pay probably understate that unnecessary extra expense: data from states that already have expanded show significantly lower forecasts of extra costs than what actually has transpired.

But legislators want to give an opportunity for their futures selves and a new governor to embark on this rash and counterproductive course anyway, through a “sick tax” mechanism: hospitals, if matching funds to qualify for expansion must be paid as they will be beginning in 2017 (giving Louisiana a half-year of a needed match in the fiscal year 2017 budget), kick in up to one percent of revenues to the state, which then they will pass along to insurance ratepayers – including Louisiana taxpayers because they fund insurance for state employees – and any out-of-pocket payers for health care delivery. In short, it’s nothing more than a hidden tax that doesn’t even pretend, unlike the sick tax passed under the guidance of former Gov. Kathleen Blanco then quickly repealed, that hospitals won’t pass the costs along. Worse, if the one percent of revenues doesn’t equal the match, which will be 10 percent from 2020 onwards and likely to be raised dues to federal budget deficits to the horizon, taxpayers must cough up the remainder. Worst of all, federal spending that Louisianans would have to pay for also would increase as a result of acceptance.

The greed of hospital operators combined with legislators selling out the people for electoral purposes to foist this scheme onto the public. The original constitutional amendment formulated in 2013 but passed in 2014 came under the guise of locking in hospital Medicaid reimbursement rates – a bad idea in and of itself that presented even less budget flexibility that is a main cause of the state’s budgetary troubles today that helps drive this money grab – that also added this feature that allowed a reimbursement formula to be set up, through passage of this kind of resolution. In retrospect, it’s clear Kleckley and others followed this path to avoid probable vetoes of Gov. Bobby Jindal, who undoubtedly would have been canny enough to sniff out these surreptitious maneuvers to grease the palms of hospitals with more business and legislators with more money to play with. Unfortunately, the public fell for it as far as the amendment went (which in the text that voters saw did not even mention the potential establishment of a reimbursement formula that could be shaped to Medicaid expansion).

Even as enough reliable conservative legislators seemed to sleep through this resolution to allow its two-thirds approval, hopefully they will be wide awake in the first quarter of the next year, as HCR 75 also designates essentially as the only time period in which this linking of formula to expansion may exist. The hope among those unwisely wanting expansion is that the new governor will work a deal with the Pres. Barack Obama Administration not to have to accept legacy fee-for-service Medicaid, which the state abandoned years ago in favor of a managed capitation system with premium support. Supporters will point to states like Arkansas and Indiana, alleging that a hybrid system can be created that removes the objectionable portions of legacy Medicaid, these being part of the reason why it would waste money.

Yet that fictional assertion astute policy-makers cannot afford to believe. Despite disingenuous publicity to the contrary, the waivers Indiana received make little positive substantive change to the program – something Arkansas already has found out the hard way which led to its abandoning expansion (although it may meet resistance to that by the Obama Administration). While big-government, redistributionist-minded Democrat state Rep. John Bel Edwards would jump in without reservation, hopefully the other Republican candidates that are more likely to triumph this fall, along with majorities on the Joint Legislative Committee on the Budget, would see the stupidity of any such arrangement that did not completely overhaul Medicaid into something like the state’s new program – which the Obama Administration has shown no indication it would be willing to accept. Thus the resolution would expire, and hopefully the idiocy wouldn’t be repeated.

Let’s hope policy-makers come to their senses and take their fingers off the trigger. Only by the public lobbying them to understand that looting its wallets just to allow them to avoid hard budgetary decisions until their terms run out while the people get the shaft will wake up enough of them.

Jeffrey Sadow

Jeffrey Sadow is an associate professor of political science at Louisiana State University in Shreveport.   He writes a daily conservative blog called Between The Lines

Website: jeffsadow.blogspot.com/

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