Monday, 12 October 2015 18:52

Jon Bel Edwards's Louisiana Medicaid Expansion wrong or distorting

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edwardsIf by his reaction to partisan criticisms of his position to expand Medicaid gives voters an indication of gubernatorial candidate state Rep. John Bel Edwards’ command of facts and use of logic, then a vote for him backs someone who has neither ability.


The Democrat got upset when a Republican Governors Association ad pointed out he had sponsored this year a resolution to enact the Medicaid expansion portion of the misnamed Patient Protection and Affordable Care Act. That measure went nowhere, but the Legislature did pass a resolution allowing it and the governor to act in the first quarter of next year to assess a fee on many hospitals to pay for the state’s share of expansion, which then undoubtedly would be passed along to health insurance ratepayers and taxpayers.

Other major Republican gubernatorial candidates have expressed qualified desires to expand Medicaid. Public Service Commissioner Scott Angelle wants to pursue a hybrid public/private strategy as in Arkansas – apparently oblivious to the fact that this meant that state had to accept such restrictive rules that the cost overruns from these now has it trying to abandon the effort. Lt. Gov. Jay Dardenne seems to want to accept the arrangement as is except with a provision that the federal government not raise the proportion the states are to pay into it, known as “cost blending” – except that the fiscal evidence shows cost blending is approaching inevitability. Sen. David Vitter seems most dubious about expansion, averring that he would look at it as long as it undergoes programmatic changes that likely radically would overhaul Medicaid as a whole.

But only Edwards wants to accept expansion in unadulterated form. In defense of that criticized by the ad, he responded by saying the state would save money in its first year of expansion and that it would prevent from sending out of state “$1.6 billion” annually in federal taxes.

Remarkably, his statement not only contains a serious omission of fact, but also a bald-faced lie. Because the law has the federal government paying the entire load for the first few years, financially that would produce a net benefit for Louisiana were expansion to take place this fiscal year. But the problem is after next year states must start paying a portion, rising to the alleged 10 percent ceiling by 2020 (even as the fiscal imperative towards cost blending almost guarantees at some point that will increase at some point).

And that will cost Louisiana taxpayers tremendously within the next decade. Had expansion occurred at the beginning of eligibility to do so, over the fiscal year 2014-23 period the forecast made at the beginning of the period showed the extra cost to the state being $2.08 billion. After that period, using the most optimistic scenario the annual extra cost initially was predicted to be $346 billion in FY 2023, growing at 8.8 percent a year. In other words, in the 2020s the state would spend an extra $4 billion, in FY 2029 coughing up $574 million additional than without expansion – almost the entire general fund allocation for higher education this budgetary year.

Worse, Edwards tries to perpetuate the myth that passing expansion in any way would divert federal tax dollars paid at present by Louisianans to fund the program back to the state. He fundamentally misunderstands how Medicaid operates, as a matching grant program where dollars spent by a state are reimbursed in part by the federal government. There is no pot of money that states draw upon if they accept expansion that gets taken by other states that do if they don’t.

Whatever tax dollars flow out of Louisiana because of expansion is because other states chose to expand, inflating federal costs that if all states had expanded would have been an extra $638 billion from 2013-2023. It has nothing to do with Louisiana wanting to make the same poor decision and would happen regardless of whether Louisiana expanded. In fact, doing so would increase the potential tax burden on Louisianans (and all American taxpayers) in order to pay for the billions of extra dollars spent by the federal government in Louisiana.

At best, Edwards presents a very distorted picture of the fiscal impact of expansion; at worst, he conjures a mendaciously fictitious one. Neither speaks well of his factual knowledge nor ability to use facts to reason validly – qualities probably most voters prefer in their elected officials.

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