The pace of Louisiana Medicaid program spending is running $170.7 million more than what’s budgeted, state health officials said Friday.
The projection is based on a financial report as of October, and it includes both state and federal funds. Of the total, $61.1 million is the state share.
State Department of Health and Hospitals Undersecretary Jeff Reynolds said the agency has the funds to cover the spending gap without service cuts or reductions in reimbursements to health care providers.
The state budget for the year that began July 1 appropriated $8.1 billion for Medicaid. The expenditure forecast anticipates spending of $8.28 billion.
Medicaid covers 1.4 million Louisiana residents, most of them pregnant women, children, the elderly and disabled.
The increase is partially due to higher than anticipated enrollment in the government health insurance program for the poor, DHH Chief of Staff Calder Lynch said. Enrollment is some 34,000 more than projected, he said.
The Medicaid rolls jumped by more than 14,000 as people who applied for health insurance through the Affordable Care Act’s federal marketplace were found to be Medicaid eligible instead of qualifying for assistance to purchase private insurance, Lynch said.
Another 20,000 people kept Medicaid coverage while a new ACA-related eligibility renewal system was being implemented, he said. Some would have normally rolled off, he said.
DHH also must make an upfront payment of a state health insurance program premium tax because its Bayou Health Medicaid program is moving to totally private insurance based, he said. The state will recoup the dollars in the next fiscal year, but the outlay must be done in the current year, he said.
“When we built the budget for 2015, the decision to go to the fully capitated (premium-based) was not built in,” Reynolds said. The decision resulted in an extra $14 million having to be set aside for the premium tax, he said.
Reynolds said the agency will look to sources it has relied on in the past to cover increased spending — $54.1 million in drug rebate money as well as $7.1 million in payments due from the federal government on Medicaid claims related to services at state facilities.
“We will continue to monitor this,” Reynolds said.
The October report is an initial snapshot of how the program is faring financially. It is updated through the fiscal year that ends June 30 . DHH shares the report with the state Division of Administration, legislative money committees and others dealing with state finances.