The projected deficit in Louisiana’s health insurance program for the poor is growing as more residents are signing up for coverage.
A new financial report circulated among legislative leaders forecasts a $530 million shortfall in Medicaid during the fiscal year that ends June 30.
The bulk of the shortage is associated with increased enrollment in Bayou Health, the Jindal administration’s program that privatized health care for most of Louisiana’s 1.4 million Medicaid enrollees. The state pays five private insurance companies to manage Medicaid recipient care.
In the last month, the program experienced a 2,000-enrollee jump — increasing Medicaid enrollment beyond forecasted levels.
With that increase, state health economists adjusted the forecast to project similar growth continuing through the end of the fiscal year.
Part could be related to LSU hospitals’ new private managers working on getting as many patients with no insurance signed up for Medicaid if they are eligible.
The increase in enrollment also is coming at a time when the federal Affordable Care Act is putting emphasis on everybody getting insurance. When people seek coverage through health insurance exchanges, many find they are eligible for Medicaid instead.
The projected deficit in the $8.38 billion Medicaid program must be closed by year-end by actions of either outgoing Gov. Bobby Jindal or incoming Gov.-elect John Bel Edwards. Medicaid expenditures — state and federal — are about one-third of the state’s $25 billion budget.
Filling the $530 million gap will require the state coming up with about $200 million. The rest would be federally funded. The state pays about 38 percent to the federal government’s 62 percent.
State Department of Health and Hospitals officials released a statement through the agency’s communications office downplaying the increased projected deficit.
“The report ... is only the department’s current projection of the FY16 expenditures for the Medicaid program,” DHH press secretary Amelia Burns said in the statement. “Based on our experience in prior years, it is not uncommon for this monthly projection to fluctuate up and down throughout the course of the fiscal year.
“DHH is currently working with the administration on a proposal to address the Medicaid program’s deficit, and we look forward to working with the incoming administration to finalize the solution to address this deficit in the coming months.”
Bayou Health had been projected to require $3.24 billion. Current projections are at $3.75 billion — $516 million more.
In late October, state health officials said the agency was running a $516.1 million budget shortfall and said they had identified “internal solutions” to close the gap. At that time, it was attributed to more Medicaid recipients and health care inflation.
The agency proposed using extra state dollars from state mental health hospitals and LSU hospitals that went unused in prior fiscal years. There also was an increase in provider fees paid to DHH by the Bayou Health plans, nursing homes, intermediate care facilities and pharmacists. Another smaller amount came from reduction of a hospital service district program because of privatization of West Jefferson Medical Center.
The plan evaporated quickly as the solutions DHH had identified were instead used by the Jindal administration to plug budget holes because of revenue shortfalls.
Now DHH is back at the drawing board searching for even more money to fix a $530 million hole.