Gov.-elect John Bel Edwards’ Medicaid expansion timeline hits bump in road; here's what's next _lowres

Advocate staff photo by MATTHEW HINTON--Louisiana Governor Elect John Bel Edwards speaks about his plans after winning the election the day before at the Hotel Monteleone in New Orleans, La. Sunday, Nov. 22, 2015.

On the campaign trial, Gov.-elect John Bel Edwards promised time and again that he would expand the rolls of Medicaid on his first day in office.

His promise to reverse repeated rejections of expanded Medicaid by Republican Gov. Bobby Jindal and open the government health insurance program to more low-income workers was a cornerstone of the Democrat’s campaign. But legal realities have caused Edwards to back off, at least for the time being, while his incoming administration works through a legal glitch raised by the Legislature’s fiscal advisers.

Edwards told reporters Sunday in his first news conference as governor-elect that Medicaid expansion “will be part of the early initiatives that you see in my administration” — but not the first thing.

The communications director for the transition, Mary-Patricia Wray, said, “We are going to do it as soon as we possibly can. But he’s not going to ignore the concerns of the Legislative Fiscal Office. He’s going to address them.”

More than a million Louisiana residents already are on Medicaid, which is paid mostly by federal dollars. The $8 billion Medicaid program accounts for about a third of the state’s annual budget.

Expanding the rolls of Medicaid would qualify about 300,000 more Louisiana residents who make too much money to join now but too little to purchase coverage on the open market. Specifically, the coverage would be open to those making up to 138 percent of the federal poverty level, which this year is $32,913 for a family of four.

Jindal, who recently suspended his presidential campaign, has repeatedly refused billions of dollars in federal incentives to expand the state’s Medicaid rolls, which is an integral part of Democratic President Barack Obama’s signature Affordable Care Act. Jindal, and other Republicans, argued that Medicaid has failed to provide adequate care and that Louisiana’s portion of expansion would cost the state’s taxpayers too much.

Thirty other states have agreed to expand their Medicaid rolls.

Republican legislators batted down multiple attempts over the past few years — several led by Edwards — to adopt the expansion over Jindal’s objections.

During the legislative session earlier this year, however, lawmakers approved a resolution that circumvented Jindal’s veto pen. The measure was based on hospitals assessing a fee on themselves. The money would go into a fund that would help pay the state’s share of the added cost.

Initially, the federal government would pay 100 percent of the cost, with the state’s share increasing to 3 percent in 2017, then up to 10 percent of the total cost starting in 2020.

But the resolution’s mechanism doesn’t work as anticipated and doesn’t create the short-term savings projected.

The Louisiana Hospital Association backed the legislation, House Concurrent Resolution 75. Hospitals treating uninsured people today are paid through another program that requires the state to pay up to 38 percent of the cost.

The federal Affordable Care Act also reduces federal funding for such uninsured care because, theoretically, those patients would now be covered under Medicaid expansion.

The plan outlined in HCR75 includes a guaranteed “base reimbursement level” for certain Medicaid payments, including uninsured care. But the guaranteed reimbursement level won’t allow uncompensated or free care to be reduced in future years to the degree projected, meaning the savings would not be generated, Fiscal Office chief health care analyst Shawn Hotstream said.

So, the Legislative Fiscal Office in early November backed off its projections that Medicaid expansion would save state government $52 million in the first year of expansion and between $102 million and $165 million over a five-year period.

“I don’t believe the hospital guys intended their resolution to read that way,” former state Medicaid director Don Gregory said. They meant total Medicaid reimbursement would not be reduced below a certain level, not per individual program, such as the one that pays some hospitals for care they provide the uninsured.

The Louisiana Hospital Association disagrees with Hotstream’s interpretation.

“We don’t think there’s a problem,” LHA President Paul Salles said.

The legislation intended that the federal money would be used as an offset to the state dollars currently spent on uninsured care, Salles said, adding it would be nonsensical to read it any other way.

Salles said the association is ready to work with the Edwards administration on Medicaid expansion. He sees nothing standing in the way of state implementation.

Once the Medicaid expansion is applied for, Salles said, the association will develop how the assessment will be levied.

Federal approval could be sought as soon as Edwards is inaugurated, said Gregory, who does health-care analysis for the Public Affairs Research Council of Louisiana, better known as PAR.

The state would be able to get full federal funding for the expansion dating back to when it applied for it, which would mean a reimbursement of state dollars spent on uninsured care while the request was pending, Gregory said.

Federal approval could take up to six months.

Edwards would have to get the state Department of Health and Hospitals to submit for federal approval amendments to the state’s Medicaid plan. Since it would be a straight expansion of the existing program, approval should come more quickly than if the state were developing a program of its own.

The health agency would also promulgate rules that would go through the state administrative procedures approval process. Legislators could opt to hold hearings on the expansion and suggest changes, but they could not stop the rules from going into effect.

Even if the Legislature needs to revise its resolution, the “speedy implementation of Medicaid expansion” should not be delayed, said Jan Moller, director of the Louisiana Budget Project, a Baton Rouge-based research group that analyzes fiscal policies from a low- to middle-income perspective and has long supported expanding the program.

“The legislative intent from everybody involved is clear — from the Hospital Association, from the legislators who voted on it,” Moller said. “The intent of the resolution was to minimize fiscal costs. Why would you want to lock the status quo in place?”

Follow Marsha Shuler on Twitter, @MarshaShulerCNB. For more coverage from the State Capitol, follow Louisiana politics at http://blogs.theadvocate.com/politicsblog/.