Medicaid expansion is working well in Louisiana. It is saving the state money. And reverting to the old status quo — where low-income adults were shuffled off to the charity hospital system when they get sick — would not help the state’s fiscal situation but would instead make it worse.
These facts were lost on the Pelican Institute’s Chris Jacobs (“Medicaid Reforms Can Stave off Louisiana’s Fiscal Cliff,” Feb. 3), who blames Louisiana’s fiscal problems on Gov. John Bel Edwards’ decision to expand Medicaid eligibility to include adults who earn below 138 percent of the federal poverty rate. He also said expansion is to blame for the long waiting lists for people with disabilities who want home- and community-based services.
Jacobs is wrong on both counts. Which he would have known if he had a basic understanding of how Louisiana’s Medicaid program is structured:
“Traditional” Medicaid covers people with disabilities, elderly people in nursing homes, pregnant women and children from low-income families. For these populations, the state pays about 36 percent of the cost, with the federal government picking up the remaining 64 percent. The same match rate holds true for the medically uninsured who receive charity care.
The state gets a much better deal for the 464,000 people who’ve gained coverage under Medicaid expansion. Here the state is responsible for just 6 percent of the cost, with the federal government paying the rest. The state’s 6 percent share comes from dedicated taxes paid by hospitals and private health insurers. These taxes can’t legally be used to pay for anything except the state’s costs of Medicaid expansion, so if expansion were eliminated that revenue stream would also disappear.
If Louisiana were to take Jacobs’ advice and start “phasing out” Medicaid expansion, people would lose their health coverage. When health problems arise they would be forced to seek charity care in emergency rooms. That “charity” care would then be paid with Medicaid dollars, with the state picking up 34 percent of the cost using general-fund tax dollars instead of dedicated funding.
Medicaid expansion is not “crowding out” other budget priorities, as Jacobs claims. It is doing the opposite — freeing up state tax dollars that would be spent on indigent care for other priorities such as public safety, higher education, and home-care services for people who are waiting for care.
The state’s fiscal cliff is real. State revenues are projected to drop by $1 billion next year due to the expiration of temporary taxes. Elected officials should be looking for ways to replace that revenue, instead of unfairly scapegoating a Medicaid program that is part of the solution.
executive director, Louisiana Budget Project