If you are the governor of a small state and you criticize the president of the United States every time you take a breath, then you ask the health agency in the president’s administration for a very significant discretionary waiver — what do you expect to get?
Put that way, we wonder why anyone thought Gov. Bobby Jindal had much of a prayer for the waiver he used to fund a privatization of most of the state’s old charity hospitals. Because not only did the financing provisions deserve scrutiny under federal rules — Louisiana has cheated the U.S. government in various ways many times in the past — the waiver was constructed to pad the state budget that is chronically in crisis under Jindal’s administration.
Many of the privatization contracts were approved by the Jindal-dominated LSU Board of Supervisors, with dozens of pages blank, to be filled in later; it’s as if the board and the governor expected the federal Medicaid administrators not to read the Louisiana papers about the chaotic privatization process.
Bad government should not pay, but an unfortunate consequence is that the rejection of the financing scheme could now create a major financial crisis in state government.
The U.S. Department of Health and Human Services rejected the advance lease payments used to match Medicaid funds and, thus, to balance Jindal’s state operating budget. In theory, if all the lease payments are called into question, that could cause up to a $440 million hole, requiring major budget cuts or new taxes to fill. But in practice, Jindal can appeal the HHS ruling for a considerable while, further kicking the can down the road.
And on the operating principle of “kick the guy in the teeth and ask for favors,” the governor is very likely to spend most of that time denouncing the president and the feds and anybody else he can blame.
What is striking about this is not the HHS ruling but its narrow focus on the financing mechanism. The privatization of the hospitals was explicitly not overturned or challenged in the HHS ruling.
What that means is that the dismantling of the old Charity Hospital system is an accomplished fact. If you want to start making a list of the governor’s legacies in state government — he leaves office in January 2016 — one of them is that dramatic change in delivering health care to the poor.
Nine monuments to Huey P. Long’s liberalism are now either closed or changed into public-private partnerships that are essentially to be funded by Medicaid in the future, even if the state still technically owns the buildings.
Health care is still going to cost the Louisiana taxpayer something, as Medicaid funding must be earned with state matching funds.
But whatever the federal administration thinks of Jindal, he has won most of what he wanted, and if the new public-private partnerships run into trouble later, he’ll probably be long gone from the State Capitol by then.