Louisiana lawmakers are trying a new approach to determine how much the state will spend on Medicaid services each year, as the program has ballooned to more than one-third of the state's budget and added hundreds of thousands of people during the pandemic.
A Medicaid forecasting panel created by lawmakers last year held its first meeting Wednesday, to create a new process for estimating spending needs for a program that provides health care to 1.9 million people — about 41% of Louisiana's population.
The Louisiana Department of Health currently does its own economic modeling and then seeks funding from state lawmakers to match the forecast, which often overestimates how much money will be needed to cover services. The Medicaid Estimating Conference will involve lawmakers, the Health Department, the governor's chief budget adviser and an outside health care economist, along with financial advisers to the Legislature.
"This program is too big not to have adequate data," said state Sen. Sharon Hewitt, the Slidell Republican whose bill created the conference.
Louisiana's Medicaid program is estimated to spend $16 billion in the current budget year on health care services, the large majority of it federally funded and much of it through managed care companies. Hewitt said the state's putting up $1.8 billion of the cost from its general fund.
But estimating — and restraining — the program's price tag can be difficult.
Many costs associated with Medicaid are out of the state's control. To get federal Medicaid funding, states are required to provide certain services through the program, and they aren't allowed to force people off the rolls if they took boosted Medicaid funds offered because of the coronavirus pandemic as Louisiana did.
Louisiana added more than 300,000 people to its Medicaid rolls since March 2020 when the coronavirus outbreak began.
Daniel Cocran, the state's Medicaid deputy director, said about 70% of that growth was in the Medicaid expansion program. Democratic Gov. John Bel Edwards authorized the expansion when he took office in 2016, to cover working-age adults who don't get health insurance through their employers. Nearly 700,000 people are currently enrolled in Medicaid through that expansion.
Many of those enrollees wouldn't continue to qualify for Medicaid coverage because they now make too much money or stopped meeting other eligibility criteria. But Louisiana can't kick them off the rolls because of the strings tied to the enhanced federal pandemic Medicaid financing.
Those people can be removed from Medicaid only when the federal public health emergency is lifted, Cocran said. It's unclear when that will happen, and then federal regulations describe a lengthy process to bump someone from the program even after that, he said.
President Joe Biden's social safety net expansion legislation pending in Congress also has further restrictions for removing people from Medicaid that would come into play if the measure passes, health officials said.
All of that will be considered as part of the new forecasting process, Hewitt said. She hopes to have the conference's first forecast complete in December or January. The panel's projections will be nonbinding but are expected to have a heavy influence on budgeting. The nonpartisan Legislative Fiscal Office hired a health care economist as part of the effort.
State Sen. Gerald Boudreaux, a Lafayette Democrat on the conference, said he thinks the new approach can help lawmakers determine the true costs of the Medicaid program, but he also cautioned that he doesn't want it to be used to try to limit access to health care services.
"It is very important to a lot of people, more people than some of us realize," Boudreaux said.