Even with health care reform now on Washington’s back burner, Louisiana can make efforts to rein in runaway Medicaid expenses.
Next fiscal year, more than one out of every four dollars collected by the state is projected to fund Medicaid, with the program as a whole spending nearly 40 percent of all state revenues. Incredibly, more than a third of Louisianans, including more than a sixth of all able-bodied, working-age adults, use this form of welfare, with an astounding almost two-thirds of all births in Louisiana covered by the program.
Shelved last month, President Donald Trump’s plan to solve problems of escalating prices and declining availability of private health insurance also addressed Medicaid’s path of profligacy, wastefulness, and lack of good outcomes. It would have used a capitated payment system tied to per patient costs, adjusted annually for inflation, instead of an open-ended draw on the federal government.
Additionally, the reform eventually would have shifted from the federal government to states some costs associated with Medicaid expansion. This would give voters more transparency to vet state leaders' decisions to expand it. Finally, reforms would have granted states more latitutde to design delivery that improves outcomes, principally by encouraging greater client responsibility. States would have also gained freedom to introduce work requirements for able-bodied adult recipients.
These changes would disrupt the confidence game on the issue run by Democratic Gov. John Bel Edwards and his administration. They like to claim, in its present form, that Medicaid expansion in particular saves the state general fund dollars and imply it delivers care its recipients otherwise can’t access. They also argue that capitated payments and reduced federal control would shortchange people needing health services.
But Edwards and his crew won’t tell you that to fund expansion, new state taxes on health insurance premiums and hospitals, passed through to consumers, will cost five times any presumed general fund “savings.” They also will distract you from realizing that the additional $2.2 billion in federal dollars the state will spend next year on expanded Medicaid is yet another spending spree for a federal government already billions in the red. Ultimately, taxpayers will be on the hook for it.
Nor will Edwards and his gang admit that according to numerous studies, making Medicaid more widely available will prompt many adults to drop private insurance and enroll in Medicaid instead, essentially shifting a personal expense to taxpayers. Besides this waste of public dollars, asking those already squeezed by the accelerating cost of private health insurance to pay the way for new Medicaid recipients who can afford to insure themselves is immoral.
And while Edwards, citing federal regulations, always threatens yanking services from people with disabilities at the first hint legislators won’t cooperate with his tax hikes, the contemplated changes would have allowed states to prioritize spending to prevent that. In addition, these reforms could have saved money by permitting increased co-payments and premiums from recipients of Medicaid expansion — nudging them to live healthier lifestyles that curtail doctors’ visits and be more prudent in accessing care.
Fortunately, state leaders can do some of this on their own already. They can institute co-payments that range from the price of a cell phone app to a pack of smokes and, if not reversing expansion, lobby the Trump Administration to allow charging monthly premiums for most of the Medicaid expansion population. Otherwise, the recent trend of allowing more people to ride in the wagon while fewer pull it only increases Medicaid’s unsustainability.
Jeff Sadow is an associate professor of political science at Louisiana State University-Shreveport, where he teaches Louisiana government. He is author of a blog about Louisiana politics, www.between-lines.com, where links to information in this column may be found. When the Louisiana Legislature is in session, he writes about legislation in it at www.laleglog.com. Follow him on Twitter, @jsadowadvocate or email email@example.com. His views do not necessarily express those of his employer.