Big Medicaid drop expected

• By MICHELLE MILLHOLLON
• Advocate Capitol News Bureau
• Published: Mar 31, 2009 - Page: 8B

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In the near future, Louisiana could face an even larger shortfall than expected in the money needed to provide health care to the poor, elderly, uninsured and children.

Tax collections inflated by the recovery from the 2005 hurricanes are the source of the problem, state Health Secretary Alan Levine said Monday.

Instead of paying 67.6 percent of Medicaid costs in Louisiana, the federal government is expected to only pay 63.1 percent beginning October 2010. Federal funding cuts also are projected for a children’s health-care program.

The difference in the percentages amounts to millions of dollars.

“The problem is nobody — and I mean nobody including myself — thought the reduction … would be this large,” Levine said.

Commissioner of Administration Angèle Davis did not respond to a request for comment on the issue.

The Jindal administration is proposing a $26.7 billion budget that trims the state’s health-care costs by more than $400 million in the fiscal year that starts July 1. The reduction would decrease the state Medicaid budget from $6.5 billion to $6.18 billion, affecting hospitals, nursing homes, physicians and others.

The federal “stimulus” package is helping with some health-care expenses. From October 2009 to December 2010, states do not have to bear the cost of changes in the percentage of Medicaid expenses that the federal government pays.

The “stimulus” will get the state through part of the 2010-2011 fiscal year, Levine said.

But once the money runs out, the state will have to deal with a shortfall that now is larger than anticipated, he said.

The Federal Funds Information for States estimates Louisiana stands to lose $268 million in health-care dollars in a single federal fiscal year. 

“This is a massive, massive impact to Louisiana,” Levine said.

The decrease is in the percentage of costs that the federal government picks up for the Medicaid and Children’s Health Insurance programs.