Medicaid cost to rise

• By MARSHA SHULER
• Advocate Capitol News Bureau
• Published: Nov 4, 2008 - Page: 9A - UPDATED: 12:05 a.m.

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Louisiana’s $7 billion-plus Medicaid health insurance program for the poor will need another $450 million next state budget year just to keep the status quo, the state’s health chief said Monday.

Department of Health and Hospitals Secretary Alan Levine said the federal government will require the state to put up a larger share of the program costs.

That change alone will mean the state will have to come up with at least $200 million in additional funds, he said.

The state already faced rising costs associated with normal Medicaid program growth as more people qualify to be served, Levine said.

Levine said DHH submitted the request for increased funding as it submitted its initial budget proposal for the fiscal year that begins July 1.

“It’s our first big problem next year,”  Levine said during a meeting with The Advocate’s editorial board.

Levine said also looming is a federal claim to recoup $771 million from the state because of problems in three programs. The debt dates back a decade, Levine said, and the state is trying to negotiate a settlement.

State agencies submit proposals annually to the governor’s budget office.

Levine said the $450 million increase translates into a standstill budget for DHH.

State government economists are projecting a downturn in state finances for the coming budget year and potential for spending cuts.

The requirement that Louisiana pay more of its Medicaid program costs is based on  economic growth in the wake of 2005 hurricanes that have been plugged into a federal formula, Levine said.

“If your state does better economically your federal match drops.”

Today, the federal government pays 72 percent of Louisiana’s Medicaid program costs while the state pays the remaining 28 percent.