John Bel Edwards’ executive budget for fiscal year 2017-18 proposes to spend $2.2 billion in state general funds to provide Medicaid health coverage for 1.7 million Louisiana residents. That translates to a $229 million reduction in state spending on Medicaid – or 12 percent below current-year levels after accounting for inflation. But overall spending on Medicaid is projected to increase from $11.7 billion in the current fiscal year to $13.1 billion in the budget year that starts July 1. The growth is mainly due to a $1.8 billion increase in federal Medicaid funding, a 21 percent increase. The jump in federal funding is mainly due to the extension of Medicaid coverage to low-income, working-age adults.
Source: Division of Administration
Medicaid expansion has allowed more than 408,000 low-income Louisianans to gain health insurance since enrollment opened in July 2016. The Louisiana Department of Health expects another 50,000 to 60,000 people to enroll next year. But the costs to the state are low compared to other Medicaid enrollees due to a favorable federal match rate. In FY 2018, the state is responsible for only 5.5 percent of the costs of the expansion population, with the federal government picking up the remaining 94.5 percent. Additionally, the federal matching rate for the traditional Medicaid population (low-income children, seniors, and disabled adults) will increase from 62.3 percent in the current year to 63.7 percent next year, which saves the state $93 million.