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Medicaid Costs Less than Private Insurance

Friday, January 21st, 2011

Posted by: Teaway Zehyoue Collins

According to a recent report from the Center on Budget and Policy Priorities, Medicaid costs less and offers more benefits than private insurance companies. For example, Medicaid costs 27 percent less for children and 20 percent less for adults than the same benefits provided by private insurance. In addition, Medicaid offers Early Periodic Screening, Diagnostic, and Treatment (EPSDT), a comprehensive pediatric benefit that ensures low-income children receive preventive medical screening and treatment for health problems they are found to have. This comprehensive pediatric coverage EPSDT is not provided by private insurance.

The Louisiana’s Medicaid program is one of the most efficiently run programs in the United States with administrative costs under the current fee-for-service system totaling 3 percent, which is the fourth lowest in the country. The Jindal administration is proposing changing the Louisiana’s Medicaid program from the current fee-for-service to Coordinated Care Networks (CCN), which would allow private insurance companies to manage the preventive and primary-care of Louisiana’s 1.2 million Medicaid recipients. The CCN plan would allow private insurers to charge up to 15 percent for administrative services and profit, private insurance companies would receive up $330 million to run Louisiana’s Medicaid program that otherwise would have gone into providing services to Medicaid recipients. Because, Louisiana’s Medicaid is a complex system, changes to the system must be done carefully and transparently in order to ensure that low-income people receive adequate care like other residents of Louisiana.

Posted in Budget, Health Care, News/Updates | No Responses »
Tags: Medicaid

Medicaid: Doing Less with Less

Friday, October 29th, 2010

Posted by: Teaway Zehyoue Collins

In response to Louisiana’s current fiscal crisis, Governor Jindal has admonished his executive branch leaders to “do more with less.” The Louisiana Department of Health and Hospitals recently proposed $20.8 million in cuts to the current year budget to make up for DHH’s share of the state’s FY2010 budget deficit of $107 million. DHH also announced a $50 million projected shortfall in its FY2011 Medicaid budget due to a 4.4% increase in Medicaid enrollments. To cover these shortfalls, DHH plans to close eight parish Medicaid offices and reduce the number of people serving Medicaid clients by 61 people. As a result, Louisianans seeking Medicaid services will have to drive further and wait longer. This sounds to us at the Louisiana Budget Project as doing less with less.

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Tags: Medicaid

Levine estimates miss the mark

Wednesday, June 30th, 2010

In his Letter to the Editor “Levine estimates miss the mark,” published in the June 30, 2010, edition of the Baton Rouge Advocate, LBP Director Edward Ashworth corrects Louisiana’s Secretary of Health and Hospitals’ inflated estimate of the state’s cost of federal healthcare reform. Here’s an excerpt:

The Jindal administration’s fight against federal health-care reform has ranged from the unfounded to the unseemly.

In the unfounded department, as noted in the Advocate’s June 22 editorial, “A GOP take on new costs,” Department of Health and Hospitals Secretary Alan Levine predicts health-care reform will cost the state $7.1 billion over a decade.

But that number is based largely on Medicaid participation rates assumptions that are way too high.

Posted in Health Care, Letter to Editor | No Responses »
Tags: federal healthcare reform, Health Care, Medicaid

Perfect Storm Awaits Louisiana Medicaid Funding

Thursday, November 12th, 2009

State Nonprofit Association and Budget Watchdog Warn Congress of Pending Healthcare Crisis

BATON ROUGE—In a letter to Louisiana’s nine-member Congressional delegation, the Louisiana Budget Project (LBP) and its parent organization, the Louisiana Association of Nonprofit Organizations (LANO), warn a combination of economic and legislative conditions is set to decimate the safety net for Louisiana’s most vulnerable populations.

The state’s Medicaid program, a key provider of healthcare to Louisiana’s poor, elderly and other disadvantaged citizens, is supported by federal funding at a rate pegged to per capita income. Louisiana’s current match rate is 80%, meaning the federal government pays 80% of the cost for services provided under Medicaid. Unless changes are made, this support will soon be drastically reduced.

Due to an influx of billions of dollars in one-time federal hurricane relief, Louisianan’s average income increased 17% between 2005 and 2007. This would have decreased significantly the federal share of Louisiana’s Medicaid program, except that provisions in the American Recovery and Reinvestment Act of 2009 (ARRA) suspended any decrease and provided additional funds to the state’s program.

When ARRA stimulus funding expires at the end of 2010, the federal match rate for Medicaid support in Louisiana will drop from 80% to approximately 63%, crippling the state’s ability to provide vital human services.

“Louisiana is facing the largest decrease in federal Medicaid matching in the nation’s history,” wrote Edward Ashworth, LBP Director and co-author of Monday’s congressional letter.

According to the LBP and LANO, Louisiana will lose an estimated $1.3 billion in federal Medicaid funding in state fiscal years 2011 and 2012, with an on-going, annualized reduction of $900 million. This comes at a time when the state projects severe shortfalls in state general fund revenues due to the effects of the recession and the decline in the price of oil and natural gas.

If forced to absorb this reduction in funding, the Louisiana Department of Health and Hospitals (DHH) has announced it may reduce or eliminate such programs as Pharmacy Services, Intermediate Care Facilities for Persons with Developmental Disabilities (ICF-DD), Personal Care Services, Program for All Inclusive Care for the Elderly (PACE), and various waivers that expand services or reduce costs for needy recipients. Additionally, up to 125,000 children from low and moderate-income families could lose health insurance currently provided under Louisiana’s LaCHIP program.

“Thousands of Louisianans will continue to need vital assistance” provided through Medicaid funding, said Ann S. Williamson, LANO President and CEO. “The nonprofit sector can ease the burden, but no single sector can meet this need alone.”

Williamson stated that a steep decline in federal support would impact the nonprofit sector by raising demand for its services without increasing resources. Louisiana nonprofits, many of them small and locally focused, are already stretched thin by current economic conditions.

According to LANO and LBP, three Congressional remedies are needed to prevent widespread loss of healthcare coverage in Louisiana:

1. Have the federal government spread out the lowering of the match rates (that were increased under ARRA) over a two-year period, beginning January 1, 2011.

2. Discount the effects of one-time federal hurricane relief funds in the calculation of Louisiana’s average income.

3. Change the method of calculating the average income for states by using median income rather than the mean income.

If effected soon, these changes will give the state breathing room to secure new sources of revenue for Medicaid (e.g., by removing antiquated exemptions to the severance tax and realized savings from streamlining efforts) without leaving thousands of Louisianans unprotected in the interim. Furthermore, these federal changes will provide relief to neighboring Gulf Coast states facing similar consequences from 2005 and subsequent disaster relief scenarios.

But time is critical. Louisiana’s budget for fiscal year 2011 is being drafted now and will be finalized in February 2010 for presenting to the Legislature in March.

For more information on this and other issues facing Louisiana’s nonprofit sector and the citizens it serves, contact the Louisiana Association of Nonprofit Organizations at 225.929.5266 or visit http://www.lano.org/.

Budget Cuts In Health Care

Tuesday, January 27th, 2009

Governor Jindal intends to cut the budget to try and prepare for the projected budget shortfall. In Jindal’s budget cut breakdown the Department of Health and Hospitals will have the largest cuts, totaling a $118,070,508 decrease. The largest cut within the department is referred to as means of financing, which is estimated to be cut by $17,544,028. Other means that have been proposed to help cut the DHH budget are delaying new programs, shifting work to other entities, and reducing utilization.

A specific impact that DHH budget cuts will have are limited prescriptions for Medicaid participants. As stated by Secretary Levine, Medicaid participants will be covered for five prescriptions per month, as compared to the eight they were allowed previous to the cuts. For more information on the Louisiana budget cuts go to: http://www.gov.state.la.us/assets/12-30-08-CUTS_2009_-_FINAL_-_SEND_OUT.pdf.

Posted in Health Care, News/Updates | No Responses »
Tags: Cut, Medicaid

Louisiana Medicaid Reform Heads to Washington D.C.

Tuesday, January 6th, 2009

The Jindal administration has gotten approval from both the Joint Legislative Committee on the Budget and the Health and Welfare Committee to seek approval from the federal government, concerning Medicaid reform. These committee hearings followed in-depth briefings on the health care reform made to both the Louisiana House and the Senate. Assuming the administration is successful in receiving the required Medicaid waiver from the federal government, the administration will then need to return to our state legislature to seek approval regarding the specifics of the Medicaid reform.

For more information on the Medicaid reform and upcoming events pertaining to the reform, visit Louisiana Health First.

Posted in Health Care, News/Updates | No Responses »
Tags: health care, Medicaid