Medicaid Amendments Provide Needed Cash, but Would Compromise Future Budgets

Medicaid Amendments Provide Needed Cash, but Would Compromise Future Budgets

A new analysis from the Louisiana Budget Project shows that while House Bills 532 and 533 would bring new federal dollars in to the state’s healthcare budget, other provisions would ultimately bind lawmakers in a way that could compromise Louisiana’s ability to fund basic services in the future.

The bills create a mechanism for the state to draw down more federal Medicaid dollars by setting up a hospital provider fee. At the same time, they set a “rate floor” that protects certain providers from budget cuts in the future and mandate annual rate increases, reducing legislators’ discretion over the budget and leaving less state funding available for other priorities.

“Louisianans have no more appetite for spending cuts, and provider fees would provide a badly needed cash flow to the state budget,” LBP Director Jan Moller said. “But the Legislature is already severely constrained in how it can divide the limited funds the state receives. Tying up even more money to protect a limited number of providers puts higher education, transportation and other health-care providers at risk for even deeper cuts in the future.”

For more information, read LBP’s report “Medicaid Amendments Would Compromise Future Budgets.