Medicaid budget problems get more severe
Louisiana’s ability to finance health care services for low-income residents suffered another potential setback late last week when the federal government raised alarms about a hospital financing scheme that state officials have employed for years to generate more federal dollars for the Medicaid program. The warning came in a letter to state Medicaid directors from the Centers for Medicare and Medicaid Services and marks the second time this month that the state’s unique approach to health care financing has been called into question. While the letter doesn’t mention Louisiana by name, the schemes it warns against are ones that Louisiana and other states have been using for years. As The Advocate’s Marsha Shuler reports, “The latest issue involves the care of low-income patients by private hospitals. The state made $458 million in payments last year under the premise that the hospitals should be eligible for added federal Medicaid dollars because they treat patients who otherwise would go to public hospitals. Now, the federal Centers for Medicare and Medicaid Services said such deals will be scrutinized to determine if they are improper and not donations by bona fide providers.”

Letter counters misinformation about health coverage
If the federal government rejects Louisiana’s Medicaid financing schemes, attention would likely turn back to the one sure-fire way the state could provide coverage to more low-income adults without running afoul of rules and regulations. Extending Medicaid coverage to adults below 138 percent of poverty would boost Louisiana’s economy, improve public health and give hospitals, doctors and other health care providers a steadier income source while also providing much-needed stability to the state budget. But some critics continue to spread misinformation about this coverage opportunity. LBP policy analyst Steve Spires tries to set the record straight with a letter in today’s Lafayette Advertiser that refutes some common misconceptions. The letter was in response to an earlier letter suggesting that Medicaid eligibility would be too generous under expansion:

“[The earlier letter] implies that everyone in a household with income below the poverty line — $23,850 for a family of four — is eligible for Medicaid today. Not so. While Louisiana does a great job making sure that children are covered, the limits for adults are very strict. Adults without children do not qualify at all for ongoing coverage under Medicaid, regardless of income. A parent in a family of four qualifies for Medicaid only if his or her annual income is 12 percent of the poverty level — that’s less than $3,600 a year. This is a major reason why one in four adults in Louisiana is uninsured, even though most are working. Lower-paid employees in industries like tourism, construction, retail and child care are usually not offered insurance at work and often don’t make enough to buy it on their own. It is this group of Louisianans that would gain better access to care if the state expanded Medicaid.”

Could tax hikes grow the economy?
A new study challenges the long-held assumption that higher taxes on the rich would hurt the economy by discouraging the most able and talented members of society from working hard and taking big risks. But a new paper by three economists challenges that assumption, and suggests that Thomas Piketty’s call for addressing income inequality through higher marginal tax rates might also be good for the overall economy. As Matthew Yglesias reports in Vox:

“Higher tax rates, they argue, could push talented individuals to eschew lucrative-but-socially-useless jobs in favor of more broadly beneficial careers in teaching and research.”

Consultants outline state budget savings
A team of consultants hired to find “efficiencies” in state government have identified $74 million in potential savings that were presented to legislators on Monday. The suggestions range from using thinner asphalt in some paving projects to allowing pregnant women on Medicaid to use midwives instead of hospitals to deliver their babies. As The Associated Press reports, the savings identified by the firm Alvarez & Marsal, at a cost of $5 million, mean that more budget cuts will still be required under the budget plan that was approved last week by the House of Representatives. “To address the other half of the reductions, House lawmakers proposed that the Jindal administration shrink state contracts by $25 million and cut $12 million across agencies to match the historical spending patterns of the departments. They recommended removing more than $17 million for vacant jobs so departments won’t be able to fill them and reducing overtime spending by $2 million. Another $7 million in savings would be expected from a planned computer consolidation across agencies.”