Thursday, January 14, 2016

Thursday, January 14, 2016

Medicaid expansion proposal could sweeten the deal; Food assistance to continue; Financial security a top priority and Big oil in big trouble

Medicaid expansion proposal could sweeten the deal
Gov. John Bel Edwards’ decision to expand Medicaid was great news for 300,000 working Louisianans, and now the rest of the state could have something to look forward to as well. The president is proposing to give a second chance to states like Louisiana that waited too long to expand and missed out on three full years of 100 percent federal funding. If Congress approves the proposal, the federal government would cover 100 percent of expansion costs for three years for all states, regardless of when expansion occurred. Under current law, opportunity for 100 percent funding is scheduled to end in 2017. The Advocate’s Elizabeth Crisp has more:

 

It’s unclear how receptive Congress would be to such a proposal. Obamacare remains unpopular among many Republicans, who have continued efforts to repeal the health care law. But it’s pretty clear from a blog post that will be going up on the White House website Thursday morning that Obama sees Louisiana’s recent move to expand Medicaid as a potential boost to the ACA. “With Louisiana becoming the 31st state, plus the District of Columbia, to expand Medicaid, more than 50 percent of those estimated to gain coverage from Medicaid expansion live in states that have done so – 4.4 million people,” the White House notes. “As this progress shows, state officials across the nation know that Medicaid expansion is a great deal for their states – a win for both the health of their residents and the vibrancy of their economies.”

 

Food assistance to continue

Thanks to the Edwards administration and a waiver from the federal government, 31,000 Louisianans who can’t find work won’t go hungry. Louisiana had been operating under a federal waiver that allows single adults who can’t find work to receive modest SNAP (formerly known as food stamps) benefits. Former Gov. Bobby Jindal allowed that waiver to expire even though the state’s high unemployment rate meant we were still eligible for the federal funding. Gov. John Bel Edwards’ new waiver request has been approved, Melinda Deslatte of the Associated Press reports:

 

Without intervention from the USDA, 31,000 people could have lost their food stamps with the start of the new year, according to the Edwards’ administration. The food assistance – estimated to cost $72 million for the 31,000 people over the next year – is paid for by the federal government, not the state…Edwards sought a one-year extension of the waiver. The USDA letter, provided to The Associated Press by the Edwards administration, grants the work requirement waiver from Dec. 1, 2015, through Nov. 30 of this year. Louisiana’s Department of Children and Family Services received the waiver on the same day it sent the request to the USDA, said Julie Baxter Payer, deputy chief of staff to Edwards. “No one was cut off of benefits,” Payer said. Some food stamp recipients, however, might see a short delay in getting their monthly assistance. Payer said the latest people will get their regular benefits is Jan. 20. The dollar amounts, if they were delayed, won’t change, she said. Louisiana had similar waivers for the past 19 years.

 

Financial security a top priority
A Pew Charitable Trusts survey reveals that 92 percent of Americans would prefer to be financially stable over moving up the income ladder. Pew says 8 in 10 are concerned about a lack of savings, 71 percent fear they don’t have enough money to cover their expenses, and 7 in 10 think they won’t have enough money for retirement. Given the size of the problem, Pew has some recommendations for policymakers:

 

Institute automatic savings, which can significantly increase emergency savings rates and levels; Support creation of short-term savings products that provide flexibility rather than establishing restrictions and penalties for withdrawals; Help ensure that programs promote growth in overall household savings, rather than in specific account types; Give consumers better tools to recognize the ebbs and flows of their finances and encourage them to build savings in times of surplus, providing a pool to draw on when money is tight.

 

Big oil in big trouble
A study by AlixPartners predicts that North American oil drillers will be $102 billion short on cash needed to operate this year with oil prices plummeting to $30 a barrel. Fuelfix.com predicts widespread pay cuts or wage freezes, cutting employees’ hours and pressuring suppliers for another 15 to 20 percent reduction in service and equipment prices. The Baton Rouge Business Report has more:

 

Many drillers will have to shed the traditional model of cutting items from an existing budget and adopt a so-called “lights on” approach: starting with a budget of $0 and spending only on essentials. “They’re quickly beginning to exhaust their options, and that’s why you’re seeing more bankruptcies,” says Dennis Cassidy, managing partner at AlixPartners, which specializes in restructuring. “There isn’t an easy solution.”…Worse than missing profits, though, is the cash shortfall. Last year, capital-market investors poured billions in debt and equity into oil producers, believing crude prices might recover quickly. But equity and debt markets are largely closed to all but the best operators, and that will likely force drillers to divest more assets, cancel projects or cut back on production volumes, Cassidy says. “People are recognizing they’re going to have to throw in the towel at some point,” he says. “This is not a drill. This is the real thing.”

 

Number of the Day

31,000 – Number of adults who won’t be losing basic food assistance this year because of a federal waiver granted at the request of Gov. Edwards. (Source: Associated Press)