Louisiana is the only state in the nation to see a drop in the percentage of residents without health coverage from 2016 to 2017 – a drop that’s almost entirely related to Gov. John Bel Edwards’ decision to extend Medicaid coverage to low-income adults. A new report from the Commonwealth Fund finds that Louisiana’s adult uninsured rate fell 3 percentage-points, from 15% at the end of 2016, to 12% at the end of 2017. The state also performed well in the number of uninsured children. But the Advocate’s Sam Karlin reports that glaring problems remain:
While the state posted gains in some areas tracked by Commonwealth, it ranked 45 out of 50 states and the District of Columbia in the scorecard, which evaluates states on 47 health indicators, like insurance rates, health spending and premature deaths. The data is for 2017. Workers in Louisiana paid more for employer-sponsored health insurance than any other state in the country, when compared to median income. Far more adults in Louisiana went without the appropriate flu and pneumonia vaccines than in other states. And Louisiana ranked last for the number of adults who went without an annual dental visit. … Among people who get their health insurance through an employer, Louisiana workers paid premiums that amounted to about 10% of median income, the highest rate of any state. Other southern states also performed poorly in that metric. Louisiana’s overall ranking of 45 is slightly better than the previous two years, when the state ranked 49 in the scorecard.
Republicans in the Legislature have criticized the decision to expand Medicaid, claiming that the state spends millions of dollars on people who are not eligible for the program. But the AP’s Melinda Deslatte reports that the state’s Medicaid program will spend $400 million less than expected, largely due to new computer upgrades that perform quarterly checks on the eligibility of recipients. Nearly all of the unspent money comes from federal funds that the state won’t draw down from Washington.
[Louisiana Department of Health’s chief financial officer Cindy] Rives said it’s unclear if the decline in enrollment — or the smaller-than-expected level of spending on health services — will continue or be a short-term anomaly. “To say that’s an ongoing trend, I don’t have the data to support that,” she said. Health department leaders say some people enrolled through Medicaid expansion likely have fluctuating or seasonal changes in employment that could keep them going in and out of the Medicaid program throughout the year, as their wages change. “We don’t know what the churn is going to be, which people are going to come back, and only time will tell,” Rives said. The budget for the financial year that begins July 1 includes expectations that spending on Medicaid services will grow to $12.6 billion. A final tally of this year’s spending won’t be complete until October.
Internet sales tax collection delayed
The 2018 U.S. Supreme Court Wayfair decision was supposed to open the door for Louisiana to collect sales taxes from out-of-state online vendors. But the state computer system that is supposed to handle that task is taking longer than expected to develop. So the Legislature passed a measure last month that will delay full implementation by a year, to July 1 2020. The Advocate’s Mark Ballard reports:
“Right now, we’re collecting 4 percent in Baton Rouge, but their tax is 5.5,” said Luke Morris, who as assistant secretary of legal affairs at Louisiana Department of Revenue also participated in the Commission meetings that have been setting up the processes for handling internet sales following last year’s U.S. Supreme Court decision allowing states to levy taxes on the sale of goods over the internet. House Bill 547 would, in part, require the state to begin by July 1, 2020, exactly a year’s grace from the original deadline. That date also will trigger when the state starts enforcing sales tax collections from out-of-state retailers.
Millennial way to buy a home
As the economy has improved and lending standards have eased following a recession-era tightening, the housing market has seen a boom thanks in part to the increase number of millennials who are become homeowners. But over recent years, as Paul Davidson of USA Today explains, higher prices for entry-level home have brought challenges for younger homeowners balancing student debt and other priorities against investment in homeownership.
Experts have long advised homebuyers not to spend more than 30% of monthly income on housing to avoid straining their wallets. Devoting too much income to housing costs also can make it difficult to continue making house payments in case of a job loss or unforeseen medical expenses. The share of frugal young homebuyers staying under the 30% income-to-housing costs threshold was just 54% during the tail end of the housing boom in 2006 and has climbed steadily since. It has been roughly flat at about 75% since 2013. … A closer look shows millennials are being particularly prudent. The median income-to-housing cost ratio for 23- to 37-year-old homeowners has dropped from 18% in 2002 to 15.8% in 2017, the largest decrease among age groups from 18 to 62, according to Trulia, a real estate research firm.
A lost decade for state budgets
It’s been almost a decade since America plunged into the Great Recession, yet many states are still feeling the economic effects of that economic downturn. While on average, states’ general fund spending is up 4.3% in real dollars from their pre-recession peaks, Louisiana’s state general fund is still 13.3% below its post-Katrina zenith. A new brief from the Pew Charitable Trusts breaks down the numbers:
Like a family that suffered a job loss or pay cut during the recession, states missed out on billions of dollars in tax revenue. Even if a family’s earnings are now back to par, the household faces consequences from those years when it was unable to save for college, add to retirement accounts, or fix the roof. Likewise, even though total state tax revenue recovered nearly six years ago from its losses in the downturn, many states are still dealing with fallout from the tough choices they had to make to fill budget holes during the recession, including recent strikes by teachers who went years without pay raises, higher tuition at public universities, complaints from local governments living with less state aid, mounting repair bills for public infrastructure, and smaller state workforces. State policymakers also feel pressure to replenish rainy day funds for the next inevitable downturn, even though their budgets are squeezed by higher health care costs and unfunded pension liabilities.
In Louisiana, drops in state general fund spending have hit higher education and aid to local governments particularly hard:
|Change since 2008
|2nd biggest decrease
|16th biggest decrease
|Aid to Local Governments
|12th biggest decrease
Source: Pew Charitable Trusts
Number of the Day
$147 million – Performance based incentive package signed by IBM in 2013, stipulating that the company hire 800 employees at a Baton Rouge Client Innovation Center by 2017. IBM renegotiated the deadline to June 30th of this year, and has hired apprentices rather than full-time employees, in order to meet the new target. (Source: The Advocate)