Millions of Americans who face crushing medical debt could see those liabilities removed from their credit reports under an initiative announced this week by the Biden administration. The change would come from federal rules being developed by the Consumer Financial Protection Bureau, and could make it easier for people to buy cars, rent apartments and get jobs. Kaiser Health News’ Noam N. Levey reports:

New rules would also represent one of the most significant federal actions to tackle medical debt, a problem that burdens about 100 million people and forces legions to take on extra work, give up their homes, and ration food and other essentials, a KFF Health News-NPR investigation found. …Enacting new regulations can be a lengthy process. Administration officials said Thursday that the new rules would be developed next year. Such an aggressive step to restrict credit reporting and debt collection by hospitals and other medical providers will also almost certainly stir industry opposition.

Complicating matters further: The CFPB, which was established after the 2008 financial crisis, has been under fire from Republicans in Congress who accuse it of overreach. Its future is also threatened by a case before the U.S. Supreme Court that challenges its funding mechanism. 

Blue Cross sale under fire 
Attorney General Jeff Landry, the front-runner in Louisiana’s governor’s race, wants the proposed sale of Blue Cross Blue Shield of Louisiana to a private company to be mothballed until the next administration is sworn in. The sale of the nonprofit health insurer to Elevance Health had already been delayed until October after state lawmakers raised questions about the deal. But BCBS officials requested another delay, which will likely push the approval process to the next gubernatorial administration, after meeting with Landry this week. The Times-Picayune | Baton Rouge Advocate’s Stephanie Riegel reports

Landry said he met with Blue Cross in his capacity as the attorney general charged with regulating consumer protection in the state, not as the gubernatorial frontrunner. He said he is not necessarily opposed to the sale in theory but “as it currently stands, it’s a bad deal” because there are too many unanswered questions about how it will affect the 92,000 Blue Cross policyholders and 1.9 million people in Louisiana with some form of Blue Cross insurance. 

LBP’s concerns about the proposed sale are outlined here

Louisiana’s brain drain 
High rates of poverty, low levels of educational attainment and sluggish economy have long helped to drive away many of Louisiana’s best and brightest young people to other states. The state’s population has grown by about 10% since 1980, compared to 40% for the rest of the country. Since 2010, Louisiana’s population has climbed just 1.25% while other Southern states have seen double-digit growth. The Times-Picayune | Baton Rouge Advocate’s Faimon A. Roberts III explains how long-standing problems combined with the newly skyrocketing cost of living will continue to make residents look elsewhere. 

Many graduates face the same dilemma, said Gary Wagner, a professor of economics at University of Louisiana at Lafayette. It’s hard to keep native graduates, much less lure those from out of state.  “The state’s economy is not very dynamic,” he said. “The state is not highly innovative.” With costs of living rising steeply, Louisiana is losing on two fronts, he said. “If you compare average home prices to average income, Louisiana has gotten significantly more expensive compared to our neighbors in the last 20 years,” Wagner said. Factor in the skyrocketing cost of insurance and a complicated regulatory and tax climate, and the state becomes far less attractive, especially for college grads, Wagner said.

Nurse midwives in Louisiana
Nearly one-third of women in Louisiana live in a parish that lacks a single obstetrician. While nurse midwives could help fill this gap and alleviate the state’s infant mortality crisis, hospitals have yet to embrace this group of health care professionals.  The Times-Picayune | Baton Rouge Advocate’s Andrea Gallo reports

Across the state, Louisiana hospitals are refusing to hire them, despite their extensive credentials. Others will not give them admitting privileges. Louisiana also pays nurse midwives less through Medicaid than many other states. … And when nurse midwives treat Medicaid patients in Louisiana, they receive especially low payments. While all providers earn less from Medicaid than they would from Medicare and commercial insurance, the problem is acute for nurse midwives. For every dollar obstetricians in Louisiana make when they treat Medicare patients, they earn just 66 cents for patients on Medicaid. Nurse midwives in Louisiana have historically received even less than that — 80% of the physician rate.

A new state law requires the Louisiana Department of Health to implement a Medicaid reimbursement rate for licensed and certified nurse midwives at a minimum of 95% of the amount reimbursed to physicians for the same pregnancy and childbirth services. 

Number of the Day
3.3% – Louisiana’s August unemployment rate, which was the lowest on record. (Source: Bureau of Labor Statistics via the Baton Rouge Business Report)