Expanding Medicaid will benefit Louisiana’s economy, residents and hospitals

While the governor and our Legislature discuss more options to raise revenue and cut spending during this historic budget crisis, we are all looking for ways to help our state not just survive, but to ultimately flourish. With that goal in mind, there are real solutions even in the midst of a financial crisis.

During the past seven years, Louisiana hospitals have been cut by more than $1.4 billion, which is more than 26%. Now some data suggests as many as one in three Louisiana hospitals are operating in the red. Budget cuts are not an arbitrary number. For every $150 million in state budget cuts, $800 million in business transactions are eliminated, $245 million in federal matching dollars disappear and 8,000 jobs are lost.

When you consider that our hospitals are the state’s largest employer, directly employing nearly 100,000 people and indirectly employing almost 300,000 more, this kind of financial threat to our community hospitals becomes a threat to our economy.

It’s not all gloom and doom. There are still opportunities that can help bolster our economy, provide new money for our state general fund and improve access and quality of care for everyone.
The solution, we believe, is Medicaid coverage expansion.

Expansion achieves two main objectives. It expands coverage to those who are working but do not make enough money to afford private insurance. It also relieves Louisiana of a massive financial burden by moving the bulk of the obligation for paying for the uninsured to the federal government.

Louisiana hospitals are mandated to care for our poor, indigent and sick whether or not they have insurance. For hospitals to remain open and viable, someone has to help cover these costs. Right now, the federal government picks up 60% at most, and some hospitals do not receive any reimbursement. This leaves the state to pick up the remaining tab along with hospitals, and then businesses and the privately insured see higher premiums. Nobody wins in our current system.

Under expansion, the federal government will pay for 90% to 100% of these costs. It’s simple math. The truth is expansion means more federal matching dollars coming into Louisiana, relieving pressure on the state general fund by at least $300 million during the next five years.

The bottom line is Louisiana will see a $1.1 billion increase in its gross state product, 15,600 new jobs and $1.8 billion in economic activity. This is in addition to the benefit of thousands of low-wage income workers who will now have access to covered care. A healthier and happier workforce is good for everybody.

Expansion makes financial sense for Louisiana families. In reality, all Louisianans are being double taxed; we are paying federal taxes to help fund expansion in other states, and then we’re paying local and state taxes to cover the cost of under- and uninsured patients here at home. We pay twice, and we get less.

Some may suggest this is a problem only for low-income people and families. One look at our budget crisis today refutes that notion. We should not forget that when emergency rooms close, they close for everyone. When hospitals are forced to cut services and staffing, medical care for all of us suffers. When mental health treatment is eliminated, we all feel the consequences, and when graduate medical education is eliminated, our schools, our communities and our future are put at risk.

Importantly, Medicaid payments do not go to individual patients. Those funds go to your community hospital, your local doctors and the pharmacists at the corner drug store as reimbursement for professional services rendered—reimbursements they do not currently receive.

Historically, in the 35 years since Medicaid’s inception, the federal government has only altered its share of these reimbursements three times—once temporarily and twice to marginally increase reimbursement.

For Louisiana, for our people, it’s more vital today than ever that we put aside our philosophical and political differences. We must get beyond the rhetoric and look instead to the facts. Expansion will help address our budget shortfall while providing health care to those who need it the most. It will protect quality treatment and access for those who are already fully insured. Economically, expansion will eliminate the double tax on Louisiana taxpayers, introduce billions in economic activity and relieve millions of dollars of pressure on our state general fund.

To turn our backs on the hundreds of millions of dollars provided by the federal government under expansion, while Louisiana is facing an historic budget crisis, would be short-sighted and a missed opportunity.

source