As many as 500,000 Louisiana residents — mainly working adults — won’t get government health insurance as a result of Gov. Bobby Jindal’s decision to reject a Medicaid expansion in the law overhauling the federal health care system.
Jindal has said on national television that the new health care law recently found constitutional by the U.S. Supreme Court is too costly and allows government to intrude too much into private lives.
Executives of the LSU-run and community hospitals voiced concern that Louisiana could suffer a “double whammy” because the new law decreases money to pay for the care of the uninsured, while increasing funding for Medicaid coverage for many of those same people. Jindal opposes state expansion of Medicaid.
Insurance executives also say they’re worried about Jindal’s opposition to setting up a state-run clearinghouse that allows consumers to shop and compare policies, according to Insurance Commissioner Jim Donelon.
Medicaid is the program individual states operate to provide health care for low income residents. Medicaid is funded jointly by state and federal governments.
Under the new Affordable Care Act, uninsured care dollars decline starting in 2014 as the Medicaid program is expanded to cover people with income of up to 133 percent of the federal poverty level. The federal poverty level is $11,170 for a single individual and $23,050 for a family of four.
The Kaiser Commission on Medicaid and the Uninsured’s state-by-state analysis concludes that there would be up to 508,000 new Medicaid enrollees in Louisiana with the expansion.
The state Department of Health and Hospitals has not yet come up with a similar estimate. “That’s going to take more time to determine,” DHH spokesman Tom Gasparoli said.
DHH Secretary Bruce Greenstein, who is Jindal’s chief public health lieutenant, declined comment again Monday.
He has refused a dozen requests for an interview about the Affordable Care Act, or ACA, since June 28.
If Louisiana expanded Medicaid, the federal government would pay 100 percent of costs for the first three years, then 95 percent for the following three years and 90 percent after that, under the provisions of the ACA.
The uninsured care dollars are called “disproportionate share,” or more commonly by its acronym “DSH” and pronounced “dish.” The state pays about one-third share of the DSH costs.
With more people covered by Medicaid, the state would be paying less for uninsured care through DSH. Louisiana relies heavily on the DSH funding to run its LSU public hospitals and support rural and community hospitals.
Last fiscal year, Louisiana used $725 million in uninsured care dollars. The LSU hospital system used $477 million and $161 million to other hospitals around the state.
“The DSH dollars go down in 2014. Suddenly, if you don’t have more covered (through Medicaid) and you scale back, it’s a double whammy to the providers and the state,” Louisiana Hospital Association President John Matessino said.
By 2018, some $5 billion of the $11.3 billion pot of federal disproportionate care dollars will go away under the ACA. Meanwhile, the ACA wants the uninsured covered under Medicaid.
“It’s a real concern,” said LSU System Vice President Fred Cerise, a former DHH secretary who oversees LSU medical education and hospital division.
Cerise and Matessino said much will depend on decisions made by the Centers for Medicare and Medicaid Services, the federal agency that oversees Medicaid.
The U.S. Supreme Court decision allows states to opt out of the Medicaid expansion without being penalized for its decision to do so, Matessino said.
“The big question for us is how will DSH be dealt with? If we don’t expand, will we continue to get DSH?” he asked.
“There’s nothing in that ruling that says leave DSH alone,” Cerise said.
Does the federal Centers for Medicare and Medicaid Services look at the sizeable number of uninsured in a state or “have a little punitive approach” because the states could have reduced the uninsured with a Medicaid expansion? Cerise said.
Dr. Ron Ritchey, chief medical officer of eQHealth Solutions, said Louisiana will continue to have a lot of poor people.
Ritchey said the charity hospital system has cared for the poor through the decades.
Now it is threatened as state health officials decide where to make a nearly $860 million cut in the state’s $7.7 billion Medicaid health insurance program for the poor and fallout from the reduction in DSH dollars, Ritchie told the Press Club of Baton Rouge on Monday.
“If he’s choosing not to expand Medicaid and implement the insurance exchange, we need to find out what is his (Jindal’s) Plan B other than shift costs to providers, hospitals or the taxpayers of Louisiana,” Ritchey said.
Louisiana taxpayers will either have to put more money into the LSU hospital system to cover care for the poor or pay higher medical costs themselves as cost-shifting goes on when the uninsured show up in private hospital emergency rooms, Ritchey said.
Jindal has also refused federal grants funds to begin development of a state health insurance exchange to help people find the most affordable coverage through pooling and other mechanisms.
“It is a difficult situation,” Insurance Commissioner Donelon said. “It’s almost a lose-lose situation for us.”
“If we don’t do anything and the (presidential) election doesn’t come out such that the law can be changed, then the federal government will do it and we will be at their mercy under the federal law to comply with whatever they require,” he said.
Donelon said there are many who have qualms about that situation, most notably the insurance agents of the state. “I’ve been approached by all the agent associations expressing that concern,” he said.
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