Medicaid funding expected to come up short

The state health agency is forecasting a $155 million shortfall in the Medicaid health insurance program for the poor for the current budget year.

But legislators need not worry, says state Department of Health and Hospitals Undersecretary Jerry Phillips, because much of that deficit — about $100 million — can be covered by rebates from a pharmacy program that haven’t yet been plugged into the budget.

“We won’t be asking for additional money,” Phillips said.

DHH’s Medicaid program will require about $7.86 billion to cover spending for the fiscal year that ends June 30, according to the state forecast as of November. But the state budget law set aside only $7.7 billion for Medicaid, the state and federal program that provides health care services for low income residents. The Medicaid program represents nearly one-third of the state’s $25.4 billion annual spending plan.

Louisiana House Appropriations Committee Chairman Jim Fannin, R-Jonesboro, said projected shortfalls in Medicaid is nothing new.

“I’ve told them to absorb $100 million or more and they have found it,” Fannin said. He’ll continue to keep a close eye on the program’s fiscal status, he said.

DHH provided legislators and their budget staffers with reports this week that uses Medicaid program trends to project spending on such services as inpatient and outpatient hospital care, nursing homes, mental health and pharmacy.

The DHH report forecasts a higher level of spending than anticipated for hospital services, community homes for the developmentally disabled, physician services and some programs that provide community-based care for the developmentally disabled.

The report also projects that a program for autistic children and youth would require $30 million in the current fiscal year. However, Phillips said the program is just being implemented and funding requirements could be substantially less. The program — mandated by a federal court order — was not in the original Medicaid budget.

Phillips said the other unknown is whether Louisiana’s Medicaid budget would be impacted by the federal health care revamp’s excise tax on high value health care plans. Part of Louisiana’s Medicaid population is being served by private health insurance plans.

“It may not be that we have to deal with it this fiscal year,” Phillips said. There is a $20 million cost associated with the excise tax, he said.