Our Views: Formula flaw hits Louisiana

Almost out of the blue, a decision by Congress to cut Louisiana’s federal subsidy for health care for the poor has prompted — as it should — outcries about the potential cuts that will be required for hospitals and other health care providers.

But the cut, $859 million or about 11 percent of the Medicaid budget for the fiscal year that began Sunday, is also notable for how terribly unfair it is to the people of Louisiana.

The original problem with Louisiana’s Medicaid subsidy was not overspending by the state, but acts of God — hurricanes Katrina and Rita in 2005, and Gustav and Ike in 2008.

The percentage by which states get reimbursed for Medicaid costs depends on the state’s level of personal income. Rich states such as Connecticut get 50 percent, the floor for reimbursement. Poorer states, such as Louisiana, get a larger percentage reimbursement.

But the influx of insurance payments and rebuilding assistance since the catastrophic hurricanes has artificially inflated Louisiana’s income statistics.

Louisiana officials of all parties said — and federal officials did not disagree — that the formula needed to be adjusted because of the distortions caused by hurricane money. Officials said action by Congress, though, was required to deal with this formula glitch.

U.S. Sen. Mary Landrieu, D-La., added to the federal health care law provisions to buffer Louisiana from a Medicaid rate drop because of the influx of rebuilding dollars. Those dollars went up because of a math issue from the inclusion of the 2008 Hurricane Gustav disaster impact.

To take back the difference, House Republicans — in the fine print of the new highway bill — dropped the Medicaid match difference. The problem is that this exercise in after-the-fact economy came after the state had passed its fiscal 2013 budget based on the earlier number.

Cuts will ensue, and with precious little in the way of warning or any orderly process — even if congressional critics had a point about the impact of Gustav aid on the formula.

Louisiana by its natural position on the coast occasionally is going to be prey to hurricanes, although God forbid never again to the dimensions of 2005. But the state’s people are not richer after receiving insurance payments and Katrina aid. To reduce Medicaid payments to one of the poorer states, on the basis of flaws in the federal disbursement formula, is not fair or humane to those whose medical care might be interrupted.

Comments

1) Comment by phil - 09/07/2012

I imagine some politicians cannot wait until the next disaster to happen in LA so all of that federal government money and other funds can be used for more parks and concerts and greenways, redevelopment etc - especially in Baton Rouge where all of the real damage was done (NOT). Who needs Medicaid (or bridges repaired) when they have all of those parks, paths, greenways, and subsidized concerts to go to? Besides when 40 percent of the population in LA is on Medicaid, where will all of that money come from anyway? Where is that money tree that is growing in someone's back yard? We need to find it fast!

2) Comment by [e-mail] - 08/07/2012

Wake uuuuuuup, Loki! You're still dreaming! The Democrats did this, remember?

3) Comment by 8point6 - 08/07/2012

"our views" had better watch its language! The word "God" was used twice in this article! Most of these comments are right on the mark.

4) Comment by phil - 07/07/2012

I know everyone has their opinions but I think this is an overall indication of how irresponsible our federal government really is. The government wants to cut out this $859 million in Medicaid now, but later it thinks it can just increase the number of people in LA on Medicaid from about 25 percent to about 40 percent when the Obamacare bill kicks in completely. I guess the Medicaid money will then all of a sudden magically appear from somewhere. It's a darn miracle! By the way, how many local politicians are wishing for the next disaster in LA so more of that federal money will start flowing in? Its beginning to appear like a big joke, and the joke is on us taxpayers!

5) Comment by [e-mail] - 07/07/2012

The comments on this are interesting, but we're glossing over the main issue, i.e., we are reduced to begging the federal government for our own money! The Feds give away money that they take from us with all of these so called benign programs that although they benefit some they punish more. There's no way to say it except that giving away other people's money is always easy for politicians except that they have to take more and more from us to sustain their largesse.

6) Comment by Loki - 07/07/2012

This is what you get when Republicans are in charge. Savage cuts to the poor and helpless in a time where many more are becoming poor and helpless. All you Republicans with friends and family who benefit from Medicaid in their most troubled times should reflect on what your people in Congress are doing. The pathways of greed and selfishness come into high relief.

7) Comment by InPVille - 07/07/2012

@Whatnow: As they say "Many a truth is said in jest".

8) Comment by Whatnow - 07/07/2012

@InPVille, I agree, and I haven't met an honest politician yet, but my comment was tongue in cheek. Pelosi made it all too clear how it's done and what we are learning about the cost of Obamacare now proves it.

9) Comment by InPVille - 07/07/2012

@Whatnow: "Those Dems in Congress may want to start reading bills before they pass them." - - - That is good advice to all parties. If you enter something like "Legislation Read Before Voting into your browser search engine and check the subject out, you will find legislators not reading legislation before it is voted on isn't that uncommon.

10) Comment by tradewinns - 07/07/2012

if the fed cuts money, the state cuts it's budget also. the fed would love for the states to pick up the difference so no one would be mad at them. when it comes to cuts, it shouldn't be the middle class who gets it every time.

11) Comment by ScotB - 07/07/2012

Medicaid has been unfair all along. With health care providers underpaid for their services. Now they are talking about cutting payments to providers another 10+%. Providers still have to pay rent, insurance, doctors, nurses, aides, equipment leases, utilities, etc. So, they will raise prices on the people who do pay. This cost shifting of the non-productive people to the productive people is unfair. The insured people pay higher premiums, higher co-pays, higher deductibles, and higher taxes so the people who don't contribute can continue their non-productive lives in good health. Ultimately, many providers are going to choose not to accept Medicaid patients if this continues. Unfair, indeed.

12) Comment by Whatnow - 06/07/2012

Those Dems in Congress may want to start reading bills before they pass them.