Letter to the editor: State budget crisis – Medicaid in 2020
Gov. John Bel Edwards said that “Louisiana citizens who care about the future of our state should come up with practical solutions and work with him to stabilize our budget structurally for the long term.” I would like to answer that call. Since Louisiana has a projected $1.9 billion deficit for 2017, and Medicaid costs has increased 51 percent in the last eight years and the $8.4 billion cost now represents 33 percent of the state budget, Medicaid seemed like the logical place to start first.
State Treasurer John Kennedy has warned us that a recent study by the Congressional Budget Office projects that Louisiana’s Medicaid Program will increase to $13 billion by 2020. The CBO projections appear very reasonable based on the fact that 1) the number of Medicaid recipients has increased from 1 million in 2007 to 1.4 million as The Affordable Care Act of 2010 has made it easier to sign up everywhere, 2) the State Match Rate has increased from 28 percent to 38 percent, and 3) Health Care Prices are projected to grow 5.8 percent per year for the next decade.
All of the above findings point to a substantial $1.7 billion per year increase in the state’s share of Medicaid as follows;
— $13 billion x 38 percent state match rate = $4.9 billion state Medicaid cost in 2020
— $ 8.4 billion x 38 percent state match rate = $3.2 billion state Medicaid cost in 2016
— Annual Increase in Medicaid costs = $1.7 billion
If my calculations are even close — and in four years we need to add an extra $1.7 billion to our existing $1.9 billion deficit, where are we going to find $3.6 billion per year? Medicaid should be at the top of the agenda for the upcoming Special Session, as both Democrats and Republicans admit Medicaid is a broken system. More and more doctors are refusing to see Medicaid patients, and they are now flooding hospital emergency rooms— the most expensive provider in the entire health care system.
How do we will fix the Medicaid problem since it is a federal program? Don’t we need Washington to fix it ? That could be a real problem as Washington has shown it has no political will to fix Medicaid.
Perhaps the only “practical solution” is to amend the U.S. Constitution to force Washington to fix Medicaid — and Article V of the Constitution gives our state legislators the power to do just that.
Steve Gardes, CPA