Louisiana’s only Democrat officeholder elected statewide accused
Republican Gov. Bobby
Jindal of deciding not to commit the state to expansion of Medicaid, the
cornerstone of the Patient Protection and Critical Care Act (“Obamacare”) for which
Landrieu cast the decisive vote, because it would detract from his credentials
to win a putative GOP nomination for president in 2016. A majority of
Republican governors have like Jindal refused to go along with this or have
remained noncommittal.
And for good reason, for the medical economics of the situation
continue to demonstrate in general this was a lose-lose
proposition for the state – it would result in poorer outcomes
with the state picking up proportionately more of the tab. This is because those
who would qualify already with private insurance would bail out of that for
cheaper Medicaid, Louisiana would have to pay for administrative expenses to
increase program capacity, and in a few years will have to pick up 10 percent
of the tab with the possibility that proportion will increase over time.
But Landrieu either is ignorant of reality or disingenuous on this
issue, trying to make her argument that the state ought to accept expansion on
the basis of a report
by the liberal advocacy group Families USA that as many as 422,000 recipients could
be added to the rolls, which would have the impact of adding 15,600 jobs with a
claimed economic impact of $1.8 billion annually by the time it was rolled out completely.
Although she didn’t mention it, she probably also based her argument on information
asserted by a related leftist group closer to home that is her close ally, the
Louisiana Budget Project, that claimed the state really wouldn’t lose any money
on the expansion.
But when investigating the assumptions and methodologies of these
efforts, it turns out they aren’t worth the electrons on which they were distributed. The
Families USA report ignores completely the displacement effect that sucking so much
money out of the economy would have on job creation. In national terms – not limited
to one state or to the health care industry – the impact is unambiguous: it ends
up as a net
job loser. This is because additional spending to cover its expenses (which
seemingly every day goes
up for Obamacare compared to not having enacted it) will sap jobs and for the
concomitant rise in private market premiums, because of cost-shifting by
providers to these policy-holders.
This reveals the dirty secret about Medicaid – because it pays a lower
reimbursement rate, not often do providers make enough to pay for costs. Thus,
they shift them to the private market, where it’s estimated
that already the typical family pays an extra $1,800 in health insurance costs to
offset – set to go from 55 to 85 percent higher with the implementation of Obamacare.
This is a job killer unaccounted for in the study.
Which may be exacerbated in Louisiana, because the
state utilizes Medicaid dollars more efficiently than most at present. But
that’s because of the nature of its enrolled population – mostly children and the
healthier. So, adding to that population would enroll more higher-cost clients,
meaning the state disproportionately pays more as the majority of enrollees
will be using the fee-for-service model, and even those in the managed capitation
plan will force the state to pay higher rates to the managed care companies overseeing
them. Again, by sucking these dollars out of taxpayers’ pockets, this costs
jobs. And, of course, the report gives no consideration to the damper on the
economy caused by transferring all of that wealth into providing
health care for many who can pay for it, higher rates for those who cannot
get into the program, greater expenditures due to the poorer health outcomes of
those who shift to Medicaid provision as a result of the expansion, and the
higher average cost of the new entrants.
In Louisiana’s case specifically, it’s hard to determine whether all
alleged 15,600 jobs and economic boost would be compensated negatively and then
some by the extraction of resources from the private sector to the public
sector expansion would foist and its spillover effects. But one thing is
certain – taxpayers will see a higher bill, despite the efforts of the LBP report
to persuade otherwise.
It tries to argue any additional costs to the state will about be
offset by savings from a reduction in uncompensated care paid out of
Disproportionate Share Hospital funds. Off the bat, it underestimates average costs
in years more than a decade out, because it factors in the first three years of
100 percent federal payment than then drops to 90 percent (and with no
guarantee it won’t go lower). Its simplistic analysis also ignores the higher
relative cost per enrollee noted above, and that the low-balling of provider
reimbursement rates necessary to pretend the program will cost less than it
does will trigger supply reductions in providers that will send many flooding back
into uncompensated care situations – meaning DSH
payments are unlikely to be cut back as much as intended.
But it’s on the alleged savings on uncompensated care where the report
takes the greatest flight of fantasy. It bases what came be saved on the old
FFS model from which the state rapidly is transitioning out, performed to a
large degree by an inefficient charity hospital system that mostly will be
managed by the private sector in the future. Because this new system will be
run more efficiently, less savings can be realized by a reduction in utilization
(which, again, will be not be as much as the report assumes because of the
supply squeeze). So rather than a gap of perhaps between $100 million and $200
million annually the state would have to pay with expansion (which the report
argues can be wiped away by other assumed but unquantified savings), it will be
significantly larger.
It’s the flawed conceptualizations of these half-baked efforts on which
Landrieu anchors her baseless critique of Jindal, but of greater interest is
why and why now. It’s a bit of payback for Jindal’s telling Landrieu’s master Pres.
Barack Obama
that slowing down Obamacare implementation could save the federal government
money and avoid automatic spending cuts cues up in the next couple of days, but
it’s about much more than that, concerning both Jindal’s and Landrieu’s future.
Jindal’s presumed pursuit of the presidency, as it is for any quality Republican
candidate, is something Democrats wish to obstruct, and it’s never too early to
start on that for the party of no compromise, no negotiation. But Landrieu isn’t
out there just to play the faithful party hack role. The issue itself,
implementation of Obamacare, in Louisiana has become closely associated with
her because of that crucial vote she cast. It is the albatross around her neck situated
with a constituency
that regards the entire package as deeply unloved that makes the most
optimistic judgment of her reelection chances as a toss-up.
So by trying to distort and obfuscate the deleterious facts about this
part of Obamacare in her setting up Jindal as a foil, she attempts to provide a
defense for her vote and play to lesser disapproval among the public about
getting for three years a lot of “free” money (state cost-sharing begins after
that, while paying for additional administration starts immediately, facts
almost entirely unknown in the public). This is why she scrambles to find any
scrap to justify her position, and acts like a bully against the nerdy kid with
personal attacks: because she’s fighting for her political life.
3 comments:
Let's see, Mary cast the deciding vote to give social security to illegals, cast the deciding vote on health care, said there is no spending problem, votes for whatever Obama proposes and since being elected has voted the democrat party line ever time even if it hurt LA. Time we get rid of her.
Time to put Mary Landrieu out to pasture.She is a menace to America and an embarrassment to Louisiana. And she can take her phone system with her.
Yeah, but more importantly than whether or not you like Mary, or whether or not the information cited is reliable, and despite your failure to advise your readers of multiple Republican governors who have changed their positions on this issue in the last few weeks, please tell us what then is our Governor going to do in lieu of federal program for this huge group of people?????
Is it easy to by a naysayer - it is difficult to be a leader.
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