Despite window dressing, expansion bill merits rejection

While the latest attempt to expand Medicaid coverage in Louisiana has been greeted with some success politically and in public relations terms, it’s merely a matter of old sour wine in new bottles that compels its rejection.

Last week, SB 125 by Sen. Karen Peterson passed a Senate committee. Heavily amended from its original form, the bill seeks to emulate a similar measure passed in Arkansas concerning the controversial expansion of Medicaid built upon implementation of the Patient Protection and Affordable Care Act (“Obamacare”). Heretofore state lawmakers as well as Gov. Bobby Jindal have balked at the extra costs this move would impose on the state, which have been estimated to be $93 million by 2023 and by then growing at a rate of 15 percent per year, and with no guarantee that cost burdens will not rise further by changes in federal policy. The law and regulations also prevent the state from opting in during the initial period, purposely created to entice states into it with the lowest costs (although still increasing the overall burden onto taxpayers nationwide), and then withdrawing.

Last month, Arkansas worked out a deal with the federal government to allow the state to pursue expansion by tapping into Medicaid money to purchase private insurance to give to the population targeted for addition onto roles by Obamacare. In essence, it would route these clients through the new mandated exchanges. However, while Senate committee members, the crucial vote provided by Republican state Sen. Fred Mills whose pharmacy business no doubt would benefit from the extra anticipated business brought by expansion, were willing to push the similar measure forward, Jindal has continued to express skepticism.

As well he should. The problem comes, as the federal government quickly reiterated through a memo released shortly after holding discussions with Arkansas, from its insistence that the rigid Medicaid program specifications remain in place that make it so inefficient and less effective in the first place. Thus, low co-pays that do not discourage inefficient usages, there’s no guarantee that the state could offer higher reimbursement rates than legacy Medicaid (which would alleviate the supply shortage already affecting it and that would be exacerbated far worse with expansion, mooting any benefits), and the authority for this ends in 2016 and may not be renewed on terms the states accepting this deal would wish.

Therefore, it may all be a bait-and-switch for a federal government under a president who has long advocated universal, government-run health care, and whose successor if a Democrat likely thinks the same. Nor can any clause in the legislation allow the state to escape if the federal government in the future interprets the deliberately vague language regarding these issues in a way the state did not accept at the time of commitment, if such language was added to the bill.

Wisely, offered the same deal, Tennessee rejected it and Ohio seems on the way to doing the same. As Jindal has maintained all along, the only acceptable way for any expansion to occur it outside of the fee-for-service model, which the federal government has shown no signs of abandoning by its lack of genuine relaxation of existing “comparable pay” regulations.

Jindal and lawmakers would do well to suspect the window dressing in this bill changes nothing in that it would increase state costs without improving health outcomes. No good reason exists to make this into law.