LA to keep paying for ineligible Medicaid clients

Louisianans continue to pay unnecessarily for bad Medicaid decisions made by Democrat Pres. Joe Biden and Democrat Gov. John Bel Edwards, punishment that doesn’t look to end soon.

The state approaches the sixth anniversary of Edwards’ unwise choice to force the state into Medicaid expansion. For about a third to a half of the newly eligible who already had health insurance this welfare expansion shifted this cost from them onto the backs of taxpayers, and for the latest fiscal year available (2020) meant an extra $366 million taken from the wallets of Louisiana taxpayers – besides the portion of their federal taxes that went to pay for it.

Worse, it did little to save money by reducing emergency room visits because the proportion of recipients with extended waits for primary care went up by a factor of 14, as relatively few providers participate in the program that faced much increased demand because of expansion. This explains why uncompensated care costs have remained flat over the past three years – which expansion advocates said would drop considerably upon its adoption – at around $1.1 billion.

And the boondoggle became worse still when Congress, in response to the Wuhan coronavirus pandemic, passed legislation at the end of the first quarter of 2020 that prevented states from disenrolling Medicaid clients – even if they became ineligible through income and/or resource increases – if states accepted an additional 6.2 percent federal government payment of the amount in regular Medicaid matching payments made by it. This continuous coverage would last as long as the president, now Biden, kept declaring a public health emergency.

This caused yet another surge in Louisiana Medicaid expansion enrollment. When it started in the state in mid-2016, within a couple of years nearly 500,000 adults latched onto the dole (children already had been eligible for coverage by other programs). Seven quarters later, that had drifted down a few thousand, but with the new legislation it rocketed upwards again, standing in November of last year at an all-time high of about 706,000.

Interestingly, even though the pandemic has impacted jobs negatively, Urban Institute researchers have concluded that by 2021 that trend little affected enrollment increases. Applying their conclusions at the national level to Louisiana, most of the 225,000 enrollee increase since continuous coverage went into effect now comes from ordinarily ineligible recipients.

If so, the substantial Medicaid taxpayer burden for Louisianans has shot up further paying for people that it shouldn’t absent the law’s provisions. Assuming 200,000 of the expansion population fall into that category and the cost per client remained at the FY20 average of $6,392, since the state share is 10 percent that equates to putting state taxpayers on the hook for another $128 million (and don’t forget last year the federal government estimated that Louisiana already had an erroneous payment rate in the expansion population to ineligible recipients prior to the change of 4.17 percent).

However, the 6.2 percent shift from the state to the federal government has resulted in an additional (using FY20 numbers) $315 million available for state uses. That “surplus” promises to bring forth more grandiose spending commitments by Edwards that will be “paid” for only as long as the “emergency” lasts, leaving the state in fiscal crisis afterwards.

Although it doesn’t look like this giveaway will end anytime soon. The Biden Administration pledged to give states 60 days notice as to when it would end the emergency, a date that passed in mid-November without any sign he would cancel it despite a largely recovered (if troubled by Democrats’ big spending) economy – significantly, prior to the omicron virus variant surge.

Especially in light of the hyper-inflationary Build Back Better bill, which would have extended the continuous coverage provisions until next federal fiscal year, being put on the back burner, this clearly indicates Biden will extend the emergency declaration, using omicron as an excuse. And expect more excuses and extensions as long as he remains in office in order to keep the spigots of money flowing and sustaining increased benefits leading to greater dependency, jacking up the unsustainable national debt even further with its attendant ill economic effects.

So, for the foreseeable future Louisiana will have to get used to an environment where nearly half the population uses Medicaid. And so more people jump into the wagon, leaving fewer to pull it.