In his zeal to keep from diminution Louisiana’s welfare state politics that have given it one of the worst qualities of life and economic development in the union, Democrat Gov. John Bel Edwards will cost state taxpayers hundred of millions of dollars over his administration of Medicaid in the next 14 months.
That stems from his choices in unwinding the Wuhan coronavirus pandemic extended Medicaid spending. Three years ago when the pandemic descended, Congress declared that it would increase its allocation to the states by 6.2 percent beyond its normal share paying for the program, to last through the last quarter after the president declared the pandemic over. Democrat Pres. Joe Biden, needlessly delaying congressional termination to let the gray train keep rolling in order to try to boost votes for his party’s candidates last November, didn’t do so until the end of last year.
This resulted in an over one-quarter boost nationally to Medicaid rolls. States probably preferred this, as the best estimates are that at the 6.2 level states actually made more despite the expanded clientele.
One string to the deal was that once somebody qualified for Medicaid, they remained on the rolls until the declared end, when states could begin dropping those recipients who didn’t as late as 14 months after. Starting Apr. 1, states receive 5 percent more through the second quarter, 2.5 percent more through the third, and 1.5 percent more through the end of the year. Thus, states starting early enough in the first quarter, following exacting legal guidelines to prompt as many valid renewals as possible, could have the extra non-qualifiers off the books by the end of 2023 and of the bonus bucks.
Only one, Arkansas, chose this route. Seven others also chose to start early but could hang over terminations into 2024. By contrast, Louisiana grouped itself with the majority of states that started the process as late as possible. Worse, it is among the ten states that won’t start terminations for procedural reasons until July and plans to take the full 14 months to scrub the rolls, leaving the possibility that the rolls won’t be clean until nearly the end of the Legislature’s 2024 regular session. Worst still, as in the case of about a fifth of states it will use state-determined criteria, rather than the less-costly population- or time-determined approaches allowed in federal law, to conduct the process, and has asked for cost-savings waivers such as less scrutiny in asset verification that will allow ineligible recipients to remain longer onboard.
At least the state chose a couple of cost-saving options. One is as with a majority of states it will flag petitioners into the program throughout the process to perform the eligibility check then rather than accept and toss them into the renewal process. It also, like most states, has up front an outside party review modified adjusted gross income figures to determine eligibility.
Nonetheless, this effort alone will cost over the next two budget years an extra $195.8 million, as over 300,000 typically-ineligible recipients are estimated to clog the rolls, although some of this cost would have been incurred anyway during a typical pre-pandemic renewal review. The delayed response also will cost more.
Taking an ineligible figure of 300,000 adults and the average annual cost per non-disabled adult of $5,842 for the latest data (fiscal year 2021), plus the expected federal government share of just over $14 billion (keep in mind with extended Medicaid nearly 43 percent of state residents enjoyed the program’s benefits), the 6.2 percent bonus excluding administration costs was worth $871 million (this is a rough estimate as the federal government matches at different rates for different things, from 0 to 100 percent but the average is about 77.3 percent, meaning for the adult non-disabled population the state pays $1,326 each). Assuming the total clears by a fifth each quarter through the second of 2024 (minus one month), by the end of the year the state will have distributed from its own funds $835 million on the ineligible population although it will have received only $574 million for the year.
The problem becomes magnified for 2024 as there’s no enhanced match and 120,000 ineligible recipients to go. That will cost an extra $80 million in state money next calendar year. By contrast, had Louisiana gone with Arkansas’ schedule, it would have spent only $597 million and nothing extra in 2024 by clipping five months off and having the typical ineligible recipient draw fewer months’ worth of benefits (this figure would rise or fall depending on whether clearance occurs linearly on nonlinearly).
So, not only does the unwinding cost extra, the slower pace of it will cost nearly an extra quarter-billion dollars from taxpayers, going to people not eligible for it. Note as well that as 45 percent of the nondisabled adult recipients come in through expansion – where data indicates a third to a half of them already could have insurance privately, through an employer, or by other means – Medicaid expansion caused over $100 million of the wasted money.
But, to Edwards and his leftist allies it’s not important to waste taxpayers’ hard-earned dollars but rather to redistribute as much money as possible to their presumed voting base. It’s just one more demonstration why Louisiana lags the rest of the country.
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