The good news is federal government legal changes to discourage able-bodied adults without dependents who don’t want to use Medicaid as a bridge to reduced government dependency will allow the overwhelming majority of Louisianans to continue in the program. The bad news is for that reason taxpayers won’t see much savings.
The federal budget passed last year by Republican Pres. Donald Trump and the Republican majorities in Congress introduced many changes coming to Medicaid, among which were community engagement requirements (working, studying, or volunteering for 80 hours a month) for ABAWD and increased eligibility checks for those Medicaid expansion recipients in states like Louisiana. The former removes Medicaid expansion as a crutch from achieving personal independence while the latter reduces waste, which according to the latest annual data available meant state taxpayers lost over $9 million from the expansion population (known; these were just the ones flagged), for which overall state taxpayers ponied up $489 million.
The requirement may end up cutting taxpayer costs in another way. Research notes that adding such a requirement doesn’t change short-term health outcomes and may improve them over the long run because of resulting increased upward economic mobility that allows escape from low-performing Medicaid service provision to better privately-insured care.
Leftist special interests suffered apoplexy when these measures passed, predicting that the country would be overrun with sick people unable to afford insurance after getting kicked off of Medicaid for reasons they often alleged trivial, having more to do with inability or inattention in providing documentation than not working/studying/volunteering. A recent study projected that even with intense efforts to ensure those eligible actually received services that fully a quarter of the expansion population (which is about a half-million; even as Louisiana was losing population throughout Democrat Gov. John Bel Edwards’ terms and after Wuhan coronavirus pandemic waivers ended, the state steadily increased its Medicaid enrollment so nearly half of the population was on it) would be jettisoned under the new law.
But recently the state threw cold water onto that guess by predicting only 21,000, over 100,000 fewer than under the “optimistic” interest group scenario, would go off the rolls. Using wage data and experiential data from other states to determine this, this would mean only about four percent of the current expansion population would exit (the most extreme estimate by the leftist researchers was 54 percent).
The state has promised it will bend over backward to make sure paperwork doesn’t catch out eligible recipients. In any event, the application process asks for information similar to that to receive a home, car, or payday loan and should be burdensome for few, especially with technological aids the state plans to implement (which is a far cry from two decades ago when almost no detailed information was solicited).
That being the case, the state would save only $21 million from the inherently wasteful program. If the increased eligibility checks worked to near-perfection, that would bump up savings to $30 million. Contrast this with taxpayers saving over $100 million if the inflated estimates turned out to be true for a program that costs way more than it was sold for that has done nothing to improve the state’s health outcomes while beggaring programs for people with disabilities. Real relief would come by shelving expansion entirely, but once dependency is infused into the population, it’s politically difficult to remove it.
But some savings are better than none as the state has plenty of other priorities to fund. Republican actions at the federal level and Louisiana health administrators together will bring a nice dividend to overburdened taxpayers.
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