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Medicaid Expansion Poses a Challenge for New Governor

By Marissa Evans, CQ Roll Call

January 26, 2016 -- While tackling a $1.9 billion budget deficit, Louisiana’s new governor will also have to juggle bringing 350,000 low-income residents into the state’s health insurance program for the poor — and he’s determined to get it done fast.

On Jan. 12, his second day in office, Democratic Gov. John Bel Edwards signed an executive order to expand Medicaid. The order is a first step toward fulfilling a campaign promise and marks a turning point for a Southern state whose previous governor, Republican Bobby Jindal, staunchly opposed the 2010 federal health care law better known as Obamacare.

"Louisiana’s tax dollars should not be going to the 30 other states that have expanded Medicaid when working families here at home need access to health care," Bel Edwards said in a news release.

A 2014 Urban Institute study found that Louisiana would spend $1.2 million between 2013 and 2022 on expansion. However, in that same time period, if Louisiana were to not expand Medicaid, it would have lost out on $15.8 billion in federal Medicaid funding and $8 billion in hospital reimbursements.

As the Bel Edwards administration prepares to hand Medicaid cards to eligible residents by July 1, there’s lots of work to do and little money to do it with.

"I won’t say I’m worried about it but I want to make sure we’re ready to do this administratively," says Republican state Sen. Fred Mills, chairman of the Health and Welfare Committee.

Republicans in the Louisiana Legislature have warmed up to Medicaid expansion since Jindal left office, according to Mills. Still, Mills says Bel Edwards’ July deadline will require planning.

On the bright side, the governor’s expansion plan is a basic version that will not require policy waivers from the federal Centers for Medicare and Medicaid Services, says Matt Salo, executive director of the National Association of Medicaid Directors.

Even so, Salo says, there could be difficulties determining Medicaid eligibility and getting providers and insurers to buy in.

"It’s not like turning on a light .... You can’t just flick a switch and say magically we have expansion," Salo says.

Jeff Drozda, CEO for the Louisiana Association of Health Plans, says the biggest issue is how the enrollment process will work and how the state plans to reach potential beneficiaries.

Some providers, who stand to pick up new revenues to offset the uncompensated care they now deliver, are doling out cash to make sure expansion happens without a hiccup. The health department has secured more than $3 million in pledges from providers and health plans to fund expansion startup costs for enrollment and eligibility determination efforts, according to the governor’s office.

"This effort will save Louisiana money on administrative costs and place enrollment staff on-site in health care facilities where they can reach more uninsured patients," Paul Salles, president of the Louisiana Hospital Association, said in a Jan. 12 news release.

State officials say they’ll need nearly 250 additional employees to help with enrollment efforts.

Doctors in the state will feel better about taking on more Medicaid patients if the Bel Edwards administration "reduces the hassle factor" of the program, says Jennifer Marusak, vice president of government affairs for the Louisiana State Medical Society. "It’s not that any of these folks are trying to make money, they’re trying to break even," Marusak says.

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