Louisiana legislators put off a decision about whether to renew contracts with the five companies that manage health insurance for 90 percent of the people enrolled in Medicaid in the state. The Joint Legislative Committee on the Budget decided to schedule a special meeting to vote on the contracts next week, instead of making the decision Friday (Oct. 20).
The contract extensions for the five companies are worth $15.4 billion over 23 months. Most of the funding for the contracts is provided by the federal government, but flows through the Louisiana Department of Health. Such spending could account for around one third of the state’s operating budget in the next fiscal cycle. The contracts help provide health care coverage for 1.5 million people — mostly pregnant women and children.
Lawmakers said they wanted more time to study the contracts. They were given about 5,000 pages of documentation covering the arrangements two weeks ago, but many felt ill-prepared for a vote on Friday. State Rep. Reid Falconer, R-Mandeville, compared the contract review to reading “Moby Dick”.
“I’m an architect. This is way above my pay grade,” said Falconer, a member of the House Appropriations Committee.
There is little chance the contracts won’t get approved, but Republican legislators have been tough on the state’s Medicaid program in general, which is run by Gov. John Bel Edwards, a Democrat. They were interested in maybe extending the contracts for a shorter period of time, not the 23 months the Edwards administration had recommended.
Republican Attorney General Jeff Landry and GOP lawmakers have highlighted cases of Medicaid fraud over the past several months, attempting to link an increase in illegal activity to Edwards’ decision to expand the Medicaid program in 2016.
Louisiana has been reeling from continuing budget problems for years. The Legislature is facing a billion-dollar-plus budget gap on July 1 that may cause legislators to have to look at renewing taxes. So legislators are sensitive to any misspending, especially in the health care arena where costs have grown dramatically.
But clamping down on Medicaid fraud and making Louisiana’s Medicaid program more efficient won’t provide as much of a solution to solving the state’s fiscal problems as it might appear. Since most of the Medicaid money comes from the federal government, most of it can’t be used for other purposes even if Louisiana’s Medicaid program becomes more efficient.
For example, if Louisiana needs more money for higher education or the TOPS college scholarship program, most of the money being used for Medicaid can’t be transferred to those causes because it isn’t state funding.
Still, Republicans are alarmed at the rate health care spending is growing in Louisiana. Even if the Medicaid budget is mostly federally funded, the state is required to chip in some money. State health officials said the rising costs make Louisiana no different than every other state in the country, though they acknowledge it continues to get larger.
“It does nothing but grow,” said Jeff Reynolds, who oversees finances for the Louisiana Department of Health, of the Medicaid budget.