Newly elected Democratic Louisiana Governor John Edwards, sworn in earlier this week, has made history by quickly announcing that he would expand the state Medicaid program. Driven by both a financial and a moral imperative, Gov. Edwards seeks to use federal funding through the Affordable Care Act to provide insurance coverage to approximately 300,000 low-income individuals and families, making Louisiana a lone beacon among southern states that have actively resisted the opportunity. And the expansion could not come soon enough.
America’s Health Rankings recently ranked Louisiana as 50th –dead last — as the state with the worst health in the nation. With a high prevalence of smoking, obesity, and chronic disease, the state faces increasingly serious public health problems while resources dwindle. In the past 5 years, the number of children living in poverty in Louisiana has increased by 73 percent while public health funding has decreased by 33 percent. Efforts to improve population health are further hindered by the state’s ailing healthcare system, which ranks 48th in the nation in its performance. All of these statistics are only exacerbated by the state’s uninsurance rate of approximately 16 percent, or 4 points higher than the national average.
Clearly, a statewide expansion in access to healthcare is sorely needed. However, the decision to expand Medicaid has important financial ramifications. Through a recently announced effort, the federal government will continue to pay 100 percent of the expansion cost initially, but Louisiana will eventually have to cover 10 percent of the costs of expansion. For an administration inheriting a $750 million dollar state budget deficit, this is a tricky proposition. The previous governor, Bobby Jindal, staunchly opposed expansion due to its expense, among other reasons. However, Gov. Edwards remains committed to expanding Medicaid by July 1. In order to accomplish this, incoming Health Secretary Dr. Rebekah Gee expects the health department will have to hire 250 new workers to handle eligibility and enrollment, with costs totaling about$2 million. The source of funding for these short term costs is unclear as well.
The challenges ahead are complex, and balancing the budget is only one of them. Gee has also highlighted the importance of getting providers on board, as many physicians in Louisiana and across the nation currently refuse to see Medicaid patients due to low reimbursements and administrative burdens. Delivery system and payment reform initiatives will be critical to containing the increased costs of expansion, but increased cooperation among stakeholders, including novel ways of engaging communities and patients, is also needed to ensure newly insured people can appropriately access the care they need.
On a national note, neither the tremendous need nor the daunting challenges are unique to Louisiana. The state should look to models such as Kentucky and Colorado to better understand how they might be able to lower the cost of care for Medicaid patients while improving the quality of their care. Borrowing proven methods to optimize eligibility and enrollment, such as utilizing food stamp (now called SNAP) program eligibility to automate enrollment, may be the key to a smoother expansion. On the other hand, many southern states (e.g. Alabama) facing similar health problems and financial constraints will watch Louisiana closely. Whether Gov. Edwards delivers on or falls short of his promises, the state will become an example for other states as they consider the same decision. As we enter into a murky election year, Louisiana has started the year on a hopeful note and moving from worst to best is within their grasp.
i United Health Foundation. “America’s Health Rankings: Louisiana.” Published online 2015. Available at: http://www.americashealthrankings.org/LA
ii Jindal, Bobby. “Why I opposed Medicaid expansion.” Published online 7/23/13. Available at:http://www.nola.com/opinions/index.ssf/2013/07/gov_bobby_jindal_why_i_opposed.html
Editor’s note: Suhas Gondi contributed to this post.
The Initiative is a partnership between the Economic Studies program at Brookings and the USC Schaeffer Center for Health Policy & Economics, and aims to inform the national health care debate with rigorous, evidence-based analysis leading to practical recommendations using the collaborative strengths of USC and Brookings.