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The Louisiana Department of Health could not say Friday He was surprised by the 100 million dollar government cut on the agency’s budget It could mean state health care, though it’s expected to balloon and hurt access to medical services for low-income residents.
“LDH is aware of the Louisiana Legislature’s budget cuts made in the final hours of the 2023 legislative session and LDH is evaluating the impact on the services the department provides,” agency spokesman Kevin Litton wrote. “The department’s priority is to continue providing services to our at-risk residents without interruption.”
Governor John Bel Edwards, health care lobbyists and several state legislators in both parties were there. Blind Thursday In the final minutes of their two-month session, leaders of the House and Senate announced a dramatic cut in government health care spending on a night.
The impact of the cuts has the potential to grow to $500 million because the state will use the health care money to get more federal funding, advocates and the governor said indirectly.
The cuts could hit hospitals that receive more money to treat people with publicly funded Medicaid insurance, and the funding could cause the facilities to pull back on services for low-income patients.
It was unclear to the governor whether major health care cuts would be on the table this year, saying Louisiana has an unprecedented amount of money to spend on state spending. It is expected to bring in an additional $2.2 billion next year.
“I have no problem making cuts when necessary, but we have a $2.2 billion surplus,” said Sen. Jay Luno, D-Alexandria, who voted against the budget plan on health care cuts. “Why are we cutting the poor?”
The push for the health care cuts came from the Louisiana House, where conservative Republicans have complained about the state’s ever-increasing health care costs.
Many councilors insist the health department has enough fat to sustain a $100 million deficit without providing many services.
“I don’t think it will ultimately hurt them,” House Conservative Caucus Chairman Jack McFarland, R-Jonesboro, said in an interview Friday.
On Thursday, roughly $20 billion of the state’s $44 billion budget will be spent on health care, and the governor proposed increasing state funding for those costs. 205 million dollars from the current level of expenditure. Housing conservatives argue that scaling back $100 million from that increase shouldn’t have a significant impact on services.
House Compensation Committee Chairman Jerome Zeringe, R-Homa, also believes the Health Department and other state agencies are “displacing” funding in anticipation of a change in the governor next year.
Edwards, a Democrat, could be replaced by a Republican who is trying to cut government spending, and said agencies are hanging on for money to soften the impact.
Legislators direct the state to cut certain health plan costs in a certain way. Of the $100 million reduction, $22 million must come from state funding. Medicaid non-enrollment efforts.
Louisiana has begun kicking people off Medicaid rolls after a three-year hiatus due to the Covid-19 pandemic. The state expects to take about a year to reduce the rolls, but lawmakers are trying to force the health department to act quickly with $22 million in cuts.
You want the Medicaid cleanup to happen over 12 months. But state health officials have repeatedly said that speeding up the process is more difficult than council members suggest.
Louisiana Health Secretary Stephen Russo told lawmakers last month that he could not shorten the enrollment period without federal approval — a process that would take several weeks.
Russo also said the state could face large federal fines if the Biden administration decides it is recklessly kicking people out of Medicaid, saying the state must act deliberately in the program.
Very few options
There are also not many easy places to make the other cuts required in the health department.
More than 70% of the state’s $20 billion health care budget is federal money. The $100 million cut would have to come from the general fund portion of the spending plan alone, which is roughly $3 billion.
But almost every state dollar spent on health care is used to fund more federal dollars for those same programs. So when the state dollar goes down, it has a multiplier effect.
Much of Louisiana’s health care spending is tied up in legally binding private contracts that the state must still pay for. The private organizations that run most of the state’s Medicaid program are expected to receive $10.1 billion this fiscal cycle, according to a December financial report.
Louisiana’s health care costs will also grow, in part because lawmakers have mandated some spending increases.
By law, the state must raise the cost of nursing homes every year, which Thursday saw health care funding increase by $126 million in the last budget alone. Most of the money comes from federal sources, but $31.8 million of the increase comes from state general funds.
Lawmakers included language in the budget that said none of the cuts could come from “disability or disability services” — programs that provide care for the elderly, children with chronic illnesses and others. The guidance essentially leaves hundreds of millions of dollars off the cap, leaving those with experience in health care budgets wondering where the $100 million in cuts will come from.
“This should have been discussed more broadly,” said Sen. Fred Mills, R-Parks, who voted against the budget because of health care cuts. “We had to have days of public discussions about this.”
As chairman of the Senate Health and Safety Committee, Mills said the $100 million cut could require a series of public legislative sessions to be discussed in more detail.
Who knows what and when
It’s not unusual for lawmakers to vote on the budget in the final moments of a legislative session, but typically, what the major changes to the spending proposal will be are already worked out.
But this year, only a very small group of lawmakers understood that a major cut to health care spending had been proposed before the session’s deadline. Many say big cuts to health care are not being seriously considered because the state is strapped for cash.
Sen. Cameron Henry, R-Jefferson, said, “It’s going to be hard to explain how you have a $2.2 billion surplus, and you still cut LDH by $100 million, and the cut was only discussed in the last hour of the session.”
Senate President Paige Cortez, R-Lafayette, said House leadership realized it wanted to cut health spending by $100 million a day before most lawmakers. But he did not know that there are limits on where the money can come from in health care programs.
During a meeting with House leaders Wednesday, Cortez said he was “begging” for copies of budget documents detailing health care cuts and other changes. But he didn’t receive that paper until Thursday evening, before the budget was voted on. At that time, he did not have enough time to explain his plan to the senators and ask for their opinion. They just had to take their vote.
“I’m sorry I didn’t have the opportunity to be honest with the senators if I’m upset about anything,” Cortez said. It was a little unfair to the rest of the senators.
Cortez said he will try to reduce the fall in health care services during the monthly meetings of the Joint Legislative Committee on the Budget, where lawmakers have limited authority to move around money outside of the legislative session.
Fix the veto?
The governor has said he will try to reverse — or at least reduce — the health care cuts, though Edwards was not ready to outline his plans to do so.
“Stay tuned,” he said Thursday when asked about his strategy.
Few lawmakers believe the governor may be considering a line-item veto of the $100 million budget cut, though that could create problems for other parts of the spending plan.
If Edwards reverses the $100 million in health care cuts, he would have to spend the same amount from another part of the budget to keep spending reasonable.
This could mean cutting back on projects and other initiatives that lawmakers have prioritized. Many lawmakers agreed to spend more state money than expected this year because they were assured it would go toward infrastructure projects in their home districts. If the governor starts shifting the money to health care, it could discourage lawmakers.