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Official: Expanding Medicaid to net Louisiana $677M savings

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BATON ROUGE, La. (AP) — Expanding Louisiana’s Medicaid program is estimated to save the state $677 million in its first five years, Gov. John Bel Edwards’ administration said Monday as the Democratic governor announced enrollment will begin June 1.

The savings would come, according to the state Department of Health and Hospitals, from taking advantage of enhanced federal financing rates for health services that Louisiana currently provides for the poor and uninsured.

The projections presented to the Senate Health and Welfare Committee contrast with estimates provided to lawmakers in previous years under Republican Gov. Bobby Jindal. Jindal opposed Medicaid expansion.

Jindal’s health secretary told lawmakers in previous years the expansion would cost Louisiana $1.7 billion over 10 years. Edwards’ health leaders instead estimated more than $1 billion in savings over a decade.

Edwards’ health secretary Rebekah Gee told senators the Jindal administration cost estimates were “inflated to be unrealistic,” assuming increased payments to health providers and other administrative costs that were “absolute worst-case scenario.”

Medicaid expansion will cover adults ages 19 to 64 making up to 138 percent of the federal poverty level — about $16,200 for a single adult or $33,400 for a family of four. The federal government will pick up the full cost of the health services for a short period of time. Louisiana will later have to pay a share that eventually will increase to 10 percent.

Even when Louisiana starts paying its full 10 percent cost share, the enhanced federal financing for other parts of the health budget still offer net savings, Gee said.

“When we look at realistic assumptions, the balance sheet looks very good for the state,” she said.

Edwards assumes $180 million in savings in his budget proposal for next year.

Louisiana will become the 32nd state to expand the government-financed health insurance program to the working poor when the new coverage begins July 1.

Republicans in the Louisiana Legislature have blocked expansion efforts in prior years amid Jindal’s opposition. But both GOP and Democratic senators on the health committee appeared Monday to have few objections.

The Republican chairman of the committee, Sen. Fred Mills, described it as a “friendly hearing,” telling Gee that senators want to work with her “so we can be true partners.”

In office since January, Edwards made expansion a centerpiece of his gubernatorial campaign. He updated the Senate committee personally Monday, announcing that enrollment for the expanded coverage will begin in about six weeks, on June 1.

In May, the health department intends to mail notices to 200,000 people who receive some state health care services and will be eligible for the expanded Medicaid coverage. They’ll be automatically enrolled in one of Louisiana’s Medicaid plans administered by managed care companies.

Edwards estimated at least 300,000 people will get insurance from the expansion. He said 70 percent of enrollees will be full-time workers in industries like food service, tourism and construction.


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