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State Legislature looking at Medicaid expansion

Last Modified: Tuesday, April 09, 2013 6:36 PM

By Jim Beam / American Press

BATON ROUGE — Gov. Bobby Jindal continues to oppose the state's participation in an expanded federal Medicaid program, but there appears to be a slow move by the Legislature in that direction.

Four bills and two resolutions aimed at forcing the state to join the program are awaiting action in both the House and Senate.

The governor said his opposition is based on the fact the current Medicaid system is broken, states aren't given enough flexibility to design programs and the expansion would cost the state $1.7 billion over 10 years.

The Senate Committee on Health and Welfare heard from three groups here Tuesday in an effort to get a handle on the pros and cons of joining the program, set up by President Obama's Affordable Care Act. The Joint Senate and House Insurance Committee held an earlier five-hour hearing on the expansion.

It has been widely reported that up to 400,000 Louisiana residents who are working but uninsured would benefit from the expansion. Some 1.3 million state residents are currently in the Medicaid program.

Democratic governors generally favor joining the program, but Republican chief executives have held back for some time. Now, some of them are having second thoughts.

Arkansas has come up with an alternative plan that has aroused interest in other states. It wants to enroll those who are newly eligible for Medicaid in the same private insurance plans available to individuals and small businesses. The plan is awaiting final approval.

Expanding Medicaid would mean adding those residents below the 133 percent of the poverty level (about $15,000) to the rolls. They are working but don't qualify for Medicaid and won't be allowed to buy health care coverage through exchanges being set up by Obamacare.

The Senate committee heard by telephone from Ray Hanley, president and chief executive officer of the Arkansas Foundation for Medicaid Care. 

Hanley said hospitals in states that don't expand Medicaid face reductions in federal Medicare funds they get for caring for the poor and uninsured.

To do nothing like Louisiana is doing is the worst approach of all, Hanley said. It would force the closure of most rural hospitals, he said.

"The option of doing nothing makes no sense," he said. "States have three years to determine whether it works."

The federal government will pick up the entire cost of the expanded program for those three years and 90 percent thereafter.

Under the new health care law, businesses with more than 50 employees would have to provide insurance or face penalties. A recent study said those penalties could cost state businesses from $51.7 to $77.5 million annually.

Joy Johnson Wilson, health policy director with the National Conference on State Legislatures, said California, Maryland, Connecticut and Washington State have the most advanced Medicaid expansion programs. Five other states, like Arkansas, are considering alternative ways to expand the program, she said.

Kathy H. Kliebert, interim secretary of the state Department of Health and Hospitals, told the committee Obamacare was rushed and state insurers have reservations about meeting deadlines. Funding is also unstable and can't be counted on, she said.

Jerry Phillips, DHH undersecretary, said the Medicaid expansion has been significantly overblown and half the state's population is already on some type of Medicaid reimbursement.

Sen. Fred Mills, R-New Iberia, said he has met with health care providers (doctors, pharmacists and others) and they don't see how the state can afford not to expand Medicaid.

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