The summer of 2012 will be remembered as the time when Louisiana’s top Republicans made two policy decisions that undermined the health security of every Louisiana individual, family and business. Those decisions threatened the financial viability of large segments of the health care provider community, raised the prospect of significantly higher health care costs in the state, and increased the number of people without health insurance.
First among those policy decisions was Governor Jindal’s choice for Louisiana to refuse to participate in the health insurance exchange and Medicaid expansion provisions of the Affordable Care Act.
The second was the decision by Senator David Vitter and Jindal to sit idly by and allow the Transportation Bill that came out of a House/Senate conference committee to contain a clawback of more than $600 million in federal support for Louisiana Medicaid.
These separate but linked decisions lock all parts of the state’s health care delivery system — insured, uninsured, doctors, hospitals and clinics — into a cost escalation death spiral that will price health insurance out of the reach of more Louisiana citizens while the rest of the country enjoys a respite thanks to the Affordable Care Act.
The Medicaid cuts will diminish public and private sector capacity to address the health care needs of the uninsured, and force private health care providers to accelerate cost shifting as a means of paying for the care of the uninsured which will, in turn, accelerate the increases in cost of health coverage to Louisiana residents with private health insurance.
That cost shifting to pay for care provided to those without the ability to pay for it is the force that created the health insurance crisis that the Affordable Care Act was enacted to remedy.
The Affordable Care Act breaks that cycle by making health insurance coverage available to the working poor and the middle class through the expansion of Medicaid and the creation of health insurance exchanges, respectively.
As a result of the actions of the Governor and our junior United States Senator, health care cost shifting in Louisiana is going to accelerate rather than be brought under control.
Jindal’s Disastrous Decision
At its core, the Affordable Care Act is an insurance policy for everyone who now has private health insurance. The law attacks cost shifting by extending coverage to more people; that is, reducing the number of people without some form of health insurance.
Governor Jindal’s decision to refuse to allow Louisiana to participate in key provisions of the ACA will deny health insurance coverage to 700,000 Louisiana citizens that the law would otherwise cover.
It gets worse.
By blocking the extension of health insurance coverage through the ACA, Jindal is exposing those Louisiana residents with private health insurance to the cost shifting forces that will ensure they will be priced out of the coverage they now have.
There are approximately 900,000 Louisiana adults (age 19 to 64) without health insurance. The Affordable Care Act would bring health coverage to about 700,000 of those currently uninsured, working adults.
The Medicaid expansion provision of the law would extend coverage to 366,000 people who earn 130% of the federal poverty level. That’s workers who earn just under $15,000 per year, or about $30,000 for a family of four. Not taking part in the Medicaid expansion means Jindal is forcing Louisiana providers to forego $7.2 billion in new federal funding.
The health insurance exchange would serve as a conduit for tax credits and subsidies to businesses and individuals to help them afford private health insurance purchased through the exchange. The Louisiana Budget Project estimates that the health insurance exchange provision would extend coverage to another 350,000 currently uninsured working Louisiana residents and their families.
So, Governor Jindal, when he pretends to be standing up to the Obama administration, is actually strangling the hopes of 700,000 of his fellow citizens currently without insurance. The money will go to citizens in other states. A growing number of Louisiana citizens will continue to join the ranks of the uninsured.
Jindal’s refusal to participate in the health insurance exchange and the Medicaid expansion will financially maim private and community hospitals which are legally bound to provide care to anyone who shows up at their doors.
While the ACA is reducing the number of uninsured in other states, the federal government will reduce funding for Disproportionate Share, the program currently used to help defray the cost of providing care to the uninsured.
Thanks to Jindal’s obstinance, Louisiana community hospitals will be forced to care for a growing number of uninsured Louisiana residents (no Medicaid expansion; no health insurance exchange) without the federal assistance that currently helps pay for care provided to the uninsured. In other parts of the country, the law will be reducing the number of people without health insurance. Not in Bobby Jindal’s Louisiana.
Jindal’s refusal to participate in the exchange positions Louisiana to join in yet another legal challenge to the law in an attempt to curry favor with extremist elements in the Republican Party. This is all about Jindal positioning himself as a radical Republican in order to pursue the 2016 Republican nomination for president.
Vitter’s Revenge
Senator David Vitter landed a seat on the House/Senate Conference Committee for the Transportation Bill that ultimately passed Congress just before the Fourth of July. Our junior Senator was positioned to advance our state’s interests in that bill, which he said he did on a number of fronts. But, he did not lift a finger to stop the Medicaid clawback, nor did he want to talk about it.
One person who did want to talk about it was Senator Mary Landrieu who recounted her efforts to get Jindal to intervene with his former House colleague and now Speaker John Boehner. The Governor could not be bothered.
The people who run LSU’s hospitals have long viewed the Affordable Care Act as offering a pathway to long-term sustainability of that system. As the Transportation Conference Committee began its work, the Supreme Court upheld the constitutionality of the ACA.
Vitter’s consent to allowing the Medicaid clawback in the Transportation Bill can be viewed as an effort to try to take out the LSU hospitals before the ACA lifeline becomes available in 2014.
As a result of the Medicaid clawback, Vitter still might achieve one of Louisiana conservatives’ long-cherished objectives of delivering a lethal blow to the LSU Hospital system. But, the harm will not be confined to the LSU hospitals, as uninsured and Medicaid patients will inundate private and community hospitals seeking the care they need. The Louisiana Hospital Association says the Medicaid cuts resulting from the Transportation Bill put rural hospitals, in particular, in jeopardy.
In Vitter’s perspective, the damage to those hospitals is an avoidable cost of achieving his larger goal of shuttering the LSU hospitals.
Medicaid is a public/private partnership, with public funds paying for the delivery of health care from mostly private sector providers.
By allowing the clawback of the Medicaid funding into the Transportation bill while a member of the conference committee, Vitter consented to the dire consequences and the collateral damage he knew would follow.
Louisiana congressional Republicans Steve Scalise and Bill Cassidy sit on the House Energy & Commerce Commerce, where the clawback provision originated. They, too, did nothing while Louisiana’s Medicaid program was gored — regardless of the toll in human lives.
No Firewalls
While Jindal, Vitter and their Republican allies derive satisfaction with the dismantling of the state’s public hospital system, the fact is that there are no firewalls between the public and private health care delivery systems.
People with private insurance get their hospital care in the very private and community hospitals that the Vitter Medicaid cuts imperil.
The losers in these Republican political games will be Louisiana citizens. President Obama will not be hurt by Louisiana’s refusal to participate in the health insurance exchange and the Medicaid expansion; Louisiana citizens —insured and uninsured — will be.
Louisiana Republicans are undermining the health security of every Louisiana individual, family and business through the Medicaid cuts they clearly sought and through the acceleration of cost shifting that will result from the state’s refusal to participate in key elements of the Affordable Care Act.
This wanton recklessness must be stopped. Louisiana Democrats must lead the way.
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Originally published: July 28, 2012