Louisiana Medicaid Spending Reaches Max For Federal Matching Funds

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Louisiana Medicaid spending soon will outpace education, law enforcement, infrastructure and other state budget items if growth of the program is not contained, state Department of Health and Hospitals Secretary Alan Levine said on Friday at the annual meeting of the Council for A Better Louisiana, the Baton Rouge Advocate reports. Medicaid provides health coverage for about 25% of the state's residents, according to the Advocate.

Louisiana currently spends 16% of state revenue on Medicaid, up from 10% in 2004, and it is expected to account for 21.5% of state revenue spending by 2011, Levine said. He said that the federal government is projecting an 8% annual Medicaid growth rate in the future, which means next year the state will need an additional $450 million in state and federal funding to sustain the program at current levels.

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In addition, Louisiana is within $50 million to $70 million of reaching the $1.5 billion limit for federal participation of uninsured care costs, after which the state must pay 100% of the cost, he said. Based on the estimated growth in uninsured care, the state would have to raise $300 million to $600 million annually in addition to the normal Medicaid program growth if the cap is reached, according to Levine.

Levine touted Gov. Bobby Jindal's (R) Medicaid overhaul plan -- which would change the way that providers are reimbursed and create incentives for improving health and penalties for deficiencies -- as the solution to curb spending in the program (Shuler, Baton Rouge Advocate, 12/6).

Reprinted with permission from kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, and sign up for email delivery at kaisernetwork.org/email . The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation. © 2007 Advisory Board Company and Kaiser Family Foundation. All rights reserved.

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