BATON ROUGE, La. (AP) – Jindal administration leaders warned Wednesday that a proposal being considered by Congress in final negotiations over a massive transportation spending plan could strip more than $650 million in federal funding from Louisiana’s Medicaid program over two years.
The cut could shutter services and force deep reductions to spending on hospitals that care for the poor and uninsured in the fiscal year that begins July 1.
Health and Hospitals Secretary Bruce Greenstein said that if the Medicaid cut is approved, the state would eliminate programs that care for women with breast and cervical cancer, provide hospice care and offer adult dentures to the poor and uninsured.
Steep funding cuts also would be levied across the LSU public hospitals and rural hospitals, and Greenstein said the rates paid to the doctors, clinics and other health providers who care for Medicaid patients would be slashed by 10 percent.
“This would have some very serious consequences,” Greenstein said in a conference call with reporters and Jindal’s top budget adviser, Commissioner of Administration Paul Rainwater.
The proposal being considered by Congress targets a provision that U.S. Sen. Mary Landrieu added to the federal health care overhaul law that was designed to buffer Louisiana from a Medicaid rate drop because of the influx of rebuilding dollars after hurricanes Katrina and Rita in 2005.
House Republicans have been pushing to find ways to offset some of the costs for the highway program. Rainwater said members of Louisiana’s congressional delegation have been asking what the impact would be if the Medicaid cut were to hit the state budget.
Congress is facing a weekend deadline to settle on a final version of the transportation bill because the highway programs are due to expire Saturday.
“If Congress does this to us, we’ll have to be prepared to deal with it,” Rainwater said.
The state could lose as much as $425 million in direct federal funding in the 2012-13 budget year and another $226 million the following year. But Greenstein said the full impact would be higher under the complex formula for Medicaid funding.
Greenstein and Rainwater estimated $1.1 billion would have to be cut from the $7.7 billion Medicaid program in the coming fiscal year when state and federal matching dollars are included in the calculation.
“It will not be painless by any stretch. This comes after several years of reductions already, but the state has only a certain budget to work with. The Medicaid program will go on,” Greenstein said.
The special Medicaid adjustment added to the federal health care overhaul two years ago applied only to Louisiana.
At the time, Landrieu and the Jindal administration said Louisiana’s federal assistance for Medicaid shouldn’t be cut because a post-hurricane rebuilding surge temporarily drove up average income in the state.
Since then, questions have been raised about whether there was a miscalculation and Louisiana was slated to receive more money than it should have under the provision.