Louisiana Medicaid expansion program has $3.5B impact

Louisiana’s Medicaid expansion program has helped create or support nearly 19,200 jobs across the state and $178 million in state and local taxes, according to a new economic analysis.

The three LSU professors hired by the state health department to look at the program during the 2016-17 budget year determined that the infusion of $1.8 billion in federal spending on health care through the Medicaid expansion had a $3.5 billion economic impact in Louisiana.

Economist Jim Richardson, the lead author on the study, said the jobs were spread around the state and should continue as long as the federal financing of the program continues.

Gov. John Bel Edwards championed the Medicaid expansion and moved to enact it as soon as he took office more than two years ago.

More than 470,000 people have enrolled in the government-financed coverage for the working poor and other nonelderly adults, which began July 1, 2016. The Edwards administration says more than 183,000 people in the program have received preventive services that in some instances have identified cancer, diabetes and other illnesses.

Adults ages 19 to 64 with incomes up to 138 percent of the federal poverty level – about $16,750 for a single adult or $28,680 for a family of three – are eligible for the coverage through one of Louisiana’s Medicaid plans administered by private managed-care companies.

Edwards, a Democrat, said Louisiana is saving more than $300 million this year by tapping into the Medicaid expansion’s enhanced federal financing rates for coverage the state already had provided to the poor and uninsured. The higher federal match rate makes the care cheaper for Louisiana.

The federal government is paying most of the Medicaid expansion cost. Louisiana is paying a share that eventually increases to 10 percent. Lawmakers passed financing tools to help cover the state’s costs, including a tax hike charged on health maintenance organizations.

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