Health Care Budget: 'Big is Federal'

Apr 7, 2017

Nearly half the $29.7-billion proposed state budget is recommended for spending by Louisiana’s Department of Health.

“Yes, it’s big, because we’re a poor state,” Department of Health Secretary Dr. Rebekah Gee told members of a House Appropriations sub-committee this week. “And when you talk about big, don’t lose sight that ‘big’ is federal.”


Gee was defending her department’s $14-billion spending plan, in advance of the legislative session which starts Monday.

“This year my budget comes in at almost ten percent less than it did last year in State General Fund,” she said. “And the growth is federal. We have $1.5-billion in additional federal revenue. Without this federal investment in our Medicaid program, you’d take $10-billion out of our state budget.”

Legislative fiscal analyst Nancy Keaton reminded the panel that about 40-percent of the total state population is currently enrolled in Medicaid, and that the largest contingent of those are children.

But some lawmakers, like Republican Representative Bob Hensgens of Abbeville, keep getting hung up on the total numbers.

“We’ve talked about expansion saving the state dollars, and I understand how it should,” Hensgens said.” I mean, if we’re getting a 95% match rate compared to the old match rate on some of the people we’re covering, it should save us dollars. And yet state effort is still creeping up. So where’s my state effort going up?”

Department of Health Undersecretary Jeff Reynolds explained that “total state effort” includes statutory dedications – like the self-imposed fees assessed by hospitals and managed-care organizations – and has to be included in the flow-through state budget to be counted as state effort toward the federal match.

“It is a case where State General Fund is coming down, but the assessments and the MCO tax all flows into the Medical Assistance Trust Fund, which is in stat ded means-of-financing,” Reynolds said.

Baton Rouge Republican Rick Edmonds remains concerned about the continued overall climb in health care spending.

“Where do you think this is going?” he asked Dr. Gee.

“You hope people will start getting jobs that provide health insurance, but until then we’re going to have a large number of people that need that,” she responded, adding, “The state cannot be healthy economically if it’s not healthy physically.”