Louisiana officials will have to notify around 60,000 elderly or disabled people they will lose their Medicaid benefits in early May as a result of the Legislature’s stalemate over the state budget and taxes.
In addition, about 14,000 people who get personal care assistance at home are also likely to be notified in early May that their services could be eliminated in July.
Gov. John Bel Edwards has proposed eliminating some Medicaid programs that provide long-term care in order to cope with a $994 million budget deficit. The governor said he doesn’t want to put forward such cuts, but he doesn’t have much of a choice given the state’s financial restrictions starting July 1, when the new budget year begins.
The Louisiana Department of Health said it is legally obligated to warn people about what might be coming before that point, even if the programs are ultimately spared from cuts.
“Whenever you make a change in Medicaid, at a minimum, you have to give everyone a 60-day notice,”
said Jeff Reynolds, the health agency’s chief financial officer, in a House Appropriations Hearing Tuesday (March 13). The advanced notice is required by federal law, a health department official confirmed.
Legislators will try to avoid Medicaid cuts by using anticipated extra revenue or approving new taxes, but those solutions won’t be in place until mid-May at the earliest. They failed to raise taxes or other revenue in a special session that ended last week, and they haven’t proposed alternatives cuts to ones that governor has put on the table in the current regular session.
Another pot of money that could be used – a $302 million increase in state income tax revenue — won’t be verified until mid-May, after some notices about eliminating Medicaid services will have already gone out.
Those who will receive the warnings include 46,000 Medicaid recipients who qualify for long-term care in a nursing home or at their personal residence, but also have some personal income in spite of their disability — between $750 and $2,250 per month. In addition, about 14,000 people who get personal care assistance at home — such as bathing and eating — are also likely to be notified.
If the state cut the long-term nursing home and home care program, its recipients might qualify for other types of Medicaid, but it wouldn’t cover the cost of those exact services, Reynolds said.
Its estimated that 80 percent of these recipients will be notified their benefits would be cut. The Louisiana Nursing Home Association estimates about 16,500 residents would be forced out of nursing facilities if that becomes a reality.
“We’ve really never been forced to go that way in the last 10 or 12 years we’ve been dealing with budget cuts,” Reynolds said at the committee hearing.
House Appropriations Committee Chairman Cameron Henry, R-Metairie, said the notices will pose a problem, but he also implied that the Edwards administration didn’t have to propose the cuts and could have prevented them from going out.
“This administration, like other administrations, always go after the poor and vulnerable when they are trying to scare legislators into voting for taxes,” Henry said.
House Republican leaders have said they intend to avoid making Medicaid cuts like the ones the governor has proposed, but they have not said where they might find the money.
Restoring these Medicaid services would be expensive for the state. They cost Louisiana $286 million in state funding, which take up almost all of the extra $302 million in income tax revenue that is expected to be available. But other budget priorities will also be competing for that funding.
Legislators are likely to want some of that money to go toward the TOPS college scholarship program — which needs $233 million to be fully funded — or state-funded hospitals such as University Medical Center in New Orleans, which needs $189 million. District attorneys and sheriffs are also missing millions of dollars in the version of the budget Edwards has submitted.
If these proposed Medicaid cuts took place, they could lead to legal trouble for the state. Some would trigger a lawsuit from advocates for people with disabilities because the state may not be able to eliminate these services under federal laws that protect the disabled.
“It is case where, if we are forced to go down this path, I do expect the (health) department to be in federal court on some of these issues,” Reynolds said.
In addition to sending out notices to Medicaid recipients, Louisiana will also have to start the process in early May to get the federal government’s approval to eliminate the programs.