lbp rationale for_medicaid_expansion_in_louisiana
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Provides independent, nonpartisan research andanalysis of public policy issues and their impact on low- and moderate-income Louisiana families
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Health reform is needed
• 1 in 4 non-elderly adults in Louisiana is uninsured
• LA has some of the strictest Medicaid eligibility for adults in the nation, income limit around 15 percent FPL —or less than $3,000 a year for a family of three
• Employer-sponsored insurance coverage has been declining for years
• Only 5 percent of children are uninsured due to success of LaCHIP (we know that Medicaid expansions work)
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150%
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250%
Eligibility is generous for children and pregnant women. Could be expanded for adults in 2014
Current Eligibilty (as % of Federal Poverty Level)
2014 Expansion up to 133% FPL
Medicaid expansion eligibility:$14,850 for an individual$25,390 for a family of three
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Key Findings from Our Research
• Of estimated 330,000 uninsured people who would qualify for Medicaid expansion, the majority—200,000—are working
• Major coverage gains in important economic sectors: construction, entertainment/tourism and retail
• Other results: major gains among health care and child care employees
Where Do Uninsured Louisianans Who Could Gain Medicaid Coverage Work?
Restaurants and Food Service 33,900
Construction 24,300
Grocery Stores 8,400
Nursing Homes 6,300
Hotels and Motels 6,100
Landscaping Services 6,000
Professional Building Services 4,450
Elementary and Secondary Schools 4,400
Home Health Care Providers 4,100
Hospitals 4,050
Medicaid Expansion is Critical for Low-Income Working People
Occupations w/ Average Wages That Could Make a Family Eligible for Medicaid Expansion
(Source: Louisiana Workforce Commission)
Occupation Avg. Hourly Wage Annual Full Time Wage
Child Care Worker $9.00 $18,730
Construction Laborer $12.80 $26,600
Hairdresser $12.00 $24,920
Home Health Aide $9.30 $19,380
Hotel Desk Clerk $9.40 $19,530
Landscaper $10.85 $22,570
Maid/Housekeeper $8.80 $18,340
Restaurant Cook $10.60 $22,060
Retail Salesperson $11.10 $23,110
Waiter/Waitress $9.10 $18,990
Medicaid Expansion is Critical for Low-Income Working People
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Expansion = More Health Security
• More than 50,000 uninsured Louisianans who would be expansion eligible were working in the last few years—many are unemployed due to the still weak economy.
2007
2008
2009
2010
2011
2012
0.01.02.03.04.05.06.07.08.09.0
Louisiana's Unemployment Rate
2008 2009 2010 2011630,000
650,000
670,000
690,000
710,000
730,000
750,000
Number of Uninsured Adults
Medicaid expansion will benefit Louisianans in every parish
Shreveport
Lake Charles
Alexandria
Lafayette
Baton Rouge
New Orleans
Monroe
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Medicaid Expansion is a GOOD DEAL!
• Federal government will pay 100% of the cost for the first three years
• State will slowly chip in after that, but never have to pay more than 10% of the cost
• By comparison, today the feds pay for around 65% of Louisiana’s Medicaid program, with the state responsible for 35%
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State cost has been exaggerated
• Jindal administration is often quoted saying expansion will cost $3.7 billion over 10 years
• More credible estimates closer to $1 billion
• Actual cost is much lower, as there will be offsetting savings due to reform
• In return, Louisiana will receive $15.8 billion in new federal money through 2022
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We are already paying
• Louisiana already spends hundreds of millions each year on health care for the uninsured. So do private and non-profit providers
• Families and businesses with private insurance pay higher premiums due to “cost shifting”
• Reform will improve the health care system and result in some savings that can be used to help cover the cost of Medicaid expansion
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Positive Health Impacts
• Louisiana ranks near the bottom on national health indicators
• Medicaid expansion would improve access to care, reduce financial stress on families and result in better overall well-being
• New research shows that Medicaid expansions even reduce state mortality rates
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Positive Economic Impacts
• Medicaid currently supports an estimated 50,000 health-care jobs and thousands more “indirect” jobs across the state
• Influx of new federal health-care dollars will stimulate state economy, create jobs and generate additional state revenue
• Expansion means a more competitive market for health care services
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Direct Benefits for Employers
• Healthier workforce is a more productive workforce
• Access to insurance results in fewer missed days of work and better health management for employees
• Less “job lock” means more efficient labor market and better employees
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Keeping the cost in perspective
• Louisiana already pays for high cost care for the uninsured
• Reform will bring significant health care savings elsewhere in the state budget that can be used to pay for most of Medicaid expansion
• Medicaid expansion will also result in new economic activity that will generate additional state revenues
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Favorable timeline for Louisiana
• The state won’t have to pay ANY expansion costs for the first 3 years. By 2017:
• State revenues will likely have increased due to economic growth
• State will have a clear idea of the costs and savings and can plan accordingly
• The state always reserves the right to “opt out” in the future if needed
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What is the alternative?
• Dollars that the state currently use to fund public hospitals and care for the uninsured are going away
• Without federal Medicaid expansion dollars, providers may not get paid, clinics could close and patients will be harmed
• Accepting Medicaid expansion revenue is the responsible path forward
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We can’t afford to NOT expand Medicaid
The need for Medicaid expansion is clear. Without expansion:
• Poor health outcomes will continue to affect our workforce and diminish productivity
• High cost of uninsured care will increase financial pressure on the state and health care providers
• Continued “cost shifting” will affect those with private insurance