Steve Gardes
EDITORS NOTE: This is the second of a series of articles on the Fiscal Cliff crisis facing Louisiana today.
Louisiana is facing a $1 billion fiscal cliff this July, and our political leaders have yet to provide a solution.
However, the elephant in the room is Medicaid as its cost to the state has increased $1.7 billion per year over the last nine years, and is the main driver of our budgetary problems today. Even more alarming, recent studies indicate that it may increase another $2.7 billion over the next 10 years to over $6 billion per year.
Consider the following:
— Medicaid is a deeply flawed, open-ended welfare program that perversely rewards states that spend more (with no cap). Yet, many doctors and hospitals don’t take Medicaid patients anymore, which pushes Medicaid patients to hospital emergency rooms (the most expensive medical provider in the system);
— Although originally designed in 1965 as a safety net intended for the disabled, poor women and children, Medicaid has today morphed into a welfare program for one in five Americans, one in three Louisianan’s, and now even for illegal immigrants;
— Medicaid is the primary budgetary problem for most states, and for the federal government, as federal outlays are nearly three times higher today than in 2000;
— Medicaid spending is now crowding out other state priorities like education, transportation and public safety;
— Medicaid has exploded to a point where it has become “wildly unsustainable” at both the federal and state levels, and must be dealt with;
— Medicaid, as part of the “Great Society welfare” programs, is also bankrupting America morally as when you connect the dots you see that our government is, in essence, paying our citizens to (a) not work, (b) have babies out of wedlock, and (3) buy opioids and other drugs — and is being used by our political leaders under a political racial spoils system to get re-elected;
— Over 50 years, these “Great Society welfare” programs have resulted in the decimation of the disadvantaged family unit, erosion of moral values, exploding drug addiction, unemployment, social chaos in disadvantaged neighborhoods (think Ferguson, Baltimore, Dallas, New Orleans, Baton Rouge), and yes — now even exploding expulsions in Louisiana pre-K through third-grade schools where there is no respect for authority!
As one can see, Medicaid is a very complex matter that is subject to much political deceit. It has spawned significant chaos throughout the entire American social and financial systems. Accordingly, we will be devoting much attention to Medicaid in future articles in an attempt to find a solution that takes care of the disabled and poor without destroying the family unit.
Steve Gardes is a Certified Public Accountant (CPA) and Certified Valuation Analyst (CVA) with over 40 years of public accounting experience.