Steve Gardes
Gov. John Bel Edwards just released an editorial titled “Louisiana is Making Progress,” and states in part that “by every metric, Medicaid Expansion was the right choice for Louisiana” as it has saved the state over $300 million, grown the economy by generating $3.6 billion of economic activity, and created 19,000 jobs. WOW!! Who knew we could reap these huge benefits by adding 470,000 residents to our Medicaid rolls. On top of this, the governor also noted that the Trump Administration praised Louisiana’s efforts to root out fraud within the Medicaid system. Say what??
Suffice it to say that there are many critics that disagree strongly with the governor’s view of Medicaid expansion. A recent article by Bethany Blankley with Watchdog.org titled “Critics: Edwards Claim that Medicaid Expansions Created Jobs, Economic Growth is Faulty,” looks behind the curtain and sees something much different. Apparently the governor is relying on a report that was commissioned by the Louisiana Department of Health (LDH) and prepared by LSU professor Dr. Jim Richardson, who argues that the infusion of federal money into the state for Medicaid created an economic stimulus to the state’s economy.
However, Blankley spoke to both The Pelican Institute (Louisiana’s leading think tank) and Truth In Accounting (a national research firm) who said that Dr. Richardson’s theory is “factually inaccurate as he only assessed Medicaid-specific dollars and ignored the fact that”:
— 20 percent of those enrolling in Medicaid Expansion gave up their private health insurance paid by their employer, so the “supposedly ‘new’ federal subsidy dollars would instead only supplant existing coverage subsidies provided by their employer”;
— 77,000 residents left the Obamacare exchanges where they received $9,000 per year exchange subsidies, and many switched to Medicaid where the state only received approximately $6,000 per year federal match dollars; therefore their Medicaid coverage may have actually cost Louisiana federal dollars;
— Louisiana may have lost jobs as the CBO has reported that Obamacare was in fact a disincentive to work because many citizens who worked did not qualify for Medicaid, and therefore had to pay costly premiums and deductibles for exchange coverage;
— “looking across the 50 states, we see that states with higher shares of Medicaid enrollment have higher taxpayer burdens, and slower economic growth (Louisiana ranks near the bottom third of states with taxpayer burdens, and has had sub-par performance in GDP per capita in recent years).”
Since the Richardson report does not consider these various trade-offs or repercussions, his conclusions – and therefore the governor’s narrative, are factually distorted.
On top of all this is the distorted inference that the Edwards Administration is working hard to root out Medicaid fraud. To the contrary, the governor and State Senate Democrats took legislative steps in the last session to protect Medicaid fraud by killing two bills (HB 163 and HB 480) that would give the State Legislative Auditor and Attorney General (the only two agencies chomping at the bit to attack Medicaid Recipient Fraud) the tools and authorization to go after Medicaid Recipient Fraud — and instead passed SB 119 that would only allow LDH access to tax data in verifying Medicaid eligibility (and specifically prohibited the Legislative Auditor and Attorney General from access to the tax data). LDH is the same department who referred only eight cases of fraud (out of 1.5 million Medicaid beneficiaries) for prosecution — and who the governor’s own executive counsel said “does not appear to be on the same team” when it comes to fighting Medicaid fraud. Furthermore, when the House requested that Medicaid fraud legislation be included in the 3rd Special Session in June, the governor denied the request. If the Trump Administration was praising Louisiana for its Medicaid fraud efforts, it had to be the efforts of the Attorney General and Legislative Auditor that they were praising.
One can only conclude that by any metric, Medicaid expansion has put an extra burden on Louisiana taxpayers in 2017 when we only paid 5 percent of the cost; in 2020 we will pay 20 percent of the cost. Since “we taxpayers” also pay federal income taxes, that extra burden could become quite heavy.
Steve Gardes is a certified public accountant (CPA) and certified valuation analyst (CVA) with over 40 years of public accounting experience.