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Study confirms Medicaid expansion costs LA more

Earlier this week, Louisiana’s Department of Health and Hospitals issued an updated report concerning eligibility expansion under the Patient Protection and Affordable Care Act (“Obamacare”). Utilized changed standards over the past three years in the analysis, while more optimistic than the report issued then, it still points to the wisdom of rejection of expansion.

According to it, in the scenario most closely matching the existing policy environment, the state is expected to spend from $197 million to $367 million less over that decade. In another scenario, which depends upon a very unrealistic rise in provider rates of 90-100 percent, costs were $1.7 billion greater over the decade. However, importantly any “savings” realized occur only in the first six years of the continued reimbursement rate and from thereon out the state pays increasingly more.

Besides a few procedural rulings that have changed since the law’s passage and its imperfectly reasoned reaffirmation by the U.S. Supreme Court, the most prominent factor in adjusting the estimates ironically has been the state’s implementation of its Bayou Health plan, a premium support plan with a substantial managed capitation program for those currently eligible for Medicaid that saved the state about $136 million (about 10.88 cents per enrollee) in its initial year of operation. In essence, it has made it cheaper to enroll incremental members into Medicaid and without that, given the projected number of enrollees under expansion in the realistic scenario (577,000) compared to existing enrollments (1.25 million), another $63 million annually would be saved or almost twice the optimistic realistic scenario.


Report confirms swap's value, but it might need altering

The Gov. Bobby Jindal Administration was back in front of the most important legislative committee yesterday to the fate of the passage of its tax swap plan, energized by a new study that demonstrates the utility of the idea. But as the clock continues to tick to the start of the session, some major modifications may be in order despite the affirmation of the plan’s desirability.

The proposal features increasing sales taxes for existing businesses that must pay it by 1.88 percent, adding new businesses in the service sector paying 5.88 percent, eliminating half of mineral resources exemptions, increasing the cigarette tax, and eliminating all income taxes. The House Ways and Means Committee heard about how the plan would shift more taxation to business by an increase in the sales tax, theoretically by having to absorb some of it, and also would be hurt by depressed demand by passing some to taxpayers. However, with no income taxes paid by either businesses or consumers, individuals should pay an overall lower rate and the overall tax blow on businesses would be softened. In addition, individuals not now paying income taxes would receive rebates to make up for increased sales taxes presumably paid.

In short, the plan is designed to increase the overall burden on businesses, but individuals including business owners would have reduced tax burdens, while only mineral extractors and smokers definitely would see higher taxes. The benefit is this would create a more efficient fiscal structure that does a better job of collecting taxes and spurs economic growth better than the current system – in theory. That conclusion was verified by the report put out by Louisiana’s Pelican Institute of Public Policy and the Beacon Hill Institute of Suffolk University.


Pique, not good sense, behind electing superintendent

Why not? If you’re a Louisiana legislator and have a grudge, why not salve that bruised ego by trying to foist on the state a proven bad idea?

That appears to be the motivation and agenda by state Sen. Bob Kostelka with his introduction of SB 41 that would make the state superintendent of schools an elective position, as it had been prior to 1988. This would be in addition to the Board of Elementary and Secondary Education, which currently chooses this officer, eight of whose members are elected from single-member districts and another three appointed by the governor.

Kostelka has managed to get himself on the outs with the Gov. Bobby Jindal Administration, which has led to his demotion in the Senate’s power hierarchy such as being stripped of a committee chairmanship, by steadfastly refusing to go along with most of Jindal’s reform agenda. This includes in education, where Jindal and most of the elected members of BESE agree on policy.


Investigation excuse to get out of unfavorable contract?

The Gov. Bobby Jindal Administration better be pretty sure of its information by cancelling a state contract, or else what looks to be a tempest in a teapot might cost the state some real money. And if there are any political reasons behind it, they’re likely to disappoint equally Jindal-haters and those loving lurid stories of rampant government corruption.

Last week, the state took the unusual step of terminating this contract to process Medicaid claims, citing recently-revealed state and federal investigations into the process of how the contract was won. Controversy had followed the awarding of the contract, which had led to its appeal and a declaration by Atty. Gen. Buddy Caldwell’s office that it should not have been awarded to winner CNSI.

Several aspects initially raised cause for concern. Department of Health and Hospitals Secretary Bruce Greenstein years ago had worked for CNSI and in the initial phases of the process had made changes to the original contract parameters that would allow CNSI to qualify for bidding. He also met with former colleagues once prior to awarding. But no apparent impropriety was attached to this: Greenstein has no known current connection to the company, the reconfiguring of parameters opened eligibility to a number of firms, and other competing firms had no complaints about the restatement at the time.