There Is Absolutely No Reason Whatsoever To Believe JBE’s Claim The State Is Saving Money On Medicaid

You shouldn’t believe this claim, for a couple of reasons. First, it’s unsupported by documentation, and second, it’s being made by an administration which has been caught in a substantial lie on fiscal matters within the past week.

Not a good look, and not a claim we or anybody else should buy.

Louisiana continues to spend more slowly than expected on Medicaid services, a pace projected to leave the state with $26 million in savings this budget year.

The latest Medicaid forecast, released Tuesday, shows the $12.5 billion program is expected to spend as much as $612 million less than estimated for the financial year that ends June 30.

Most of that money would be unused federal spending authority, not dollars that can be allocated to other state programs.

But the Louisiana Department of Health says $26 million would be a state general fund surplus that could be spent elsewhere, if the trend continues. More than $535 million of the less-than-projected spending is in the Medicaid expansion program that has added 446,000 adults to the government-financed insurance coverage.

Bear in mind, this is a forecast. Nobody in state government has put out an accurate fiscal forecast since we started publishing The Hayride in late 2009. There is zero reason to believe this will be the first one which is true.

After all, the geniuses at the Louisiana Department of Health are the people who forecasted that Louisiana would add 300,000 people to the Medicaid rolls by bringing on the Obamacare Medicaid expansion. So far they’ve added 454,000.

We asked around among a number of state legislators after reports of this forecast surfaced to find out if anyone knew what these numbers were based on, and the responses were lots of fun. Unanimously they told us that getting accurate, understandable numbers from LDH about the state’s costs with respect to Medicaid is simply impossible, and that lack of transparency makes for very little faith in any claims LDH or its secretary Rebekah Gee, make to the legislature.

Which leads us to the second reason you can’t trust anything these people say.

They proved it to us.

A couple of weeks ago during his dog-and-pony show presentation to the Joint Legislative Committee on the Budget, Gov. John Bel Edwards made the claim that he’s cut the state’s budget by some $600 million. It was an amazing moment, for a sitting governor to tell such a bald-faced lie to a legislative committee in public session, but he did it. And when incredulous legislators challenged Edwards’ claim he turned abusive; by now our readers have surely heard about Edwards’ insulting “I can explain it to you but I can’t understand it for you” statement made to Sen. Sharon Hewitt, who is a retired oil company executive with a far better command of a financial statement than Edwards is.

And as was sure as sunrise, the governor’s insulting attitude overlay a thoroughly false claim. Hayride alumnus and Advocate columnist Dan Fagan has done a nice job of exploding the $600 million lie, including in his most recent offering


State spending alone is up more than $1 billion under Edwards. It’s up $5 billion when you include federal money. The governor told Hewitt he can explain his cuts to her, but he can’t understand it for her. Pretty arrogant and bold knowing the house you’re in is built on sand.

Keep in mind Edwards’ bombastic claim of cutting the budget comes just months after his own commissioner of administration, Jay Dardenne, contradicted his boss before a legislative joint budget hearing. Dardenne told the committee he would not use the word “cut” in describing how they dealt with the state budget the first two years of the Edwards administration.

Dardenne also admitted to me the funding for some of the cuts has been restored. Meaning Dardenne and Edwards want us to believe cuts are still cuts even though they are no longer cuts.

But where the governor’s shell game really begins to unravel is with the list of cuts he released to legislators. Not only has funding for many of the imaginary cuts been restored, some of them don’t even come close to anything resembling cuts.

It turns out roughly half of the governor’s $600 million in cuts comes from delaying payments to health providers that care for Medicaid patients. It’s insulting to all of us that the governor would think we’re all so gullible that we would consider delaying a payment a cut — a payment the state will eventually have to make good on. But it gets worse. The state delayed paying Medicaid providers the same $150 million payment for the first two years in office. But Edwards counted the single $150 million delayed payment twice. So half of the governor’s “cuts,” $300 million, come from a single $150 million delayed payment.

This isn’t just a partisan gripe here. Edwards is howling about a fiscal cliff and making another claim – namely that nothing in the state budget can be cut, while proposing a raft of tax increases the fiscal notes on which don’t add up to the budgetary fix he says Louisiana needs. Edwards is demanding that state legislators come up with budget cuts to eliminate his billion-dollar deficit if they don’t like his tax increases, while covering the whole debate in a cloak of fiscal gibberish. Legislators we talk to say they feel like they’re in the dark, they lack access to detailed information on the state’s finances necessary to find the cuts Edwards challenges them to make, they don’t believe his tax increases have been vetted and Edwards is demanding the House’s leadership agree to his program before he calls a special session to pass those tax hikes.

It’s not a reputable way to conduct budget negotiations, or to build trust and rapport with people who got elected just like you did.

So when Edwards’ administration makes the claim that his Medicaid expansion constitutes a fiscal boon for the state, it ought to be treated with a great deal of skepticism. As should anything else he says about Louisiana’s budget.



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