(Editor's Note: Between now and the November 6 election, the Press-Herald will examine each of the nine proposed Constitutional Amendments that will appear on the ballot.)
Proposed Amendment 1 on the November 6 ballot aims to protect money meant to help offset increasing nursing home and home healthcare costs for elderly and disabled people.
"What this does is prevent the movement of the money," state representative Gene Reynolds said. "Moving of money from place to place is done a lot. That really emphasizes the point of the need for budget reform and how we put the budget together.
"About 75 percent of it's dedicated," he continued. "There are some things that are not. This is one of the things that's not protected. I think this will go a long way in protecting (the Medicaid Trust Fund)."
According to Public Affairs Research Council of Louisiana (PAR), the Medicaid Trust Fund for the Elderly was established in 2000 using federal matching dollars.
"The state acquired the money for the Medicaid Trust Fund by taking advantage of an ambiguity in the rules governing a federal health care funding program," PAR's guide to the 2012 amendments reads. "That provision allowed states to borrow from private entities and use the money to obtain federal matching funds.
"In Louisiana's case, the state borrowed money on a short-term basis from parish-owned nursing homes to get the federal matching funds," according to the guide. "Louisiana was the last of 29 states to utilize the procedure before the federal rules were tightened and the borrowing practice was stopped. Over the course of two years, the state received about $960 million in federal matching funds."
The statutes which govern the fund place strict restrictions on the use and investment of money in the fund, however the state constitution allows the money to be "swept" into the general fund under certain crisis circumstances and to offset projected budget deficits.
If the amendment passes, the governor and legislature would not be allowed to re-appropriate money from the fund.
According to Par, proponents of the fund argue because the money is federal in origin and has certain requirements on its use that the federal government could demand it be repaid if it is used outside of their requirements.
"In 2010, Louisiana agreed to pay the federal Medicaid agency $122 million to settle claims that the state had violated rules regarding Medicaid payments to public nursing homes," according to the PAR guide. "The settlement money was taken from the Medicaid Trust Fund."
State senator Robert Adley said he supports the amendment for philosophical reasons as well.
"It's no different than (the United States Congress)," he said. "Congress is bad about moving social security money around to keep itself afloat. We shouldn't be doing that.
"We receive money for Medicaid from the federal government," Adley continued. "So if you start using the money for things outside of Medicaid you've got a problem."
According to PAR, Opponents argue that the amendment adds unnecessary complication to an already complicated constitution.
Another argument against is it reduces fiscal flexibility when the state is in a budget crisis.
"Constitutionally prohibiting the use of money in the Medicaid Trust Fund to help alleviate dire budget circumstances also could limit the Legislature's flexibility to address future crises," according to PAR's guide.