Before the ink was dry on Gov. Bobby Jindal's budget cuts Friday, State Treasurer John Kennedy was sharing his thoughts on saving Medicaid.
"Since the 1960s, we've had a program called Medicare and one called Medicaid," Kennedy told a group of officials and business persons at Exacta Inn. "Medicare is for the elderly. Medicaid is for low income people."
Medicaid, he explained is a state/federal program.
"Every state has a Medicaid program and every state is in charge of administering it under rules issued by the federal government," he said. "The state puts up a third of the money, while the federal government puts up two-thirds of the money, so they want to have a lot of say in what is going on."
Kennedy said of the 4.5 million people in Louisiana 1.3 million are on Medicaid.
In addition, he said, there are an additional 800,000 people that make "a little too much money" to be on Medicaid.
"But we get extra money from the federal government to help them, as well," he said.
Kennedy blames unemployment following devastating hurricanes for the large number of people in the Medicaid program.
And while the federal government offered the state some monetary help, aid came to an end the first week of July.
"We have got to reduce our Medicaid budget of $7.4 billion by about $856 million," Kennedy said. "Our Department of Health and Hospitals was not ready, even though we had been told not to get used to this money. We didn't have a plan."
The ones affected, however, do not include those on Medicaid only, he said.
"It impacts every person in this state," Kennedy said. "No matter what government does, those two million folks are not going to stop getting sick. And when they get sick, they are going to go to our hospitals, our emergency rooms and our doctors, and they are going to be treated.
"We have a law in America that says if you are too poor to get sick, we're not going to let you die," he continued. "We will give you medical (treatment)."
Kennedy said he agrees with the law.
"I think it's abused, but I like it because it separates us from a lot of other countries," he said. "If these folks who don't have insurance go to the hospital and get treated, they might get that treatment for free. But there's no such thing as a free ride. The hospital can only treat them because they pass the cost on to the rest of us, and our insurance premiums go up."
Gov. Jindal, Kennedy explained, planned to take the state's 10 charity hospitals, which treat most of the uninsured and Medicaid patients, and lease, sell or turn them over to non-state hospitals.
The LSU Board of Supervisors agreed Friday to privatize the operations of its public hospitals in New Orleans, Houma and Lafayette that provide safety net care for the uninsured and help train medical students.
Management of the hospitals and their outpatient clinics will be turned over to nonprofit corporations that run private hospitals in the regions, under plans pushed by Jindal's administration.
Kennedy said that while the state learned in July that it would have to cut $860 million from the Medicaid budget, $788 million was added three weeks earlier.
"Why isn't the deficit $860 million minus $788 – which is about 68 million dollars?" he asked. "I've asked DHH about this and I'm still waiting for the answer."
State Sen. Robert Adley said there are several reasons why the money was added to the budget just before the end of the fiscal year.
"This growth of $789 million between fiscal years is due to a variety of costs," said Adley, listing those for Kennedy.
n $418 million to address a recurring structural deficit in the Medicaid program that stems from normal utilization of services and the actual costs of providing those services.
n $161 million to fully fund the Louisiana Behavior Health Partnership, an effort to restructure and improve the provision of mental health and addictive disorders services while maximizing the federal funding of such services.
n $98 million to fund 52 weekly payments to providers in Fiscal Year 2013 as only 50 weekly payments were made in Fiscal Year 2012 as a result of the department implementing a greater degree of scrutiny in the progressing of claims payments.
n $49 million to specifically fund increases in pharmaceutical goods and services.
n $29 million to fund a federally-mandated increase in reimbursement rates paid to primary care providers.
n $26 million to fund the increases in Medicare Part A and B premiums and the "clawback" payment to the federal government for Medicare Part D premiums for Medicaid/Medicare dual eligibles.
n $13 million to capture the projected increase in the federal grant funding for the implementation of electronic medical record systems across the state.
n $11 million for federally-mandated increase in reimbursement rates paid to rural health clinics and federally qualified health centers.
Kennedy said he prefers to work on the Medicaid program, rather than the hospital system.
Using Washington state's Medicaid program as an example, Kennedy said it issued to all hospitals 500 different diagnoses that Medicaid will no longer pay the emergency room to treat, saying it costs five times more to treat a patient in an ER than it does in a private clinic.
"They didn't say they won't treat them, they just said we won't treat them in an emergency room," he said.
Another of Kennedy's ideas to resolve the Medicaid crisis is to require a modest ($2 to $10 co-pay) by all Medicaid patients.
District 10 Rep. Gene Reynolds said Kennedy's ideas are good ones.
"I agree with him on co-pay," Reynolds said. "He's right on target about the emergency room. I think it's something we need to look at, but to get it passed ... that's the key."
Where drugs are concerned, Kennedy would like to see reformation of the state Medicaid Preferred Pharmaceutical Drug List to include the most effective drugs at the lowest price for each illness.
Kennedy also suggested the Louisiana Legislature should make all final policy decisions after a public debate.
"The implementation of these (and other) measures will save enough money immediately to give our governor and legislature the time to craft a health care delivery system that looks like somebody designed it on purpose," he said.