May 5, 2017 10:23 AM

Cutting $234 million in LDH funding could lead to deep cuts in programs

When the House approved HB1 on Thursday afternoon, it included a $234 million cut in support for programs administered by the Louisiana Department of Health. Gov. John Bel Edwards and the department say the deep cut jeopardizes essential health services because Medicaid, which provides funding for most of those programs, is jointly funded by the state and the federal governments.

The LDH budget as it emerged from the House Appropriations Committee on Monday was $12.6 billion dollars, down from the $12.8 billion total for the current fiscal year. Total direct General Fund appropriations for LDH in the current budget is $2.1 billion. The federal government's share of the LDH budget is $9.3 billion. A combination of dedicated funds, fees and other state funds also go to LDH.

Robert Johhannessen, LDH's communications director, says in an email to The Independent that the cut to LDH funding is far deeper than the budget figure indicates.

"In Louisiana, the general ratio is that the state pays 38 percent of the cost of Medicaid while the feds cover 62 percent," Johhannessen explains. "Thus for every state dollar that is reduced, the Medicaid program loses two more dollars. Therefore, a funding reduction to LDH of $235 million in state General Fund dollars equates to an almost three-quarters of a billion dollar overall spending reduction to Medicaid-funded programs."

A reduction of that magnitude will send significant ripples across the state, according to Jan Moller of the Louisiana Budget Project.

"So, when the Legislature cuts $235 million from Medicaid they are actually taking around $750 million from healthcare services that otherwise would support doctors, hospitals, pharmacies and other providers in every region of the state," Moller says.

Moller points out that the Medicaid expansion program that provides healthcare coverage to working people living just above the poverty line is 95 percent funded by the federal government.

HB1 does not specify where the cuts are to be made, leaving the choices that would need to be made if the cuts stand up to the Edwards administration, which opposes them.

In a Tuesday press conference after the House Appropriations Committee voted to make the cut but two days prior to the vote of the full House, Edwards administration leaders outlined the kinds of cuts that would result from reductions of that magnitude being made in LDH's budget.

Included on the list of programs that would be jeopardized by the funding cut were prescription drug coverage for 600,000 Louisiana adults (including disabled adults), elimination of more than 120 psychiatric beds across South Louisiana, eliminating the state's public health program to combat the insect-borne Zika virus, ending school based health programs, and deep staff cuts in the department, which would reduce support for other programs.

During the floor debate on the LDH cuts and a $69.8 million cut in funding for the Department of Children and Family Services, Democrats like Rep. Sam Jones of Franklin and Rep. Malinda White of Bogalusa argued that staffing cuts amount to reductions in services. The House Republican majority was not moved, repeatedly rejecting amendments that would have restored funding for now vacant staff positions in both departments.

In a statement issued on Thursday after the House voted to approve HB1 and the cuts, Edwards attacked the House budget:
Their budget guts health care, children's services and veterans services to levels that endanger the health and welfare of the people of Louisiana. When politicians craft policies without the input of experts in the field, you know you're getting a bad deal, and that's how this budget was drafted. It's time to craft a bipartisan, sustainable solution for Louisiana. I look forward to working with the Senate to craft a responsible budget that we're adequately funding the people's priorities.
HB1 will now go to the Senate where it will be referred to the Senate Finance Committee, which is chaired by Ville Platte Sen. Eric LaFleur. House leaders say they got the bill to the Senate earlier this year than in previous years, giving the upper chamber more time to work on it.

One notable aspect of this year's budget action in the House has been the new degree of discipline over the process when compared to 2016. In 2016, Rep. Cameron Henry's first year as Appropriations Chair, the budget that emerged from his committee underwent a fairly drastic transformation by way of amendments approved in House floor debate.

On Thursday there was debate, but the only substantive change made to HB1 was to strip an attempt by Rep. Valerie Hodges to divert $190 million in federal disaster relief money targeted for homeowners to fund a flood control project in East Baton Rouge Parish.

The discipline in the House this year indicates that the Republican majority under the leadership of Rep. Lance Harris of Alexandria has tightened its grip on control of the House and the various levers of power there. The extent of that control will truly be tested in the final weeks of the session when the Senate completes its work on HB1 and sends what is likely to be a sharply revised bill back to the House for concurrence.

A conference committee settlement of the differences in the two version appears certain, although what that might look like is not in any way clear now. It remains to be seen how much the House can impose its brand of fiscal discipline on the Senate, if at all.

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