Medicaid’s role in small towns and rural areas

Medicaid plays a larger role in providing health coverage to people living in small towns and rural communities in Louisiana than it does in metropolitan areas, a trend that is particularly striking among children, according to an extensive analysis by the Georgetown University Center for Children and Families.

“Medicaid is critically important to the families and health care systems in rural Louisiana,” Invest in Louisiana Senior Policy Advisor Courtney Foster said.  “Across the state – but especially in rural areas – Medicaid protects families from excessive medical debt and covers a large share of residents in nursing homes, births, and maternal care. Medicaid funding also keeps our rural hospitals running – many of these institutions would cease to exist without federal funding, leaving thousands of Louisianians without a way to access care.”

States face transportation budget issues

State gasoline taxes are losing value due to inflation, vehicles becoming more fuel efficient and the advent of electric vehicles. States, including Louisiana, are trying to compensate by charging drivers of EVs an annual fee or by the number of miles driven. Pew’s team explains how dwindling gas tax revenue can create transportation budget issues for states: 

The future of the gas tax isn’t just a transportation funding challenge; shortfalls in gas tax revenue and rising construction costs affect a state’s overall fiscal health. During prior recessionary periods, for example, lawmakers tapped transportation funds to help solve budget deficits—an option that may now be out of reach. On the other end of the spectrum, weak gas-tax revenue in Colorado has led policymakers to siphon more than $1 billion from the general fund over the past five years to pay for transportation projects.

In 2021, Louisiana lawmakers approved legislation that devotes most revenue from vehicle sales taxes to transportation projects. But the Legislature recently paused that decision in order to pay for costly tax cuts that mostly benefit the wealthy and large corporations. 

GOP considers gimmick to not count Trump tax cuts

The price tag of extending President-elect Donald Trump’s 2017 tax law – $4.6 trillion added to the national debt over the next decade – is causing heartburn for many fiscal conservatives. While Republicans could use budget cuts to offset some of the massive cost, many of the spending reductions, such as capping Medicare payments, would be unpopular with the public. The Washington Post’s Jacob Bogage explains how GOP leaders are considering a gimmick known as “current policy” baseline to not count the cost of the tax cuts in budget math: 

Because the tax cuts are already in place, some Republicans argue that a new bill to extend them would not incur additional costs to the U.S. Treasury. … The more conventional approach for 10-year budget estimates is to use a “current law” baseline. Under current law, federal revenue is expected to go way up next year when the tax cuts expire. So a bill to extend the tax cuts would rob the Treasury of that big burst of new revenue.“ Current policy baseline, I consider it to be a made-up term — made up to avoid the difficulty of the fiscal impact,” said Rep. David Schweikert (R-Arizona), who chairs the bicameral Joint Economic Committee, which oversees economic policy.

Company makes millions off hospital program for poor

The federal 340B program allows hospitals and clinics that serve large populations of low-income and uninsured patients to purchase drugs from pharmaceutical companies at discounted prices. The hospitals are then allowed to charge standard prices and retain the profits. The New York Times’ Ellen Gabler explains why the program has deviated from its original goal: 

The intention behind the program was for a small number of safety-net providers to have access to affordable drugs and be able to expand their care for needy patients. But instead, the program has exploded: Now, more than half of nonprofit hospitals in the United States take part. While some providers say it has helped keep their doors open, others — especially large nonprofit health systems — have been accused of maximizing payouts and swallowing the profits. The program’s escalation has driven up health care costs for employers, patients and taxpayers, studies show.

Gabler explains how Apexus, a private company that has managed 340B for the last 20 years, has manipulated the program to create huge profits:

Twenty years ago, the federal government chose Apexus to manage what was then a small program, negotiating with drug distributors and manufacturers to secure better prices and access to medications. But Apexus is allowed to collect a fee for almost every drug sold under the program, giving the company an incentive to help hospitals and clinics capture as many prescriptions as possible:

• Its “purchasing optimization team” shows hospitals how they can make more money by buying different drugs.
• A certification program and an Apexus-run “university” trains providers in boosting earnings.
• Apexus employees give advice that broadly interprets the rules of the program so hospitals can claim additional patients and drugs.

Apexus was on track to double its revenue from 2018 to 2022, projecting $227 million that year, according to a 2022 internal memo written for the directors of Apexus’ parent corporation and reviewed by The Times.

Number of the Day

57.7% – Percentage of children in Louisiana small towns and rural areas who rely on Medicaid/Children’s Health Insurance Program (CHIP) for health coverage, compared to about 52 percent in metro areas of the state. (Source: Georgetown University Center for Children and Families)