Approximately $1.1 billion in Medicaid funding for Louisiana is under threat because of provisions included in the federal tax and budget megabill. All states except for Alaska use a financing tool called provider taxes to help fund their Medicaid programs. The Louisiana Legislature increased the state’s hospital assessment rates last year. But as The Times-Picayune | Baton Rouge Advocate’s Meghan Friedmann explains, the timing of that move puts the new funding in jeopardy:
That’s because the One Big Beautiful Bill Act prevented any new provider taxes or provider tax increases from receiving matching federal funds. … Louisiana passed its tax increase before Trump signed the law. But the Centers for Medicaid & Medicare Services has since issued guidance suggesting the increase may have been enacted too close to the deadline to be considered a preexisting tax, meaning any revenue collected through it might not be eligible for a match, [Invest in Louisiana Health Care Policy Analyst Annika] Vanderspek said. Because a final rule has not been issued, it is unclear whether that will come to pass.
The megabill also poses longer-term funding threats to Louisiana’s Medicaid program:
[Leo] Cuello, the Georgetown public policy professor, said the bill lowered the cap on match-eligible provider tax rates from 6% to 3.5% in states that have expansion populations — which includes Louisiana. … If the law stands, some states will have to start lowering their provider tax rates in 2027, meaning they could lose existing revenue after already losing a mechanism for generating additional revenue. “The state is going to struggle to figure out how to make this math, math,” said Cuello. “Losing the provider tax is a long-term structural funding nightmare.”
Louisiana will also be required to pay more administrative costs for the Supplemental Nutrition Assistance Program:
The change, which takes effect several months into the coming fiscal year, is expected to cost Louisiana $42.3 million during the next budget cycle, according to the Louisiana Department of Health. That cost will increase to about $56 million the following year, when it will apply to the full year, the agency said.
Dismantling DCFS
State Sen. Regina Barrow has filed legislation to dismantle the Department of Children and Family Services and transfer its duties to other state agencies. The state’s child welfare agency has come under intense scrutiny in recent years because of instances where it failed to follow up on reports of neglect and abuse that later led to child deaths. WBRZ’s Halle Jefferson reports:
The proposed law would transfer child support enforcement to Louisiana Works and child welfare to the Department of Health. “I have attended countless oversight hearings and meetings, hearing promises of reform, yet our children continue to fall through the cracks and suffer preventable death,” Barrow said.
Crawfish industry struggles due to lack of foreign workers
Louisiana’s crawfish industry is struggling because of the Trump administration’s move to severely limit the number of visas for foreign guest workers. Seasonal foreign workers come to the state every year to work in plants that process the popular crustaceans. The Louisiana Illuminator’s Julie O’Donoghue reports that this year is different, and state Agriculture Commissioner Mike Strain isn’t pleased:
Strain said the U.S. Department of Homeland Security stopped issuing visas for foreign workers for seasonal jobs before crawfish processing plants were able to hire all their laborers. The businesses applied for the visas in November as they normally do, but their applications were denied. They were told they should have waited until January to send in their requests, Strain said. … Strain said some people who were denied work visas this year have come to Louisiana regularly for seasonal jobs for over a decade without any problems.
Strain has personally reached out to members of the Trump administration, to no avail. And Gov. Jeff Landry is crawfishing, despite his close relationship with Homeland Security Secretary Kristi Noem:
“The Department of Homeland Security has not fulfilled the amount of visas that they would normally do. That’s a decision that they make up there,” Landry said at a press conference held Tuesday afternoon. “We have six members of Congress and two U.S. senators, and immigration is something that is right in their bailiwick. That is their lane to drive.”
Pushback to rural health fund plans
The federal megabill included a $50 billion fund aimed at addressing rural health issues. But now many state lawmakers across the country are pushing back against their states’ plans for how to use the new dollars. Arielle Zionts and Sarah Jane Tribble of KFF Health News report:
The recent pushback reflects “tension” over state plans — which were approved by the federal government — from state lawmakers and health leaders who want more input amid tight deadlines, said Carrie Cochran-McClain, chief policy officer of the National Rural Health Association, the largest organization representing rural hospitals and clinics. … State lawmakers want to have a say, she said, in “how the funding is being allocated — how the implementation will go.”
The funding from the Rural Health Transformation Program won’t be enough to offset the new law’s estimated $137 billion cut to federal Medicaid spending in rural areas over the next decade:
But the rural health program tilts toward seeding innovative projects and technologies, not shoring up rural hospital finances. States can use only up to 15% of their funding to pay providers for patient care. That hasn’t stopped some federal officials and lawmakers from framing the program as a rural hospital rescue. … Now that applications have been approved, some state Republican lawmakers — who are more likely to represent rural voters than Democrats are — and hospital associations are upset that the political rhetoric doesn’t match what they see.
Number of the Day
$140 million – Amount of money Louisiana will spend on 19 sites across the state to attract new businesses. (Source: The Advocate)