www.debtwire.

com
Louisianas hand could be forced in Medicaid expansion fight
By Joseph Lipovich
17-Jul-15 12:38
Louisiana could vote to expand Medicaid under the Affordable Care Act (ACA) as soon as next years
legislative session, said two policy analysts, which could make it the first Republican-led southern state to
take the step.
Term limits will bring Republican Governor Bobby Jindals term to a close. Some believe new blood in the
governors mansion as well as success stories in nearby Democratic-led Kentucky and Arkansas may
make Medicaid expansion under so-called Obamacare in the conservative state a reality by the time the
legislative session closes in June 2016, said Steve Spires, a senior policy analyst for the Louisiana
Budget Project and Jesse Cross-Call, policy analyst at the Center on Budget and Policy Priorities.
Jindal has made it very clearthat he would block expansion at every turn, while gubernatorial
candidates up for election on 24 October have been more open to the idea, Spires said. The longer that
we see states in the South have budget savings, [the harder] it will be to stop.
The move could decrease uncompensated care costs in hospitals such as Womans Hospital and
the Louisiana State University Health System. And while hospitals have received some recent relief,
an amendment passed in 2014 designed to allowed hospitals to draw more federal Medicaid funding
through a stabilization fund, with a resolution to the amendments passed on 26 May. This was seen as
a "band-aid" solution by Deborah Chollet, who is a senior fellow at Mathematica Policy Research.
This is more of a bird-in-the-hand situation, Chollet said. If expansion is off the table, and this is your
offer, you take it. This is just a bandage, and it buys them time.
Lawmakers in Louisiana had to close a USD 1.6bn, or 6.6%, budget gap during the last session,
according to Jindals budget summary. And that was after the state, along with Virginia, were the only two
in the region to pass mid-year budget cuts last year, according to a report by the National Association of
State Budget Officers. The budget pressure has been stressed by falling oil prices and lower income tax
revenue collections, Hogan said.
Louisianas hospitals, like those in other states, are also likely to increasingly come under pressure
because of the phase out of federal disproportionate share hospital payments, which the ACA assumes
will be replaced with greater Medicaid coverage, said Erwin. The phase-out could make Medicaid
expansion a do or die situation, he said.
Spires said that the resolution passed on 26 May allowed the Department of Health and Hospitals to
assess a provider fee starting FY17, provided that the state expands Medicaid and the assessment
receives approval from the Joint Committee on the Budget. Spires says that this bodes well for the
prospects of Medicaid expansion.
The amendments and resolutions passed through the legislature pretty smoothly, Spires said. This sets
up the framework for how Medicaid expansion would work.
New governor could open the door to Medicaid expansion
Still, roadblocks remain. Robert Hogan, a professor of political science at Louisiana State University said
that legislative opposition to the expansion seen as support of the much-despised Obamacare would
make the battle difficult, though he acknowledged that passage next term is within the realm of
possibility.

330 Hudson Street, 4th Floor, New York, NY 10013 USA tel: +1 212 686 5277 www.debtwire.com

By contrast, the three major Republican candidates up for the October gubernatorial election - US
Senator David Vitter, state Public Service Commissioner Scott Angelle and Lieutenant Governor Jay
Dardenne - have all indicated that they are more open to discussing the prospect of healthcare expansion
if elected in the October election, said Spires.
But theyve only just cracked the door. Vitter told KPEL radio that he wouldnt close the door on a
Medicaid expansion, but only if other criteria were met, including a core reform of the broken system.
Republican Public Service Commissioner Scott Angelle told KPEL that there needed to be a serious
conversation about coverage expansion, but believed that it should use a market-based principle rather
than traditional Medicaid expansion, an alternative thats been discussed other states such as Utah and
Texas. Dardenne told the Advocate that although he would support a repeal of Obamacare, since it is the
law of the land the state should consider seeking a waiver to draw down additional federal funds.
None of the candidates responded to requests to comment.
A USD 60.2m tranche of 6% Series 2010A Louisiana Local Government Environmental Facilities and
Community Development Authority Hospital revenue bonds backed by Womans Hospital due in
2044 last traded on odd lots on 14 July at 112.133 yielding 3.437% according to Electronic Municipal
Market Access (EMMA). Moodys Investors Service last rated the bonds A3 on 18 June. Standard and
Poors last rated the bonds A on 15 April. Fitch Ratings does not rate the bonds.
A USD 50,000 tranche of 2% Board Of Supervisors of Louisiana State University and Agricultural
and Mechanical College revenue refunding bonds backed by the LSU Health Sciences Center last
traded on odd lots in August 2013 at 101.559 yielding 1.4% according to the EMMA. Moodys last rated
the bonds A3 in August 2013. S&P rated the bonds AA in August 2013. Fitch does not rate the bonds.
LSU and Womans did not respond to requests for comments.

330 Hudson Street, 4th Floor, New York, NY 10013 USA tel: +1 212 686 5277 www.debtwire.com