Despite the damage Hurricanes Gustav and Ike caused two months ago, the storms resulted in an unexpected gain for Louisiana, as they accounted for nearly half of a current $100 million surplus in the states Medicaid program.
There are two primary reasons why this years hurricanes gave Medicaid a financial life preserver and led to a one-time surplus of $45.6 million, Alan Levine, secretary for Louisianas Department of Health and Hospitals, said in a letter to Gov. Bobby Jindal; Joel Chaisson, the president of the Louisiana Senate; and Joel Tucker, speaker of the Louisiana House of Representatives. First, about 1.2 million people evacuated southern Louisiana for about a week beginning in late August, which meant there were fewer elective surgeries, doctors visits, and home-care visits. Second, the department did not enroll anyone in its New Opportunities Waiver program for the developmentally disabled from July through September, even though the department had budgeted to fill 2,000 slots. Both factors had a significant effect on expenditures.
Weve had $1.6 billion in growth in Medicaid in the last two years, Levine said in an interview, adding that growth this year totaled about $600 million. During the legislative process, they funded about $550 million of the growth, which created a potential $50 million shortfall. At the time, they knew they were underfunding, so they put language in the bill that said if the secretary projects a deficit, the secretary shall notify the Legislature and propose a plan for reducing expenditures.
Thats what Levine did in September, when he projected an $81 million deficit in the program; however, the estimate was made independent of the effects of the hurricane season. If I waitedand (if) that deficit was real or even biggermy fear was we wouldnt have enough time for the cuts, and the cuts would be draconian, Levine said.
The states joint legislative budget committee also approved a $33.7 million transfer from a disproportionate-share program as well as a $25.2 million redistribution for medical homes, which make up the remainder of the entire $100 million surplus, Levine said in his letter to Jindal, Chaisson and Tucker.