La. avoids $566 million loss of Medicaid money

Louisiana has dodged the threat of losing more than half a billion dollars in federal Medicaid money next year, Sen. Mary Landrieu and her brother, New Orleans Mayor Mitch Landrieu, announced Wednesday.

The Landrieus, during a conference call with reporters, said the Obama administration has agreed to spare the state from the estimated loss of $566 million during the 2013 federal fiscal year.

The decision resolves a disagreement over a provision that Mary Landrieu added to the federal healthcare overhaul law to protect Louisiana from the loss.

The senator says she based her provision on the premise that the federal formula for Medicaid match rates punished Louisiana because it factored in rebuilding money awarded after hurricanes Katrina and Rita in 2005.

Federal officials ultimately agreed with the Landrieus that the provision also should apply to the fiscal year starting in October 2012.

"It really is a tremendous decision that was made in our favor," Mary Landrieu said.

Mitch Landrieu said Health and Human Services Secretary Kathleen Sebelius informed him of the decision Wednesday morning. A spokesman for the agency didn't immediately respond to an email seeking comment.

Mitch Landrieu said he doesn't know if the decision will help Louisiana beyond the 2013 fiscal year.

"We'll certainly argue that we are entitled to if we fall within the parameters of the law," he said.

Mary Landrieu said the decision also sets a good precedent for other states afflicted by major disasters.

"We fixed it now — not just for us (but) for if this happens for anyone in the future," she added.

Critics of the healthcare overhaul had suggested that the Obama administration used the provision to secure Mary Landrieu's support for the law.

"It was a pretty sound policy decision that you got vilified for," her brother said.