Medicaid expansion hits Deep South

OPELOUSAS, La.—Joshua Guillory, 32, dropped his Obamacare health plan in January after losing his oil plant job. He couldn't afford the premiums any longer.

He still needed treatment, though, for recently diagnosed sleep apnea and the pain from long-standing nerve damage in his leg. He also suffers from obesity and high blood pressure.

After his father told him that he might qualify for Medicaid under Louisiana's newly expanded program, he met with enrollment counselor Tama Stears at the Southwest Louisiana Primary Health Care Center, a federally qualified community health center here. They worked with an agent at HealthCare.Gov and completed his application for Medicaid coverage, which starts July 1.

“That's a blessing,” Guillory said.

He's one of 375,000 low-income adults expected to sign up under the state's expansion, which was ordered in January by new Democratic Gov. John Bel Edwards, who campaigned hard on the Medicaid expansion issue. The previous governor, Republican Bobby Jindal, had blocked expansion.

Louisiana is the 31st state—and the first in the Deep South—to extend Medicaid coverage under the Affordable Care Act to adults with incomes up to 138% of poverty. The expansion, fully supported by the federal government through this year, will be partly paid for in future years by fees levied on Louisiana hospitals, estimated at $27 million in the first year and $120 million by year five.

Edwards predicted four or five other Southern states will follow Louisiana in expanding Medicaid if Hillary Clinton and the Democrats win the November elections. “If it becomes obvious the Affordable Care Act won't be repealed, a number of states will opt into the expansion fairly quickly,” he told a group of reporters in Baton Rouge last week.

Stears said some of her clients have a hard time believing the expansion is actually happening. “A lot of people ask, 'Is it real Medicaid? Will it cover the services I need?' ”

The Edwards administration has succeeded in getting the message out with remarkable speed and effectiveness through hospitals, clinics, health plans and schools. The governor announced last week that more than 200,000 people have signed up since enrollment started June 1.

Expanding Medicaid, he said, was “the easiest big decision I'll ever make” given the state's large uninsured population, poor health status, budget problems, and the burden of uncompensated care on healthcare providers. He overcame the resistance of the Republican-controlled Legislature by stressing that the Medicaid expansion was funded by dollars Louisiana taxpayers already were paying and that were going to other states. “That resonated with conservatives,” he said.

Enacting the expansion may have been the easy part. Now Louisiana policymakers, providers and health plans face major challenges in redesigning a largely out-of-date healthcare delivery system that still relies heavily on fee-for-service payment, and in improving health behaviors in one of the nation's poorest and sickest states. Everyone acknowledges it will be difficult to ensure that patients in all parts of this largely rural state have access to primary, specialty and behavioral care, and to get them to seek care in appropriate settings rather than going to hospital emergency rooms.

The most immediate roadblock to the newly covered getting adequate care is the state's nearly $600 million budget shortfall. It could lead to big funding cuts for the state's nine publicly subsidized safety net hospitals.

Lawmakers are meeting in a special session to consider how to raise new revenue, including a health insurance premium tax. Most Republicans are resisting—so far.

But even if they solve the short-term budget problem, it leaves the larger issue of poor pay for Medicaid providers, which will make it more difficult for the newly insured to access care. Private hospitals and physicians have traditionally left the role of serving Medicaid patients in this state to safety net hospitals and clinics.

Edwards has promised to raise the state's low Medicaid rates, but that's a long-term goal and not on the special session's agenda. Moreover, his administration needs to smooth relations between the five private insurers who manage the Medicaid plans and the state's providers, who complain that the managed-care system is administratively cumbersome.

Adequate reimbursement and fewer hassles still may not get private providers engaged, local officials fear, since it would mean having their private patients share waiting rooms with the poor and growing numbers of people of color. “We had a two-tier system,” said Dr. Rebekah Gee, secretary of the state Health Department.

If the state can raise rates, the hope is that every facility and every physician will take on more responsibility for serving the poor. “They may not be eager to take these Medicaid patients, but we think they will with this new funding stream,” Gee said.

Medicaid expansion advocates hope Louisiana's expansion under the Affordable Care Act will prod other Southern and conservative-led states to follow suit. But some observers wonder whether Louisiana's social welfare tradition going back to the Huey Long era makes the state an outlier in the South.

“There is the Deep South and the Deep Deep South,” said David Becker, an associate professor of public health at the University of Alabama at Birmingham who studies Medicaid policy. “In Louisiana there was a governor who ran on this issue and demonstrated leadership. I don't know if there is the same opportunity in a place like Alabama.”

Republicans, who generally oppose all things Obamacare, aren't thrilled about the Edwards-led expansion. But most have gone along, at least partly because the big infusion of federal Medicaid dollars will reduce the 2017 budget shortfall by $187 million. It's also expected to expand the state's economy by $1 billion and add 15,000 new jobs.

“It's the governor's decision on Medicaid expansion regardless of what the Legislature wants,” said state Sen. Norby Chabert, a Republican with close ties to the Leonard J. Chabert Medical Center, a safety net hospital in Houma named for his late father. “It's irrelevant whether I'm a supporter or not. I'm for providing care and certainly for shoring up funding for our most vulnerable.” Pausing a beat, he added, “Can you hear me dancing?”

The state's hospitals, particularly its safety net hospitals, generally welcome the expansion in terms of helping them serve patients better. But Pete November, executive vice president of the Ochsner Health System in suburban New Orleans, said the expansion may only prove to be a modest financial positive for his system given that rates are low and hospitals face a sharp reduction in Medicaid and Medicare supplemental payments for serving the poor and uninsured.

“It will vary by hospital depending on the demographics of each hospital,” said Paul Salles, CEO of the Louisiana Hospital Association.

Leaders of the safety net hospitals recognize that they'll have to prove their quality to keep their traditional patients who now have a Medicaid card that theoretically allows them to go to any provider.

Jared Stark, CEO of University Hospital and Clinics in Lafayette, said his organization has expanded its primary-care capacity and is in the process of receiving certification as a patient-centered medical home. He's concerned, though, about his system's specialty capacity to serve new Medicaid patients with serious untreated conditions.

“We want to improve quality and patient satisfaction so that when people have coverage we want to be a viable option,” said Stark, who projects the expansion will reduce his 116-bed hospital's bad debt by about $6 million a year. “I think we've positioned ourselves well to do that.”

Even as the expansion starts, the Edwards administration is renegotiating the state contracts with the not-for-profit systems that run the safety net hospitals, which were privatized by Gov. Jindal three years ago. Edwards and Gee say they want to pursue an ambitious program of payment and delivery reform—possibly including some type of shared-savings program tied to quality performance and patient outcomes.

Edwards said his political advisers initially warned him against talking about Medicaid expansion, with its links to the politically toxic Obamacare. “There was the idea that Medicaid was just another welfare program for those who don't work.” But he was able to turn that around by emphasizing that 70% of the beneficiaries would be full-time workers in low-paid jobs in construction, tourism, restaurants and other industries. Polls showed that 69% of Louisianans backed the expansion.

The governor said he's gotten moving personal feedback. A young mother he knows recently came up to him and his wife and told them that because she was able to sign up for Medicaid, she's going to be able to receive an operation she has needed. Edwards said the three of them cried together.

“It's not right versus left,” Edwards said about of the political struggle to expand Medicaid. “It's right versus wrong.”