(The Center Square) — With Louisiana facing budget deficits in the hundred of millions, legislators looked at ways to save money through health care service reductions.
The Louisiana Department of Health was asked to present the most reasonable programs to cut during the House Committee on Appropriations meeting Friday.
The Pelican State is currently facing projected deficits of $340 million in fiscal 2026, $370 million in 2027 and $508 million in 2028.
Committee Chairman Rep. Jack McFarland, R-Bienville, described the issue as an “imminent problem we must address.”
He went on to say the state will inevitably not have enough to maintain and advocated for efficiencies in government. This meeting also follows an executive order from Gov. Jeff Landry requiring an “areas of efficiency” report from all state agencies regarding the state budget by November, 2024.
Michael Harrington, secretary of Louisiana Department of Health, says solving the issue will require more than just efficiency improvements.
The current fiscal year 2025 budget for the department totals $19.9 billion. However, the Legislature can only control 16%, or $3.2 billion of that budget. Around 71% of the fund is federal and 13% comes from other means such as charity or donations.
Of that $19.9 billion, 91% of it is for Medicaid, meaning their services will have to take the largest hit. The optional covered services, or programs that are not mandatory under Medicaid, are supported by $821 million in state funds.
The department’s presentation included potential reductions of $105 million in state funds. Because federal funding matches a percentage of the funds allocated annually by the state, the total amount reduced under this plan would be $332 million.
The largest elimination was flattening the nursing home inflationary adjustment to save $21 million. The next highest suggested cut was to reduce the Hospital Directed Payment Program by $20 million. Reimbursement rate increases for direct care staff could also be cut, saving $15 million but affecting over 1,000 providers.
An estimated 1,700 recipients and 72 providers would be impacted by the next eliminations that include the Pediatric Day Healthcare Center; PACE, a program for the elderly; and the Adult Day Healthcare Waiver Program, which provides an alternative to nursing home care. Cutting these programs would save about $15 million.
Of the most impactful cutbacks, the final elimination mentioned was graduate medical education through Medicaid, saving $7.4 million.
Representatives from both sides of the aisle pushed back against these cuts despite the budget deficit. Rep. Jason Hughes, D-New Orleans, said the timing of this proposal could not have come at a worse time.
“As we approach Thanksgiving and Christmas, our senior citizens, our disability community, many of our families are gonna have unnecessary anxiety,” Hughes said.
Rep. Lawrence Bagley, R-Caddo felt there may never be a good time to support these cuts, and said he could not sign legislation that includes these reductions.
“It would be hard for me to be in favor of any of this,” Bagley said.