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WASHINGTON, D.C. – U.S. Sen. John Kennedy (R-La.) today urged Louisiana Governor John Bel Edwards to look into Medicaid cost saving efforts for the state.  This follows the letter that Sen. Kennedy sent Gov. Edwards last week highlighting possible ways to save Louisianans money.  Specifically, Sen. Kennedy pointed out the benefits of enacting work requirements for Medicaid recipients.

“Medicaid is a very important program, however, we have to be mindful about the cost.  Every dollar we spend unnecessarily on Medicaid is a dollar less we have for our public schools, our universities, and our roads.  I strongly encourage Gov. Edwards to look into cost-saving measures for Medicaid immediately,” said Sen. Kennedy.  “One of the best ways to save money is by implementing work requirements for Medicaid recipients.”

Click here or the video below to watch Sen. Kennedy’s comments about work requirements for Medicaid.

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Text of the letter:

 

October 10, 2017

 

The Honorable John Bel Edwards

Governor

State of Louisiana

P.O. Box 94004

Baton Rouge, Louisiana 70804

 

Re: Medicaid cost savings

 

By email, fax and U.S. mail

 

Dear Governor Edwards:

As you are aware, our Medicaid spending in Louisiana is growing at an alarming rate.  In Fiscal Year 2008-09, we spent $6.6 billion on the Louisiana Medicaid Program.  $1.5 billion of that was state taxpayer money and $5.1 billion was federal taxpayer money.  The Louisiana Medicaid budget for this fiscal year, 2017-18, was appropriated at $12.5 billion.  $3.3 billion of that is state taxpayer money and $9.1 billion is federal taxpayer money.

Thus, in 9 years, overall Medicaid spending is up 90%.  The state Medicaid contribution is up 120%, an average of a whopping 13% a year.  Federal monies are up 80%.

Louisiana now has 1.6 million Medicaid enrollees, about 440,000 of whom were added under Obamacare.  65% of all babies born in Louisiana had their births paid for by Medicaid.

Top quality health care for our people is extraordinarily important.  (No reasonable person has ever described Medicaid as “top quality,” but we can discuss that another time).  So, however, are other things, like elementary and secondary education, higher education, TOPS, roads and public safety.  The massive, unchecked spending increases in Medicaid are crowding out spending on these other priorities.  We need to do something about it.

The Trump administration is anxious to work with states on reducing Medicaid costs.  In fact, you received a letter from the federal Department of Health and Human Services Secretary and the Centers for Medicare and Medicaid Services (CMS) Administrator in March of this year encouraging you to seek permission from them to experiment with new ways to more efficiently and effectively promote Medicaid’s objectives.

Other states are seizing this opportunity.  Here is what some of them are doing:

1.  Indiana is seeking CMS permission to require Medicaid recipients who are able-bodied, without minor children and not elderly to work at least 20 hours per week.  According to a study by the University of New Hampshire’s Casey School of Public Policy, this is about 31.3% of the nation’s adult Medicaid enrollees.  These enrollees would participate in Indiana’s Gateway to Work program.  Gateway to Work helps participants fill out applications, build resumes, prepare for job interviews and search for employment.  The objective, of course, is to get people into the workforce so they can purchase their own health insurance and know the dignity of being self-sufficient.

2.  Indiana is also seeking permission to charge higher premiums to Medicaid enrollees who smoke cigarettes in the second year of enrollment.

3.  Arkansas wants to add a work requirement to its program and help some Medicaid patients transition to private insurance through tax credits and other assistance. 

4.  Kentucky recently filed a CMS application to charge small monthly premiums for Medicaid participants.  The premiums would range from $1 to $15.  That little bit of money would add up to big savings of more than $300 million for the state of Kentucky.  It also would reinforce the fact that everyone should have “skin in the game” and accept some responsibility for paying for a “free” government service that is not free at all, because taxpayers pay for it.

5.  Kentucky and Arizona are seeking permission to require Medicaid enrollees to report changes in their income that would exceed the Medicaid limits.

6.  Wisconsin is seeking CMS permission to drug test Medicaid applicants without children.  Applicants who test positive will not lose eligibility for Medicaid but instead will be referred to a 90 day drug treatment program.  A Medicaid applicant would not have to take an initial drug test if the applicant is willing to enter a substance abuse treatment program.  The idea is to build a healthy population that is able to work. 

7.  Wisconsin is also seeking CMS permission to charge monthly premiums for Medicaid ranging from $1 to $10 per household according to household income, impose a small co-pay ($8 for the first visit) for Emergency Room visits, and ask Medicaid applicants to fill out a health risk assessment to identify unhealthy behavior that can be improved through patient education.

These are only some of the innovative steps other states are taking to save money in Medicaid, encourage work and improve health outcomes.

You should also know that these efforts are not only Trump Administration-encouraged initiatives.  President Obama, for example, approved a waiver application by Arkansas to require its Medicaid beneficiaries to pay a small share of their health care.

I ask that you instruct your DHH Secretary to review these state proposals, develop a cost-savings plan for the Louisiana Medicaid Program, report the findings and seek legislative and CMS approval to implement them immediately.  My office will be happy to assist you and DHH in developing such a plan and getting it approved.

Thank you, Governor, for your cooperation in this endeavor.

 

 

Sincerely,

 

John Kennedy

U.S. Senate