NEW ORLEANS -- This week, Louisiana Health Secretary Alan Levine announced the state's Medicaid program is now running about $308 million in the red.
Levine and Gov. Bobby Jindal are floating a plan to patch the hole with some minor cuts and $231 million in one-time money.
That includes federal stimulus dollars, a financial settlement and proceeds from a special account.
"The good news is we can get through this current fiscal year with these one-time revenues, with these reductions that won't have a large impact on the program," said Jindal.
In the past, the Jindal administration has fought attempts to use one-time only funds to pay for recurring expenses. But, in this case the administration approved it, claiming some of the additional expenses such as treatment for the H1N1 or swine flu are not expected to be on-going next year.
Incoming Louisiana Medical Association President Dr. Patrick Breaux hopes state lawmakers approve the plan.
"I think this band-aid approach, while it's not favored by the governor or the legislature, is reasonable at this time," said Breaux.
Medicaid is the government's health insurance for the poor.
Earlier this year, physicians and hospitals took some majors cuts in the amount of money the state compensates them for care. Breaux said additional cuts could convince some providers to stop taking Medicaid patients.
"Any further reduction would be impossible for a private practice physician to be able to take care of medicaid patient because it would be below their cost of doing business," said Breaux.
Jindal warns Louisiana may be in for more, even deeper Medicaid cuts, as much as $700 million in reductions come January 2011.
"What's happening is the federal government is counting Road Home money and insurance grants as part of income," said Jindal. "We know that's not income. They're saying Louisiana's income grew by 40 percent from 2005-2007. It would be the largest reduction in the state's medicaid rate."
Jindal is now trying to convince Congress and President Barack Obama to step in and change the next Medicaid calculations.
