Louisianans benefited immensely from recovery aid after Hurricane Katrina, but the “very temporary” spike in personal income that resulted threatens the state’s portion of federal medical funds, says Alan Levine, secretary of Louisiana’s Department of Health and Hospitals.
Levine told the Baton Rouge Press Club today a 42% jump in per capita personal income from 2005 to 2007, thanks to public and private reconstruction aid, will reduce the state’s federal Medicaid match even though median income was stable for that period.
The Federal Medical Assistance Percentage, based on a three-year average of per capita personal income, is normally about 72% for Louisiana, but will drop in October to 67% and in October 2010 to 63%, Levine says. In the coming fiscal year, he says the FMAP reduction will mean a loss of $350 million to $400 million in federal funds; the following fiscal year, the loss will be about $1 billion.
“It’s not fair to penalize a state in the wake of a natural disaster,” Levine says, noting that Louisiana officials are asking Congress to pass a bill to adjust the FMAP formula to disregard extraordinary revenue in a declared disaster zone.
Levine criticized President Barack Obama’s health care reform plans, warning that a “single-payer”-style, national insurance option could undercut private providers and funnel more than 100 million people into a government program. “I’m not trying to be partisan,” Levine says. “The problem is, if you’re not going to consider the consequences … how will the marketplace react?”—Todd R. Brown
