A regulatory sand­box for Wall Street • Louisiana’s smart Med­i­caid idea

The Bayou State is in­creas­ing the up­take rate for Med­i­caid via food stamp el­i­gi­bil­ity

Bloomberg Businessweek (Asia) - - NEWS -

Six years af­ter Oba­macare be­came law, about 30 mil­lion Amer­i­cans still lack health insurance. Louisiana has found a trick to get a great num­ber of them to sign up for Med­i­caid.

The policy is based on a sim­ple co­in­ci­dence: Med­i­caid and the fed­eral food stamp pro­gram have al­most the same in­come thresh­old, at least in the 31 states that have ex­panded their Med­i­caid pro­grams un­der the Af­ford­able Care Act. The Bayou State has de­cided to au­to­mat­i­cally check to see whether the res­i­dents who re­ceive food stamps also qual­ify for Med­i­caid— and if so, to reach out and sign them up. This ap­proach will at once lower the state’s unin­sured rate (one of the high­est in the coun­try) and cut Med­i­caid’s ad­min­is­tra­tive costs.

The strat­egy seems so ob­vi­ous, it’s a won­der no other state has made it policy. Na­tion­wide, some 8.8 mil­lion peo­ple who are el­i­gi­ble for Med­i­caid haven’t en­rolled. To put that in per­spec­tive, it’s more than the num­ber in any of these cat­e­gories: peo­ple who are el­i­gi­ble for sub­si­dized Oba­macare insurance plans but haven’t signed up; peo­ple who lack insurance be­cause their states have re­fused to co­op­er­ate in the Med­i­caid ex­pan­sion; or peo­ple who can’t get insurance be­cause they’re in the coun­try il­le­gally.

In­creas­ing the up­take rate for Med­i­caid is the sin­gle most promis­ing way to re­duce the num­ber of unin­sured Amer­i­cans— and it re­quires no ac­tion by Congress. Louisiana has al­ready iden­ti­fied 105,000 po­ten­tial en­rollees. It’s true that greater en­roll­ment will in­crease Med­i­caid spend­ing. But it will elim­i­nate much of the public cost that arises when unin­sured res­i­dents seek ex­pen­sive care in emer­gency rooms.

Louisiana, whose budget short­fall is among the most se­vere in the coun­try, demon­strates that en­rolling more peo­ple in Med­i­caid doesn’t un­der­mine fiscal pru­dence or good government. That’s a mes­sage other states should hear. <BW>

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