BATON ROUGE — Despite a national focus on the individual insurance markets, the Republican health plan being debated in Washington could have far more sweeping impact in Louisiana for other provisions that curb federal spending on Medicaid.

That redesign is estimated to come with deep spending cuts. The implications would be major for Louisiana, where more than one-third of residents get health services through the Medicaid program, financed jointly by the state and federal government.

That's not just the 400,000 people, largely working poor, who signed up for Gov. John Bel Edwards' Medicaid expansion program created under former President Barack Obama's federal health law.

Another 1.2 million low-income people in Louisiana are enrolled in Medicaid that existed before the Affordable Care Act: pregnant women, children, elderly residents and people with disabilities who rely on that program for preventive care, cancer screenings, birthing services, nursing home care, hospice services and home-based services that keep people from living in institutions.

Combined, about 35 percent of Louisiana's population relies on the program. The state is spending $11 billion on Medicaid this budget year. More than 69 percent of that comes from the federal government.

Changing up the financing system is far from inconsequential.

"This will be the biggest reform of an entitlement program ever. This is a huge change," said Republican U.S. Sen. John Kennedy, who supports the redesign plan.

Much of the savings estimated by the nonpartisan Congressional Budget Office for the GOP health plan would be driven by reduced federal spending on Medicaid, estimated to drop $880 billion over the next decade. How that would shake out among states is unclear.

The Louisiana Hospital Association and the Metropolitan Hospital Council of New Orleans said they're concerned about those spending reductions.

"In Louisiana, cuts of this magnitude would negatively impact services to the most vulnerable covered by Medicaid, including the elderly, disabled, children and pregnant women," the organizations said in a joint statement.

But congressional Republicans disagree the changes would damage health coverage.

"I reject that there will be upheaval," said Republican U.S. Sen. Bill Cassidy, a doctor.

The Republican plan would make changes to both the Medicaid expansion and the traditional Medicaid program that existed before expansion.

The plan would end the higher federal financing rate for Medicaid expansion beneficiaries starting in 2020. It also would overhaul the framework of Medicaid, ending its open-ended federal financing and introducing spending caps in 2020. States would gain flexibility over enrollment and benefits. Federal payments would grow with a measure of medical inflation.

As part of the House leadership team, U.S. Rep. Steve Scalise, the third-ranking House Republican, champions the entire health replacement proposal. He described the Medicaid changes as "historic reforms to make Medicaid more efficient and effective."

Cassidy said the capped payment for Medicaid makes the state do "a better job of watching the pennies" and helps "protect the federal taxpayer." Kennedy said the revamp would give states more flexibility to design their own Medicaid programs and develop innovative ideas for change, rather than following a rigid set of rules from Washington.

Republican U.S. Rep. Ralph Abraham, a rural community doctor who represents northeast and central Louisiana, also embraces the Medicaid changes.

He said while funding may drop to Louisiana, the state will have more decision-making over how the program works, and Abraham believes there's a lot of room for improvement. He said Medicaid is a "poor insurance program" that offers "second-class service" to patients.

"Like any federal program there is a lot that can be cut and not affect the patient," Abraham said. "The state, they're going to have to be smart about how they spend that money."

Not surprisingly, U.S. Rep. Cedric Richmond of New Orleans — Louisiana's only Democrat in Congress — opposes the House GOP plan. In a statement, he said the proposed Medicaid changes would force states to "ration care."

The Louisiana Department of Health says it's "working to determine the potential impact" of the health proposal. A congressional vote is expected to come before a dollars-and-cents effect on Louisiana and its Medicaid services is clear.

 

Melinda Deslatte has covered Louisiana politics for The Associated Press since 2000. Follow her at twitter.com/melindadeslatte.