Medicaid copays get a new life in Louisiana budget talks, but still must clear big hurdles

January 29, 2018 GMT

Medicaid CoPay was both a big passion and even bigger disappointment for Fred Mills when he ran a pharmacy in Parks, long before being elected to the state Senate.

The concept requires people enrolled in the government health care program, if they can afford it, to pay something when they visit a doctor or a clinic or buy a prescription, the way people with private insurance do.

“Everybody thought it was going to be a silver bullet for the budget, for accountability. But it’s not enforceable,” Mills said in an interview last week. “I’ve never been able to find the proof in the other states that it is anything more than an unfunded mandate.”


Batted around for years, Medicaid CoPay now has a real possibility of happening in Louisiana.

The reason is that House Republicans have forwarded the idea — along with other fiscal reforms, such as a Medicaid work requirement, easy online access to all state purchases and a hard cap on state spending — as a way to make more palatable the elimination of tax breaks needed to raise revenues. And though Democratic Gov. John Bel Edwards is on board, giving the idea more juice when legislators convene March 12, the legislation still would face significant hurdles, Mills said.

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State revenues are expected to come in about $1 billion short of what is needed to pay the bills when the fifth of the 5-cent sales tax expires June 30. Edwards submitted a budget proposal last week that would require dramatic cuts in services unless, he said, some new revenues are found.

Requiring those who can to pay a nominal sum would save the state about $172 million, according to the Louisiana Department of Health.

As chairman of the Senate Health and Welfare Committee that would vet the legislation, Republican Mills said Medicaid CoPay looks good on paper but may not be workable in the real world.

Medicaid participants still receive the treatment regardless of whether they pay the fee, and federal regulations prohibit providers from going after the insured for the money — as they could do with patients who have private insurance.

Mills calls copays a “backdoor way” of reducing the rates paid to doctors, hospitals and pharmacists — an assessment with which many health care providers agree.


“They’re calling it ‘copay,’ but what they’re doing is making Medicaid pay less,” said Dr. Keith DeSonier, an ears, nose and throat specialist from Lake Charles who treats Medicaid patients.

Medicaid already charges less for medical services than the rates contracted by private insurers, DeSonier said. In Louisiana, the rates paid for treating Medicaid-covered patients already are so low that the federal government has warned state officials not to lower them further. A copay would allow officials to subtract the amount the Medicaid participant presumably would pay out of pocket. And if the physician couldn’t collect, then he or she would be paid even less for the service they provided.

Medicaid covers the health care costs for 1.6 million of Louisiana’s 4.6 million people — nearly a third of the population. The program covers 700,617 children and another 168,782 who are disabled as well as pregnant women, the elderly and many people with life-threatening conditions. Though the federal government picks up about two-thirds of the $12.5 billion annual cost, Medicaid is still the largest single expense for Louisiana taxpayers and grows each year.

Seventeen states charge copays, costing users up to $8 for a doctor’s visit or a prescription, depending on their income levels, and more if they seek treatment for nonacute conditions at an emergency room, which is much more expensive.

The Deficit Reduction Act of 2005 gave states the option of imposing cost-sharing on families enrolled in Medicaid without having to seek the permission of the federal Department of Health and Human Services.

But the federal rules regulating cost sharing are vast and complex.

Large groups are protected from the fees, such as children under the age of 6 living in families with incomes less than $34,638; children with disabilities; and pregnant women. Emergency room personnel are required to check off a long list of conditions, such as determining if an alternate provider is nearby, before proffering a bill.

Medicaid CoPay has long been sought by conservatives who surmise that the insured will more closely watch treatment costs if their money is on the line. “CoPays do not fully balance the costs of care against the benefits, but they nudge health care decisions in the right direction while still reducing the risk of large outlays for the insured,” the Cato Institute, a libertarian think tank in Washington, D.C., wrote in its 2017 handbook for policymakers.

On the other hand, the Kaiser Family Foundation, which studies health care policies, reports that studies indicate copays are often seen as a hurdle for those with low incomes to receive needed medical attention. For instance, Kaiser cited a survey of those in Utah’s Primary Care Network program that showed that more than 40 percent of respondents had difficulties affording the fees despite being charged relatively small amounts.

In his speech opening the 2016 legislative session, Edwards said: “We can improve our Medicaid program and require personal responsibility for health by charging copays.”

He hasn’t changed his position, the governor recently told The Advocate editorial board when discussing budgetary reform ideas the House GOP leadership linked to addressing the looming $1 billion revenue shortfall for the fiscal year that begins July 1.

But the issue is difficult because doctors and hospitals oppose the concept.

“It’s problematic because the providers view that as a rate cut,” Edwards said. “But to the extent that you promote individual responsibility, you steer people away from the emergency room, when the emergency room is not appropriate. It is the right thing to do, I think there is a way to do it.”

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Prairieville state Rep. Tony Bacala sponsored one of the copay measures two years ago. He sidelined the attempt in the face of intense opposition. Since then, the Republican has chaired a task force looking for ways to reduce the cost of Medicaid on state taxpayers.

House Republicans are busily drafting legislation that, Bacala said in an interview last week, would answer many of the concerns raised by providers while keeping the fees low enough to keep Medicaid insured from not seeking treatment.

Though he personally won’t be the sponsor of bill when it is filed, Bacala said, “the final product will balance the concerns.”