As Republicans look to cut more than a trillion dollars out of the federal budget, some state leaders and health care officials worry that steep cuts to Medicaid could be on the table, which could blow a hole in the state budget and cause deep cuts in services to the 1.6 million Louisiana residents on the program.
“The Medicaid cuts that are being discussed by think tanks and in Washington, without a doubt, would harm our ability to provide lifesaving care for Medicaid patients across Louisiana,” said Ryan Cross, vice president for government affairs at the Franciscan Missionaries of Our Lady Health System, which operates seven regional medical centers and urgent care centers scattered throughout Louisiana.
But some, including House Speaker Mike Johnson, R-Benton, and Steve Scalise, R-Jefferson, say those fears are overblown.
Reconciliation Bill the U.S. House is vote upon on Feb. 25, 2025
“What we're talking about is rooting out the fraud, waste, and abuse,” Johnson said. “We can eliminate all these fraudulent payments and achieve a lot of savings. What you're doing with that is you're shoring up the program and you're making sure that the people who rely upon that have it and that it's a better program.”
The stakes are particularly high for Louisiana, which has one of the highest per-capita percentages of residents on Medicaid — more than a third of them. The program pays for health care for pregnant women, children, elderly, disabled, and working adults who rely on the state-federal healthcare insurance.
Healthcare accounts for $21.4 billion, or 43.4% of the state’s total budget. Louisiana taxpayers will be expected to put up $3.23 billion of that amount through the state general fund during the next fiscal year. Any decrease in federal funding would require the state to pay more.
What would get cut?
Johnson and Scalise are pushing for “one big, beautiful bill” that contains Trump’s agenda for tighter border security, increased energy production, more defense, and continuation of tax breaks that are soon to expire. The legislation would add $5 trillion to $11 trillion to the nation’s $36 trillion debt.
Trump said Medicaid, Medicare and Social Security “would not be touched.”
The bill requires the House Energy and Commerce Committee to cut at least $880 billion. Those reductions could come in the form of eliminating regulations for refineries. But some — including some Republicans — are concerned that, given the magnitude of the amount needed, Medicaid will be main target.
Some have raised the expectation of cutting Medicaid spending through a series of moves, such as reducing federal matching payments. That would increase the amounts the state must pay, wreaking havoc on Louisiana’s budget.
House Budget Chair Jody Arrington, R-Texas, detailed in a Jan. 25 memo the possibilities of lowering the 90% share the federal government pays for healthcare provided to states that expanded Medicaid rolls. The memo also discussed the possibility of increasing assessments on hospitals and capping care costs by basically giving states a set amount rather than paying for each service performed.
State Rep. Jack McFarland, who as chair of the Louisiana Legislature’s House Appropriations Committee is just now starting to draft the state’s budget, said he has been receiving worried calls from across the state. And while unsure exactly what, if any, changes are in store, he is preparing for the worst.
Last week, he asked the Louisiana Department of Health to look at the various congressional proposals and estimate how much each could cost the state, then look at what services could be cut and what populations would be impacted.
“It would create some significant challenges,” said McFarland, R-Winnfield.
Basically, the state would have to cut services, reduce Medicaid rolls and find ways to come up with the money.
“I don't know how we would continue to look at reducing income taxes on the state level,” McFarland said.
Louisiana health care providers are also watching nervously.
“Such proposals would place immense financial pressure on healthcare providers across the state, particularly small and rural hospitals that often serve as their communities’ primary healthcare providers and leading employers,” Paul A. Salles, president of the Louisiana Hospital Association, wrote Johnson on Feb. 17. “Given that hospitals directly and indirectly support more than 308,000 jobs in Louisiana, the broader economic repercussions would be substantial.”
Jeff Reynolds, executive director of the Louisiana Rural Hospital Coalition, said Tuesday he’s telling hospital administrators that the only talk in Congress, so far, has been about the need to reduce Medicaid costs. No details have been released on just how that might be achieved.
But administrators worry that efforts to reduce the Medicaid rolls creates a larger population of uninsured who can’t pay but the hospitals still have to treat in emergency situations.
“It’s all speculative talk and that’s the problem, with so much unknown everyone is anxious,” Reynolds said.
"I'm not concerned"
Others, however, say there's no reason for alarm.
“I’m not concerned about the reconciliation bill one bit,” state Senate President Cameron Henry, R-Metairie, said Tuesday. “There’s not one mention of the word Medicaid in the entire bill, there are no cuts to Medicaid in the bill, so all of the lying and fear-mongering is just that – lies and fear-mongering.”
Republican Rep. Julia Letlow, from Start, represents a district with one of the nation’s highest percentage of Medicaid enrollees.
“The budget resolution is purely procedural and the first step in a lengthy process of preventing tax increases on families and small businesses," she said in a statement. "Committees have not drafted legislation, and this is the start of a conversation to ensure programs like Medicaid will always be sustainable.”
Scalise said the budget bill was being misrepresented.
“This bill doesn't even mention the word Medicaid a single time," he said. "And yet all Democrats are doing is lying about what's in the budget because they don't want to talk about the truth of what we're voting to start.”
But Democratic Rep. Cleo Fields, of Baton Rouge, said it’s disingenuous for Republicans to say they don’t know how the House Energy and Commerce Committee would cut $880 billion when the only item being discussed is Medicaid.
“That’s exactly what they say they’re going to do. It’s unconscionable to say the least,” Fields said Tuesday.
A state senator until joining Congress in January, Fields added that state government won’t raise taxes to cover its larger share.
“They’re going to move people off the rolls,” he said. “This is going to dramatically effect healthcare in Louisiana.”
Rep. Troy Carter, D-New Orleans, agreed.
“Local legislators will either need to come up with significant new sources of funding to fill the hole left by Republican cuts or – more likely – find ways to cut Medicaid spending in Louisiana,” Carter said Tuesday. “In my district, there are 291,555 people on Medicaid at risk of losing their health care under their plan. That includes 128,121 children under the age of 19 and 33,000 seniors over 65. That’s unacceptable. That’s not a solution.”