New Orleans-Area Plan for Uninsured Would Eventually Cost $500M Annually
A plan to restructure the New Orleans-area health care system for uninsured residents would cost more than $500 million annually once it is fully implemented -- 43% higher than Louisiana planners estimated last month, the New Orleans Times-Picayune reports (Moller, New Orleans Times-Picayune, 11/3). The Louisiana Health Care Redesign Collaborative in October proposed a five-year plan for the New Orleans area to create a universal health care system; establish a "medical home" network of physicians, medical clinics and hospitals that would operate similarly to a managed care network; and reduce the region's reliance on the Louisiana State University Charity Hospital System, which provides care for uninsured residents. Most area Medicaid beneficiaries would be able to choose enrollment in a medical home or would be able to purchase private insurance coverage with funds currently used for the charity system (Kaiser Daily Health Policy Report, 10/30). The plan aims to cover at least 80% of the estimated 127,000 uninsured New Orleans-area residents and would expand Medicaid coverage statewide for children, pregnant women, the disabled and residents with serious mental illnesses. According to the new estimate, the expansion of Medicaid and private managed care plans would require government subsidies of $523 million per year by fiscal year 2011-2012. The latest cost estimate takes into account health care cost inflation and the $125 million annual cost of increasing Medicaid physician reimbursement rates. The Times-Picayune reports that "[e]ven if the vast majority of [the] cost is borne by the federal government, as state health authorities envision, there still would be a $67 million shortfall, and some low-income adults would remain without coverage." State Department of Health and Hospitals Secretary Fred Cerise said the cost of the program is likely to change as the state negotiates with CMS. Negotiations between the state and CMS are expected to conclude before 2007, after which the state Legislature would consider the plan (Moller, New Orleans Times-Picayune, 11/3).This is part of the KHN Morning Briefing, a summary of health policy coverage from major news organizations. Sign up for an email subscription.