Louisiana has approved renewing the contracts of four managed care organizations that offer Medicaid healthcare plans to some 1.2 million state residents. (Photo by Anna Spoerre/The Missouri Independent)
Louisiana lawmakers renewed state contracts Thursday with four private managed care organizations that provide Medicaid coverage, calling on state health officials to ensure the money results in better health outcomes.
Louisiana will spend more than $16 billion on its managed Medicaid contracts in calendar year 2027, according to numbers shared at Thursday’s meeting of the Joint Legislative Committee on the Budget. The deals range between $3.2 billion to $5.8 billion and cover some 1.2 million of the 1.3 million people in the state who use Medicaid.
The four organizations are Atena, AmeriHealth Caritas, Humana Health and Louisiana Healthcare Connections. Two other providers — UnitedHealth and an Elevance Health-Blue Cross Blue Shield of Louisiana joint venture — chose this year to pull out of the state.
Most of the time spent on the contracts involved discussion about continued health struggles across the state.
Sen. Regina Barrow, D-Baton Rouge, said her Google search before the meeting showed her Louisiana’s health ranking among states went from 49th in 2010 to 50th last year.
“We don’t need to continue to invest money in something that’s not working,” Barrow said.
Committee member Rep. Tony Bacala, R-Prairieville, shared his concerns about the state having spent more on Medicaid in recent years in direct payments to hospitals independent of the cost for its managed care contracts. Louisiana has raised its reimbursement rates for caregivers and facilities who accept Medicaid patients. But Bacala noted that more than half of Louisiana’s Medicaid enrollees are children, who tend to have fewer health issues
“It just boggles my mind that we’re doing it,” Bacala said about needing to spend more on Medicaid.
Seth Gold, Medicaid director for the Louisiana Department of Health, told committee members the state’s higher Medicaid costs can also be attributed to healthcare inflation and the worsening health of enrollees.
“The average member is relatively sicker than they used to be, which means that we spend more per member than we used to,” Gold said.
Other lawmakers stressed to state health officials that Medicaid expenditures should be tied to better health outcomes.
Barrow requested that the health department establish metrics for the four Medicaid providers so that lawmakers can track how they spend public dollars and whether the money improves the health of enrollees.
Gold said the state Medicaid program will place more emphasis on accountability from providers and preventative health measures, such as well-baby visits. He also mentioned that providers would be directed to increase the availability of prescription medications to treat substance abuse.
“We’re not going to pay anymore for bad outcomes,” Gold said.
The federal government covers more than 75% of the cost of Medicaid in Louisiana, which is higher than the national average of just under two-thirds, according to Kaiser Family Foundation data.
Some states could soon have to pay a larger share if they don’t fall in line with Trump administration policy changes, which include coverage limits for noncitizens legally in the U.S. that took effect this month and work requirements. Higher reimbursement rates for hospitals and doctors who accept Medicaid patients are also expected to increase state costs.
Just before the committee approved the Medicaid contract renewals, its members learned Louisiana Health Connections and Ochsner had reached terms to keep the health system’s affiliated caregivers and facilities in the Medicaid provider’s network. As recently as last week, Ochsner told the health department there was still no deal in place that included coverage for the 70,000 LHC enrollees who get their care through Ochsner.
Also at the meeting, lawmakers approved a three-year, $4.3 billion contract for health insurance through the state’s Office of Group Benefits, which covers state employees, retirees, K-12 public school teachers and their dependents. The plan also includes those who work at state colleges and universities as well as participating school districts and political subdivisions.
Blue Cross Blue Shield of Louisiana was the only bidder for the contract and will be paid 3% of the total value, which comes to $140 million. The other 97% of state dollars will cover plan participants’ claims over the contract period.
