BATON ROUGE — Louisiana’s health department offered two scenarios Wednesday for slashing $131 million in spending over the remaining five months of the budget year, if lawmakers refuse to raise taxes. The state health secretary described either option as “catastrophic.”

Nearly all the cuts would be levied on the privatized LSU hospitals that care for the poor and uninsured, under the first scenario. With lost federal matching dollars, the reduction would reach $315 million, a 24 percent cut to spending on the hospital contracts, but with less than half a year to spread out the hit.
Under the other proposal, all optional Medicaid programs would be eliminated.
That would include getting rid of hospice services for terminally ill patients and ending a program that provides health care services to more than 600 “medically fragile” children. A wide array of home- and community-based programs that serve the elderly and people with developmental disabilities would be shuttered.

Stricter limits also would be placed on prescription drugs for Medicaid patients under the second scenario.

“The reality is both plans will have a catastrophic impact to those served by Medicaid,” Health and Hospitals Secretary Rebekah Gee said in a statement.
Gov. John Bel Edwards is asking lawmakers to pass tax hikes in a mid-February special legislative session to rebalance the budget without deep cuts. Gee, an Edwards appointee, said she hoped the “worst-case scenarios” outlined Wednesday could be avoided.

“If this reduction plan becomes a reality, its impact will be felt by almost all residents,” she said. “Vital health care services across Louisiana will be completely eliminated or diminished if additional revenue is not identified in the upcoming special session.”

Louisiana’s budget has a gap estimated at more than $700 million that must be closed before the financial year ends June 30.

The $131 million cut to health care services assumes lawmakers will agree to tap into Louisiana’s “rainy day” fund, redirect some oil spill settlement money and make across-the-board cuts to protected budget areas.

That would still leave a gap the Edwards administration said would be split largely between health care and public colleges, unless lawmakers agree to raise revenue.

Edwards has offered a list of tax proposals he has asked lawmakers to consider, such as boosting sales taxes, raising taxes on cigarettes and alcohol, cutting tax-break programs for business and increasing the income taxes charged on middle- and upper-income taxpayers.

Higher education leaders released their budget-cutting scenarios on Monday, saying reductions of such magnitude would force widespread layoffs, summer school cancellations, class eliminations and degree-program closures across campuses.

The special legislative session is scheduled to begin Feb. 14.

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