News > Press Releases
Jul 20, 2009
NEW ORLEANS – Today, Governor Bobby Jindal held a press conference to highlight the critical need for urgent federal action to fix Louisiana’s projected decrease in the Federal Medical Assistance Percentage (FMAP) due to a flawed calculation that includes temporary economic activity due explicitly to the recovery from two major hurricanes, which will cost the state hundreds of millions of additional dollars unless the calculation is fixed. Prior to the press conference, Governor Jindal had a meeting with U.S. Senator Mary Landrieu to discuss a solution for the state.
Louisiana’s impending dramatic decrease in federal funding is due to the federal formula’s faulty calculation of sources of income in the state, including insurance and Road Home payments after the 2005 storms. From 2005 to 2007, according to the Bureau of Economic Analysis, Louisiana's per-capita income is reported to have increased by 42 percent – a dramatic, sudden increase which will drop the state’s federal Medicaid funding.
Governor Jindal said, “It’s critical that we fix the FMAP rate or Louisianians will suffer the loss of hundreds of millions of dollars all due to a faulty calculation by the federal government which has absurdly included recovery dollars as personal income. The people of Louisiana have been devastated by four major storms in just over three years and they’re fighting to get back on their feet, and should not be victimized again by their own government. This formula will put severe pressure on health care funding, higher education funding and other key Louisiana priorities. I want to thank Senator Landrieu for her assistance and leadership in working with our delegation to correct this situation.”
Historically, Louisiana’s federal match for Medicaid has ranged from approximately 70 percent to 73 percent, with very small variations from year-to-year. But, within the next year, Louisiana will face the largest decrease of FMAP in the nation – a decrease almost twice that of the state with the next largest decrease, North Dakota.
Louisiana’s FMAP, which would normally be 72 percent, is temporarily enhanced by the federal stimulus. This coming October, the FMAP will decrease to 67 percent, and then will decrease to 63 percent in October 2010. The drop in the FMAP from 72 to 63 percent will cost the state an estimated $700 million per year. The state will start seeing this loss of funding this October, with the full impact starting January 2011.