Louisiana Hospital Stabilization Fund, Amendment 2 (2014)

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Amendment 2
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Constitution:Constitutional amendment
Referred by:Louisiana State Legislature
Topic:Healthcare
Status:On the ballot
2014 measures
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November 4
Amendment 1
Amendment 2
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Endorsements

The Louisiana Hospital Stabilization Fund, Amendment 2 is on the November 4, 2014 ballot in Louisiana as a legislatively-referred constitutional amendment. The measure, upon voter approval, would create a “Hospital Stabilization Fund” into which hospitals could deposit money in order to draw down more federal Medicaid matching funds. The legislature would determine the assessment fee on eligible hospitals. Most hospitals would receive more money back than they would put into the fund due to the flow of federal dollars.[1][2]

The measure was sponsored in the Louisiana Legislature by State Representative Charles Kleckley (R-36) as House Bill 532.[1]

Text of measure

Ballot summary

The official ballot text reads as follows:[1]

Do you support an amendment to create the Hospital Stabilization Fund to stabilize and protect Medicaid reimbursements for health care services by depositing assessments paid by hospitals, as authorized by the legislature, into a fund to support Louisiana hospital reimbursement?

(Adds Article VII, Section 10.14)[3]

Constitutional changes

See also: Article VII, Louisiana Constitution

The amendment would add a Section 10.13 to Article VII of the Louisiana Constitution.[1]

The amendment’s full text can be read here.

Background

Hospital Stabilization Funds

According to the Public Affairs Research Council, most states assess fees on hospitals that are used to "draw down" federal dollars through the Federal Medicaid Matching Rate. These Medicaid dollars are used to compensate hospitals for the care they given to Medicaid patients and the uninsured. Only 10 states, including Louisiana, don't have this type of hospital funding.[2]

Support

The measure was introduced into the legislation by Rep. Charles Kleckley (R-36).[1]

Supporters

Officials

Amendment 2 was sponsored by the following officials in the Louisiana Legislature:[1]

Organizations

  • Louisiana Hospital Association[4]

Arguments

The Public Affairs Research Council provided arguments for and against the constitutional amendment. The following is the council's argument in support:

Hospitals are legally and morally bound to treat patients needing urgent care but could suffer losses treating Medicaid patients and the uninsured under the current financial system in Louisiana. After years of government cuts in provider rates, Louisiana’s community and private hospitals need a more reliable source of funding to fulfill their caretaker mission. Following a plan used in most states, the proposed amendment would allow Louisiana to take advantage of a federal Medicaid program routinely used to stabilize hospital finances nearly nationwide. The new plan would draw down federal matching dollars without ultimately costing either the state or the hospitals more money.

The new system would provide assurances to the hospitals that, if they pay the new assessments, their investment will not be raided to fill holes in the state budget unrelated to healthcare. That is why this plan needs the protections for its formula and its trust fund that only the state constitution can provide. By establishing a more sustainable source of financing, hospitals can better avoid cost shifting their expenses to patients and insurance companies and thereby save money for citizens and business. Hospitals also would have more reliable revenues to invest in technology, wellness programs, health screenings and better access to care. [3]

—Public Affairs Research Council[2]

Opposition

Arguments

The Public Affairs Research Council provided arguments for and against the constitutional amendment. The following is the council's argument against:

Creating constitutional protections for a certain class of health care providers – hospitals – will create problems for other programs without this special status. In particular, higher education and health care providers without this protection will be at greater risk for reductions because of the state’s limited discretionary spending authority. Constitutional provisions limiting the budgetary options of policymakers should be avoided.

The financing system created by this amendment could be done without constitutional protection or an amendment. The same program could be created by statute, which would give the governor and Legislature more flexibility to tweak the law if necessary. [3]

—Public Affairs Research Council[2]

Path to the ballot

Louisiana Constitution
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Preamble
Articles
IIIIIIIVVVIVIIVIIIIXXXIXIIXIIIXIV
See also: Amending the Louisiana Constitution

State Representative Charles Kleckley (R-36) introduced a bill to the legislature to alter the constitution and put the measure before voters on March 29, 2013. The bill was approved through a two-thirds vote in both legislative chambers. HB 532 was approved by the Louisiana House of Representatives on May 7, 2013. The amendment was approved by the Louisiana Senate on May 28, 2013.[5]

House vote

May 7, 2013 House vote

Louisiana HB 532 House Vote
ResultVotesPercentage
Approveda Yes 99 94.29%
No65.71%

Senate vote

May 28, 2013 Senate vote

Louisiana HB 532 Senate Vote
ResultVotesPercentage
Approveda Yes 33 86.84%
No513.16%

Related measures

See also

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