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Steve Gardes

COVID-19 aid could cause long-term financial damage to Louisiana

New details have recently emerged in a new Foundation for Government Accountability Report (FGA), “Extra COVID-19 Medicaid Funds Come at a High Cost to States”, which indicate that Democrats in Washington are once again not letting a good crisis go to waste. Democrats are attempting to entrap states like Louisiana into COVID-19 aid and relief funds that have massive redistribution obligations buried in them. New COVID-19 legislation is being contemplated as we speak, and It is imperative that our U.S. Senators and Congressmen fix this problem now!
The FGA analyzed the 880 pages of COVID-19 legislation (CARES Act and FFCRA), which was released to the Senate only 20 minutes before they had to vote on it, and their report indicates that damage Democrats have inflicted on Small Business with $25/hour unemployment benefits buried in the Payroll Protection Program is nothing compared to what they are getting ready to do to the States and taxpayers. Just like with Obamacare, Democrats are once again using Medicaid as their stealth weapon of choice, and are conditioning extra federal COVID-19 Medicaid funds with “massive strings attached” that will force states to agree not to remove ineligible Medicaid enrollees forever, or make other Medicaid program changes (like Block Grants ?), in order to receive stimulus funding. Many states have statutory requirements that their Medicaid agencies quickly remove ineligible enrollees; now these states will be faced with perverse choice of ignoring state laws on Medicaid eligibility, or forgo the COVID-19 aid altogether.
Many state budgets, which are required by law to be balanced each year, were already facing serious financial problems as a result of skyrocketing Medicaid costs after the Great Recession crisis followed by Democrat induced Obamacare expansion. Louisiana’s budget also fits in this category. Now comes the COVID-19 crisis, which will substantially increase Medicaid rolls even further, followed by Democrat induced FFCRA provisions that will not let the states remove any ineligible Medicaid applicants, even after they return to work, if they take stimulus money. This legislation guarantees many state bankruptcies in the near future unless the federal government comes to the rescue, and now we know why Democrats are insisting that in order for small businesses to get an extra $250 billion under the proposed expanded Payroll Protection Plan (which has already run out of money), the states must get $250 billion as well. If that happens, the trap will have been set!
Democrats use Medicaid as a modern-day Trojan Horse to pass their camouflaged redistribution legislation during times of crisis. Republicans must now act responsibly in protecting small business, states, taxpayers and even Capitalism itself.

Steve Gardes is a Certified Public Accountant (CPA) and Certified Valuation Analyst (CVA) with over 40 years of public accounting experience.


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