Louisiana must move quickly to avoid damage to its Medicaid program resulting from a sooner-than-expected end to federal assistance, state Treasurer John Kennedy said last week in outlining a 14-step plan.

The end of a temporary hike in federal funding to the state's health care system, implemented after the 2005 hurricanes, will cost the state $860 million from Medicaid's $7.7 billion budget in fiscal 2013. "We don't have years" to develop a solution, he said. "The congressional Medicaid reduction starts in October."

Gov. Bobby Jindal and his administration should have been better prepared for the program's demise, Kennedy said.

"We knew this day was coming sooner or later," he said. "It came sooner because of federal budget problems. Louisiana wasn't ready."

Kennedy said $300 million in the state capital outlay should be returned to the general fund. The money, which accumulated from previous annual surpluses, could be used for health care or to pay down existing state debt. The capital outlay fund could be replenished with proceeds from a future bond issue, he said.

The size of the 424-bed Charity Hospital under construction in New Orleans should be reduced, the treasurer said, because Jindal will not allow the state to participate in the Medicaid portion of the federal Affordable Care Act.

"If we overbuild in New Orleans, there will not be enough money left to deliver health care to the poor and uninsured in the rest of the state," Kennedy said.

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