Deal says health care costs need tight rein
Gov. Nathan Deal said Wednesday that health care spending continues to burden Georgia’s budget, and he signaled that his longtime opposition to expanding the state’s Medicaid program has not changed.
His comments in the State of the State address contrasted with the actions of some fellow governors, who recently have proposed or pushed Medicaid expansion.
Newly elected Louisiana Gov. John Bel Edwards, a Democrat, signed an executive order Tuesday expanding Medicaid coverage in that state under the Affordable Care Act.
Expansion, which is optional for states, means extending the Medicaid program’s coverage to more people.
Deal, a Republican, said expansion would have cost Georgia more than $200 million in the fiscal 2017 budget (which will begin July 1). “That number would only continue to grow exponentially,” he told a joint session of lawmakers Wednesday.
Meanwhile, the Georgia Chamber of Commerce is moving ahead with a task force to study improving access to care in the state.
Georgia, without Medicaid expansion, maintains one of the highest uninsured rates in the country. Expansion would extend coverage to an estimated 300,000 to 400,000 Georgians in the so-called “coverage gap.’’ These people make too much income to qualify for Medicaid as it’s currently constituted, but don’t earn enough to qualify for subsidies in the health insurance exchange created by the ACA.
Georgia Democrats have vowed to raise the issue of expansion more strongly in this year’s General Assembly, but Republicans control both chambers.
Sen Vincent Fort (D-Atlanta), in the Democrats’ response to the Deal speech, said, “We want a Georgia that stops turning down billions of federal dollars — tax dollars we have paid to Washington — by expanding Medicaid to provide health insurance to half a million Georgians, create 70,000 new jobs and keep rural hospitals across the state open.”
More than 30 states now have expanded Medicaid, and Republican governors in two other holdout states — Matt Mead of Wyoming and Dennis Daugaard of South Dakota — are trying to persuade their legislatures to expand the program. Alabama Gov. Robert Bentley, also a Republican, has spoken favorably about such a move as well.
Deal, who has been in office since the ACA took effect, has stood consistently against Medicaid expansion. And in Georgia, even a governor favoring such a step would not be able to enact it as Edwards did in Louisiana. A 2014 Georgia law requires that any expansion plan get the approval of the Legislature.
In his speech Wednesday, Deal complained about administrative costs associated with the ACA. The reporting requirements of the federal health law make the state devote $2.1 million in the fiscal 2017 budget just to turn in the paperwork, he said.
The governor, using a familiar metaphor of Georgia as a ship, suggested that if the state were looking for something to throw overboard, “that’s a good place to start.”
Deal said the state’s Medicaid spending, even without expansion, has increased substantially. The cost of the program has grown from $2.6 billion in fiscal year 2013 to $3.1 billion in fiscal year 2017, an increase of 15.7 percent, he said. Medicaid and PeachCare spending per Georgia family amounts to $1,258 per annum.
Much of that increase is due to Medicaid enrollment growth, which is not related to expansion. The ACA, through its insurance exchange outreach, has made many Georgians aware that they or their children were already eligible for Medicaid or PeachCare, leading them to sign up.
Some of the spending hikes the state is dealing with pertain to higher health care costs in general, said Bill Custer, a health insurance expert at Georgia State University.
Custer said Wednesday that Medicaid expansion would provide ‘’clear economic benefits to the state,” in new jobs and economic impact.
Taxpayers would save through lower local taxes as well as lower insurance costs, he said. The state would save money on programs such as behavioral health and prison health costs, where federal dollars would supplant almost all of the current state expenditures, Custer said.
Ohio and Kentucky have seen positive financial effect from expanding Medicaid, he said.
In his address about Georgia’s situation, Deal also mentioned the high cost of covering state employees and school personnel in the State Health Benefit Plan, The state currently contributes $842 million for health care coverage for state employees while also paying over $1 billion for the employer share of health insurance for teachers, he said.
The governor also said that the Georgia Department of Behavioral Health and Developmental Disabilities has seen an employee turnover rate of almost one-third in the past year. Deal said that for those agencies with the highest turn over rate, the budget allocates additional funds to be used to raise pay scales in addition to an overall 3 percent increase.
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