Georgia Tipsheet

The Georgia General Assembly begins the 2013 Legislative Session a week from today, Governor Nathan Deal releases his budget in ten days, and spending cuts are already front and center in expectations of each.

A report from the Atlanta Journal Constitution looks forward to a budget from the governor “that funds the basics, includes another round of spending cuts and probably not a lot else.”

Deal has already ordered state agencies to find $553 million in cuts for both the previous and upcoming years.

The pattern of spending cuts, funding the essentials and not much else continues the trend started during the onset of the Great Recession for Georgia. Fiscal year 2013’s budget was $19.3 billion, some $2 billion below 2008 levels.

The AJC’s report notes that revenue collections in fiscal year 2013 “are below the 5 percent growth rate needed to fund the budget.”

All of this comes amid ever-expanding Medicaid, K-12 and college rosters in the Peach State. The polarizing hospital ‘bed tax’ will likely take front and center in the Medicaid debate, while it’s expected that colleges will again raise tuition or fees to offset cuts.

However, K-12 was not included in Deal’s $553 million in cuts order. He’s “committed to put extra money into the state’s pre-kindergarten program to fully restore the program back to 180 days per year.”

Another $50 million in state funds towards the Port of Savannah has also been promised inclusion in the governor’s budget

-Brandon Howell

Gov. Nathan Deal has just one week to determine whether Georgia will establish an insurance exchange and enroll in an optional federal program that would swell the state’s Medicaid roster by more than 600,000 new patients.

The health care reform law passed in 2010 required states to broaden eligibility guidelines for Medicaid enrollment lest they faced stiff federal funding penalties. But the U.S. Supreme Court recently ruled that Congress lacked the authority to withhold funding from those states that rejected the expansion effort, effectively neutering the provision.

The decision triggered a chain reaction among Republican governors vowing to not participate, though Deal remained mum for some two months before telling reporters in late August he didn’t have “any intention of expanding Medicaid.”

Deal reaffirmed that position again this week, arguing the associated costs of the expansion–it’s estimated the program would mean a $4 billion tax burden over the next decade for Georgians–would be too great for the already cash-strapped state to absorb.

But the governor has been less clear on whether or not he would establish an online health care marketplace. If Deal refuses to honor the provision, which went untouched by the court in its recent decision, the federal government is required to create the exchange.

Deal told reporters this week he has made a decision, but said he would not publicly disclose it until first notifying federal health officials.

The deadline for both decisions is November 16.

- James Richardson

TAMPA – Georgia Governor Nathan Deal vowed Tuesday he would not enroll his state in a controversial Medicaid expansion program, the first comments in which the Republican swore off a central element of President Barack Obama’s healthcare reforms.

Deal said Georgia’s already-strained budget, from which he directed all state departments and agencies to shave three percent a piece, could not underwrite a $4 billion-per-year expansion of the program.

“I do not have any intention of expanding Medicaid,” he told a trio of papers Tuesday at the Republican convention in Florida. “I think that is something that our state cannot afford.”

The president’s healthcare package stipulated an unprecedented expansion of Medicaid eligibility guidelines, providing for stiff funding penalties for those states that balked.

But the U.S. Supreme Court recently neutered the provision in a landmark decision that found Congress lacked the authority to dole punitive remedies to those states that rejected the expansion effort.

The ruling triggered virtually wholesale rejection by GOP chief executives of the program, no longer a forced proposition. Deal, though, only expressed mild concerns in the weeks that followed.

Asked if anything might change his decision to opt out, long delayed after a majority of his Republican laterals, Deal told the gaggle: “I can’t think of any right now that would induce me to say that we’re going to expand our Medicaid population up to 138 percent of the federal poverty level.”

- James Richardson

The question of Georgia’s participation in a federally prescribed expansion of Medicaid rolls is one that will likely remain in limbo until the fall, but one of the state’s most prominent physician lobbying outfits is already floating skepticism of the measure.

Should Peach State pols assent to an unprecedented expansion, Georgian taxpayers would be shouldering a new estimated tax burden north of $4 billion stretched over the next 10 years.

The Medical Association of Georgia has not yet given the federal proposal an up or down vote, but officials of the 6,500-member group admit to serious misgivings about the strain an expansion might place on the state’s budget and physician corps.

“We do not believe expansion is financially sustainable, especially with our state budget looking at a $400 million hole on Medicaid,” the group’s executive director, Donald Palmisano, told Atlanta NPR affiliate WABE on Wednesday. “By expanding another 600,000 additional patients into the system where the system itself does not cover the cost of providing the care, it only makes it that much more difficult for a physician to be able to accept those patients and remain financially viable.”

State Medicaid actuaries estimate that the program’s annual deficit will swell to more than $600 million by 2015. And that’s not considering the budget busting implicit in the expansion.

Notwithstanding Governor Nathan Deal, Republican governors across the country have begun opting their states out of the program wholesale. South Carolina, Louisiana, Wisconsin, Florida and Nebraska were among the first red-helmed states to forswear participation.

- James Richardson

The furious response of Republican governors nationwide to the U.S. Supreme Court’s health care ruling last week has left Georgia’s chief executive one of the odd men out as state governments from Florida to Wisconsin forswear a federally prescribed expansion of Medicaid rolls.

The high court’s decision that federal lawmakers lacked the authority to legislative punitive remedies to those states that reject the expansion effort–lower enrollment hurdles in the Affordable Care Act would extend the franchise to some 32 million Americans according to estimates–has set off a chain reaction of GOP governors abandoning the overhaul.

But even as Georgia Governor Nathan Deal has expressed reservations over the costs associated with the unprecedented expansion, he remains one of the increasingly few who have not withdrawn their state from participation.

The controversial federal health care law stipulated an expansion of Medicaid eligibility guidelines jointly underwritten by state and federal tax dollars. The federal government would own 100 percent of the costs for the first three years, but state coffers would begin contributing 10 percent to the effort thereafter. (The law originally included a provision that punished those states that failed to comply, stripping them of already-appropriated Medicaid funds.)

That huge new outlay, most GOP governors say, is simply too great a burden on state budgets. Participation no longer mandated, simply put: few are.

Republicans Nikki Haley of South Carolina, Bobby Jindal of Louisiana, Scott Walker of Wisconsin, Rick Scott of Florida, Dave Heineman of Nebraska have all opted out. Other GOP guvs–like those in Mississippi, Maine and New Jersey–have at least said they are reluctant to participate.

Federal legislators and regulators failed to anticipate the direction of Supreme Court’s health care opinion last week, so states face no deadline to decide. Medicaid directors are not even certain if states can drop out after first enlisting.

The state’s Democratic Congressional delegation is leaning hard on Deal to adopt the new guidelines. Reps. John Lewis, David Scott, Sanford Bishop and Hank Johnson told the governor in a Friday letter that the expansion was “the right thing to do” for the state.

But all indications are that Georgia–one of 26 states whose challenge the court heard–will delay the tough call until at least the fall.

- James Richardson

Even as the U.S. Supreme Court restricted on Thursday the Medicaid expansion provision in the Affordable Care Act, the Georgia agency tasked with oversight of the health program announced today it had canceled its next monthly board meeting for a lack of consequential considerations.

The Department of Community Health emailed a notice Thursday morning, just minutes after the court had made public its health care decision, that a “sparse agenda” had precipitated the canceling of its July meeting. The email, sent by the executive assistant to the commissioner, said its next meeting would be held in August.

An incredulous Tipsheet source forwarded the two-sentence memorandum, expressing concern how “the board with responsibility for implementing Medicaid changes” could announce it was “canceling its July meeting because of a sparse agenda.”

A DCH press officer confirmed the meeting had been cancelled, but offered no more explanation as to why.

The recent health care law, which largely cleared a critical judicial hurdle today, stipulated an expansion of Medicaid eligibility guidelines underwritten by more tax dollars, first absorbed by the federal government and later by states. By 2020, individual state coffers would be ponying up ten percent of costs associated with the expansion.

Those states that refused cooperation would be stripped of existing federal funding.

Georgia’s Medicaid program, which DCH administers, consumes $21 million in state and federal funds per day. (The already-cash-strapped program has recently begun reorganizing the safety net for the state’s underserved population as it wrangles an expected annual deficit of more than $600 million by 2015.)

But the Supreme Court ruled today that while it was within the authority of Congress to expand Medicaid’s enrollment roster, it lacked the authority to enforce a punitive provision on those state’s that failed to acquiesce. “What Congress is not free to do is penalize states that choose not to participate in that new program by taking away their existing Medicaid funding,” Chief Justice John Roberts wrote.

State health chiefs from Washington State to Florida are already scrambling to reassess obligations in the wake in the ruling. But here in Georgia, the agenda is sparse.

- James Richardson

As the Peach State’s 1.7 million Medicaid enrollment roster swells by another 600,000, a new report by a state health official has revealed the program is facing a massive shortfall north of $300 million.

Georgia’s Department of Community Health will lobby the General Assembly next legislative session for $308.2 million to plug fiscal 2013′s budget gap, its top financial officer said this week.

The program’s fiscal outlet has precipitated more serious consideration of shifting more patients from fee-for-service coverage to managed care.

“Right now we’re at about 16 percent of the state budget,” DCH Commissioner David Cook told Atlanta public radio WABE. “That’s projected to grow to 17 and 18 percent in just the next year or two. The numbers are not sustainable.”

State health officials are expected to finalize a overhaul scheme by summer’s end, at which time the DCH will entertain the bidding of private health care providers.

Already 1.2 million of the state’s Medicaid enrollees receive managed care from one of three private outfits.

But the program’s greatest expense is owed to the care of the blind, aged and disabled. It’s this group, whose per-patient costs register $9,500 annually, that relies on fee-for-service

Cook told WABE he’s hopeful a shift to managed care will benefit both the state and its disabled enrollees: “There’s a lot of talk about how we implement that. We can coordinate care so that we don’t do unnecessary tests; more communication between providers; more nurse follow-up on making sure people are taking their medication.”

- James Richardson