Mike Klein Online

The Whale in the Room: Federal Health Care Reform

Mike Klein

There was a whale in the room Thursday morning at the State Capitol.

THE PATIENT PROTECTION AND AFFORDABLE CARE ACT.

Community Health commissioner David Cook had nearly finished his hour-long budget testimony when a question came from the floor:  In years ahead, what is the expected fiscal impact of federal health care reform?    “The 2014 budget is going to be a whale,” Cook said.  “We’re going to have to be prepared to answer a lot of questions. Where we come up with the money is going to be a challenge.”

Cook said new projections are the ACA will cost $2.5 billion additional dollars between 2014 and 2019, and up to $5 billion between 2019 and 2023.  “As the Act becomes more mature, there is less and less federal money to support it,” Cook said.  “The biggest part of the Affordable Care Act is the expansion of the Medicaid population.  We estimate 650,000 additional people. We’ve got 1.7 million now.”

Georgia’s $7.8 billion annual Medicaid budget is a combination of state and federal funds.  Medicaid payments cost the state $11.5 million per day.  Fifty-nine percent of Georgia births are Medicaid babies.  Some 1.7 million Georgians use Medicaid.  The good news – always look for any good news – is Cook said the state 5.2 percent Medicaid annual growth rate is less than the 7.3 percent national growth rate.

Georgia is among more than two dozen states that filed suit to overturn the Affordable Care Act.  The U.S. Supreme Court will hear arguments this spring and a summer opinion is anticipated.

The State Health Benefit Plan is the other big business model at Community Health.  SHBP is actually three plans to cover state employees, teachers and non-certified school personnel.  The program faced several hundred million dollars of deficits over Fiscal 2012 and 2013, but Cook said changes that include higher premiums and the elimination of some medical options have significantly pared down the deficit.

“Today our State Health Benefit Plan is on a better financial footing,” Cook said.  He said changes were considered essential for Georgia to maintain its triple AAA bond rating.

Thursday morning’s third and final day of annual budget hearings focused heavily on social service and health care agencies.  Human Services commissioner Clyde Reese told legislators the state expects to lose $37 million next year in federal support for Temporary Assistance to Needy Families, welfare.  “We’ve been told that money is going to go away,” Reese said.  He also said the state food stamp caseload is up 52 percent since 2007, with some 1.65 million active food stamp assistance recipients.

State Office of Planning and Budget Director Debbie Dlugolenski said the Governor’s Office will continue to ask state agencies for budget cuts going forward, even in years when revenue improves.

(Mike Klein is Editor at the Georgia Public Policy Foundation)

January 19, 2012 - Posted by mikekleinonline | Uncategorized | Georgia Public Policy Foundation, Georgia State Budget, Mike Klein, Patient Protection and Affordable Care Act