Mike Klein Online

Governor Deal at Eggs: No Such Thing as “Free Health Care”

Mike Klein

Mike Klein

Governor Nathan Deal said the state Department of Community Health has been told to reduce its amended current fiscal year budget by 3 percent and then find 5 percent more in new cuts next year to help the state absorb Medicaid costs that continue to escalate.  The state faces a Medicaid deficit that will approach $800 million during the next 18 months of its fiscal cycle.

Deal devoted nearly his entire speech to health care when he addressed the Georgia Chamber of Commerce annual “Eggs and Issues” breakfast Wednesday at the World Congress Center in Atlanta.   The Governor also suggested folks who cannot attend Thursday morning’s State of the State address should monitor his “Tweeter” account.  Deal will announce his budget during the speech, scheduled for 11:00 a.m. at the State Capitol.

“Georgians who have already received a paycheck this January have no doubt noticed that their payroll taxes went up and their take-home salary went down,” Deal said.  “This is the cost of entitlements.  If you think your taxes went up a lot this month, just wait till we hve to pay for ‘free health care.’  Free never cost so much.”

The push is on to quickly approve a Medicaid funding fix bill proposed by the Governor with an initial Senate floor vote perhaps this week.  Lt. Governor Casey Cagle and House Speaker David Ralston echoed their support for the governor’s bill that would give the Community Health board the authority to continue the hospital provider fee that would otherwise sunset in June.

The fee paid by all Georgia hospitals based on annual revenue is used to draw down federal dollars that are redistributed to hospitals that serve Medicaid patients.  The General Assembly enacted the fee three years ago to address a rapidly developing shortage in Medicaid funds caused by increased demand for services.  Deal said 12-to-14 hospitals would face closure if the provider fee is not continued.  DCH imposes a similar nursing home industry fee.

Governor Nathan Deal

Governor Nathan Deal

“In fact, we are one of 47 states that have either a nursing home or hospital provider fee or both,” Deal said.  The governor said “it makes sense to me” that DCH should have authority over both fees “for maximum efficiency and effectiveness.”  The move also means that state lawmakers would be spared having to vote to continue an expiring fee or impose a new one.

Deal said DCH has identified $109 million in cost-savings. “But this hardly covers the additional nearly $500 million in needed funds caused by growth in Medicaid expenses during the same time frame,” Deal said.  “This means we must make necessary cuts in other agencies and core functions of government since raising taxes is not an option I will accept!”

The governor is no fan or friend to the federal health care reform law known as Obamacare.

During the past several months the Deal administration said it will not expand Medicaid eligibility starting in 2014 because the state cannot afford more than $2.5 billion that it currently spends annually on Medicaid.  The federal government pays about $5 billion annually. Georgia anticipates its share of Medicaid costs will increase at least $1.7 billion over the next ten years.

Deal said the federal health care reform law will add $106 million to the cost of state-provided health care benefits for active and retired employees starting in 2014.  He also said Georgia will be assessed a new $35 million insurance tax starting in 2015.  About 13 percent of all state budget dollars currently pay for Medicaid or the state children’s health insurance programs.

“The irony to me is that there are those in the medical community who are urging the expansion of the Medicaid program while at the same time, they are seeing more and more medical providers refusing to accept Medicaid patients,” Deal said.  “If you are losing money now how do you reconcile the number of patients on whom you will lose even more money.”

Georgia also said it will not create a state health insurance exchange, as envisioned in the federal health care reform law.  “I see no benefit to our citizens to have a program bearing the name of the State of Georgia over which our elected or appointed officials have little if any say so,” Deal said.  “While many federal programs come with strings attached, these strings turn states into marionettes to be manipulated by federal bureaucrats.”

As for “Tweeter,” the Governor noted, “My staff tells me that I am really getting into the modern age.   You can go to my Tweeter account!” for updates on the State of the State address.  The address will be carried live on General Assembly and Georgia Public Broadcasting websites. GPTV will broadcast the State of the State address and the Democratic leadership response in their entirety at 7:00 p.m. on the legislative program “Lawmakers.”

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

January 16, 2013 Posted by | Uncategorized | , , , , , , , | Leave a comment

History Up Close at U.S. Supreme Court Health Care Arguments

Mike Klein

Monday morning millions will pay attention via media reports but only a few dozen will be inside when the U.S. Supreme Court begins three days of hearings that will decide the constitutionality of President Barack Obama’s federal health care reform law.  Georgia Attorney General Sam Olens will be among those few who have a seat in the Court where history will begin to unfold.

“We won’t know the opinion until the end of June,” Attorney General Olens said this week when he discussed the case before Georgia Public Policy Foundation members and guests.  The lawsuit that reached the U.S. Supreme Court is just one of several filed nationally that all had the same goal: Throw out the Patient Protection and Affordable Care Act and start over.

Georgia is among 26 plaintiff states that are challenging the law before the Supreme Court.  U.S. District Court Judge Roger Vinson ruled the individual mandate unconstitutional in his January 2011 decision.  Vinson further ruled that the mandate is the essential component of the entire law and, therefore, he declared the entire law unconstitutional.

The federal government appealed to the 11th Circuit Court of Appeals in Atlanta.  Last August the appellate court upheld Judge Vinson’s individual mandate decision by a 2-1 margin but the three-judge panel also ruled that the mandate could be severed from the entire Act, so the remainder of the law could stand.  “We didn’t like that part of the ruling,” Olens said.

That is a very condensed version of how this case got to the Supreme Court.  As the Attorney General outlined, six hours of arguments over three days will be conducted as follows:  Monday the Court will consider whether legal challenges are premature or whether challenges must wait until after the law takes full effect in January 2014.  Individual mandates will be argued Tuesday and Medicaid expansion Wednesday.

Georgia Attorney General Sam Olens

Olens explained the question-at-hand for Monday.  “The issue is simply that you cannot file a lawsuit on the imposition of a tax before the tax is collected,” the Attorney General said.  “Since the tax, or penalty, is not collected, until January 2014 the theory goes this case has been prematurely brought and you would have to re-file it after January 2014.”

The individual mandate section to be argued Tuesday has generated the most headlines since the Obama administration began to pursue health care reform legislation.  It would require that every adult American – “with minimal exceptions,” Olens said — must obtain health insurance or pay a penalty to the federal government starting in 2014.

This raises the question: can the federal government force citizens to purchase any product, and if they choose to not purchase the product, can the government then impose a fine?  The U.S. District Court in Florida and the Appellate Court in Atlanta both said no.  Other courts have issued different rulings, causing confusion and requiring a Supreme Court final decision.

Medicaid expansion under this law – without federal funds to support the expansion – is the Wednesday discussion.  Olens said Georgia’s Medicaid-eligible population could swell by 650,000 to 750,000.  The reason is the bill establishes Medicaid eligibility at 133 percent of the federal poverty level starting in 2014.  Medicaid is a shared federal – state partnership but states increasingly are being forced to absorb expanded costs even before this new law takes effect.

“We already know that (fewer) doctors will accept Medicaid,” Olens said.  “What happens when we have a 35 percent increase in the number of Georgians that are then on Medicaid?  It is an additional $2.5 billion cost (to Georgia) over the decade.”

Attorney General Olens also said the federal health care law will require large employers that include state governments to offer a minimum level of benefits, as decided by the federal government.  “They are telling us what coverage we need to provide to state employees,” Olens said.  “That ought to be your decision, not the federal government’s decision.”

(Mike Klein is Editor at the Georgia Public Policy Foundation

March 23, 2012 Posted by | Uncategorized | , , , , , , | Leave a comment

New Possible Strategy for Georgia Health Insurance Reform

Mike Klein

A behind-the-scenes coalition that believes the U.S. Supreme Court will overturn the federal health care reform law is working on a new health insurance strategy for Georgia.

Almost certainly, this summer’s biggest headline will be the Supreme Court decision to uphold or overturn the Patient Protection and Affordable Care Act which President Barack Obama’s administration counts as one of its finest achievements.  Two federal appellate courts upheld the law and one rejected it.  Supreme Court arguments are scheduled for the final week of March.

Federal law trumps state law, so nothing in the evolving state strategy could be implemented in Georgia if the Supreme Court upholds the federal health care reform law.  The Georgia Public Policy Foundation has hosted meetings of interested parties working on state health insurance reform options, but the Foundation has not assisted with drafting legislation nor has it taken a position on possible legislation.

A staggering 1.8 million Georgians have no health insurance.  They are not in group plans.  They do not have individual plans.  One-in-five men, women and children living in Georgia have no health insurance.

Coalition principles include restructuring the private market to increase competition and improve portability, protection against loss of coverage, and improved affordability for people and small businesses.  A core strategy is the expansion of defined contribution plans administered by employers.

Employers who cannot afford to offer health insurance will be able to make a defined contribution to a tax-free Health Reimbursement Account or HRA. Employees may use these pre-tax dollars to pay insurance premiums.  Pre-tax dollars in health savings accounts, another type of tax free account, could be used for deductible co-pay charges and a wide variety of wellness programs.

Consumers who do not have access to employer health plans would be allowed to deduct 100 percent of health insurance premium expense from their state income tax.  Current law does not allow for that deduction.   In addition, the proposal would allow small businesses to take advantage of “list billing” that would allow employees to pay for their individual health policy premiums with pre-tax dollars.

All of these efforts address the tax inequity of the current system that critics contend needlessly places the cost of health insurance beyond the reach of many families.

Small firm employers often find it almost impossible to offer comprehensive major medical insurance benefits.  The strategy proposes several ideas.  Companies with 10 or fewer employees could receive state tax credits for each employee who is enrolled 12 consecutive months in a major medical program.  Credits would be available for three years.  The entire program would end after ten years.

The strategy includes a focus on keeping currently insured Georgians insured.  Small businesses and their employees would have the same access and protections available to large firms and their employees. People who lose jobs after age 55 would have better access to COBRA extended coverage.  They could purchase extended coverage until Medicare eligibility at age 65.

Another idea addresses health insurance access for employees who leave small firms.  Currently small firm employees are eligible for just three months while large firm employees can extend and pay for insurance coverage for 18 months.  The proposal would equalize both groups at 18 months.

Another effort would focus on providing access to primary care for the uninsured.  A new “Georgia Charity Care Network Tax Credit” would be similar to the existing private school tax credit.  The credit could be taken by an individual or corporation that makes a cash contribution to an approved charity health care network.  There would be maximum annual contribution levels and the program would be capped at $2 million maximum per year for three years.

Federal health care reform requires that Georgia must create an insurance marketplace or the federal government will impose one in 2014.  A state health insurance advisory committee report published in December said the state should opt for its own program, but it stopped short of saying the General Assembly should begin to plan for that program now.  Georgia is waiting on the Supreme Court ruling.

The coalition believes a private, free market health exchange would provide all the benefits of a government-run model, but without the drawbacks. Georgia, which leads the nation in health information technology, is home to several companies already providing similar services.

A regional health insurance idea would enable Georgia to partner with four or more states to create a large private marketplace.  Major medical and group insurance carriers whose policies are approved in any member state would be able to offer those policies in other member states.  Georgia’s insurance commissioner would be authorized to explore major medical partnerships with other states.  Any plan approved by a partner state would be available to consumers in the other partner states.

One feature of federal health care reform enables children to remain on their parents’ health insurance policies until age 26.   The Georgia twist would revise that to “tax dependent” children.  The distinction is that insurance eligible young adults must be dependents, not just grown children who have begun their independent lives, except where they are riding on parents’ health insurance policies.

Several other strategies are being considered.  One would create a high risk pool for people with pre-existing conditions, which would help stabilize the individual and small group market.  Pre-existing conditions restrictions would be standardized to not more than 12 months in group and individual plans.  Expanded physician choice options would benefit health care consumers.

Overall, the emerging Georgia health insurance strategy is not an attempt at medical care reform – who gets medical treatment, how much they get and who decides their treatment.  All of the ideas currently being discussed pertain only to insurance factors.   By one estimate, it might be possible to reduce the number of uninsured, non-Medicaid eligible Georgians from 1.8 million to 600,000.

(Mike Klein is Editor at the Georgia Public Policy Foundation

February 13, 2012 Posted by | Uncategorized | , , , , , , , , | Leave a comment

At Least One Republican Supports Health Insurance Exchange

Mike Klein

Republicans seem almost united that the General Assembly should not consider legislation this session to create a health insurance exchange.  “The House, the Senate and the Governor have all agreed to wait on that,” Sen. Renee Unterman said Thursday morning.

Well, united with at least one exception.  Former lawmaker and second-year Insurance Commissioner Ralph Hudgens said, “I would like to see the legislature move forward with an exchange,” when he sat next to Unterman at “Health Care Unscrambled” hosted by Georgians for a Healthy Future.  Think of it as “Eggs and Aspirin” under dim lighting at the Freight Depot.

“Wait on that” means wait for this summer’s hotly anticipated U.S. Supreme Court opinion that will decide whether the federal health care reform law survives a constitutional challenge.  Unterman started a spirited conversation that was the highlight of the morning conference.

“I was dismayed to hear, as you just heard, the Senator (Unterman) say there will be no health exchange legislation this year,” Democratic Sen. Nan Orrock said moments later.  “We are headed for a cliff.  There are those who oppose (the Affordable Care Act) and those who are for it.  I am for it.  We move forward when we can bring different ends of the political spectrum together. We’re missing the boat to keep kicking the ball down the field.”

Orrock found an apparent insurance exchange soul mate in commissioner Hudgens who said, “I don’t want the federal government setting up an exchange in Georgia.  I want Georgia setting up an exchange for Georgia.  I don’t think moving forward with an exchange is giving tacit approval to the Affordable Care Act.  I’m just telling you where I stand.”

Orrick: “Mr. Commissioner, I vote with you on that.  That exactly makes my point.”  Hudgens: “Well, that’s rare, isn’t it!”   As politicians of different political feathers, Orrock and Hudgens agreed that they seldom agree but on this issue, both said Georgia should move toward implementation of a health insurance exchange.

If upheld by the Supreme Court, the health care reform law requires that states must create health insurance exchanges before 2014 or the federal government will impose an exchange.

The National Conference on State Legislatures maintains a comprehensive website that says 13 states have enacted exchange laws.  Nineteen states including Georgia considered but did not pass legislation. Bills are pending in five states and the District of Columbia.

Governor Nathan Deal did not discuss health insurance exchanges Tuesday during his State of the State address.  Last month an advisory committee created by the General Assembly said Georgia should establish a health insurance marketplace authority, but it did not call for 2012 legislation.  Cindy Zeldin, who is executive director of Georgians for a Healthy Future, wrote the committee minority report that recommended moving forward with an exchange now.

“Georgia has an unprecedented opportunity to address our high rate of uninsurance by developing a health insurance exchange for individual consumers,” Zeldin wrote.  “Federal dollars and resources are on the table to help us craft a Georgia solution.  We should seize this opportunity.”  Nearly two million Georgia residents have no health insurance.

Georgians for a Healthy Future unveiled a seven-point legislative agenda that includes trying to plug an insurance hole created by federal health care reform.  Health insurance policies written only for children have dried up in the state’s insurance marketplace.

“This is a market in which parents would buy a health insurance plan for their child but not themselves,” Zeldin told the Public Policy Foundation.  “It might happen if the parent has a plan at work but is not offered dependent coverage, or if they cannot afford a family policy.”

Zeldin said companies pulled out of the child only market after health care reform mandated that they could not deny coverage to children because of pre-existing conditions.  Zeldin said her organization and others have been trying to identify the number of children affected in Georgia.

“We would like to follow the footsteps of several other states that have addressed this issue by passing legislation requiring insurance companies” to offer child only coverage, Zeldin said.  Colorado passed a bill for that purpose.

There may be bipartisan support.  Conference panelist Rep. Richard Smith, who is Republican chair of the House Insurance Committee, cited stand alone child policies and giving Georgians the right to purchase health insurance across state lines as two possible priorities for the 2012 General Assembly.

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

January 12, 2012 Posted by | Uncategorized | , , , , , | Leave a comment

Deal, Olens Praise Rejection of ObamaCare Individual Mandate

Mike Klein

Georgia’s governor and attorney general said Friday’s decision by the federal appeals court in Atlanta that strikes down the federal health care reform individual mandate is “a huge step toward victory” but ultimately, ObamaCare will be decided by the U.S. Supreme Court.

Governor Nathan Deal and Attorney General Sam Olens issued a statement about two hours after the 11th Circuit Court of Appeals in Atlanta released its 2-to-1 opinion:

“We applaud today’s ruling from the United States Court of Appeals for the 11th Circuit striking down the individual mandate as ‘a wholly novel and potentially unbounded assertion of congressional authority.’ Today’s ruling recognizes the core principles of our federalist system and reminds an over-reaching federal government that the Constitution applies to it, too.

“We do not, however, agree with all findings in the decision. Unlike the 11th Circuit, we believe that the Obama administration should be taken at its word that the individual mandate is crucial to the whole bill, and that the whole bill should be struck down.

Governor Nathan Deal

Attorney General Sam Olens

“But this much is certain: Federal health care reform is on life support, and this case will be decided by the Supreme Court of the United States. Today is a huge step toward victory, but it is also a day that emphasizes the importance of the work ahead.”

Friday’s decision came in a case filed by Florida and joined by 25 states including Georgia. In January, federal judge Roger Vinson ruled all of federal health reform was unconstitutional.  The federal government appealed.  Friday’s decision rejected only the individual mandate.

Chief Judge Joel Dubina and Circuit Judge Frank Hull found “the individual mandate contained in the Act exceeds Congress’s enumerated commerce power.”

Their majority opinion said, “What Congress cannot do under the Commerce Clause is mandate that individuals enter into contracts with private insurance companies for the purchase of an expensive product from the time they are born until the time they die,” the opinion said.

Judge Stanley Marcus disagreed in dissent.  He wrote that the majority opinion ignored the “undeniable fact that Congress’ commerce power has grown exponentially over the past two centuries, and is now generally accepted as having afforded Congress the authority to create rules regulating large areas of our national economy.”

Obama administration options include asking the complete 11th Circuit Court to review the opinion, or it could appeal directly to the U.S. Supreme Court.

Three federal appeals court cases are working their way toward a Supreme Court resolution. The court in Cincinnati upheld ObamaCare and court in Richmond has yet to issue its opinion.  A decision by the U.S. Supreme Court would come during the 2012 presidential election year.

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

August 12, 2011 Posted by | Uncategorized | , , , , , | Leave a comment