How gloomy is the prognosis for Medicaid in Georgia?

By TOM CRAWFORD | Published: JUNE 18, 2012

Revenue shortfalls have long been a fact of life for Georgia’s Medicaid program, and the problem is not going away anytime soon.

In a financial briefing for the state Board of Community Health last week, Vince Harris noted that major money shortages in Medicaid will need to addressed in the current state budget and for the next three or four fiscal years after that.

Harris, the chief financial officer for the Department of Community Health (DCH), said the projected deficit for the remainder of fiscal year 2012, which ends June 30, is $81.7 million for Medicaid and $8.9 million for PeachCare, a total deficit of $90.6 million.

The deficit is projected to expand in fiscal year 2013 to $295.1 million for Medicaid and $13.1 million for PeachCare – a total of $308.2 million.

“The budget numbers we have are pretty daunting,” DCH Commissioner David Cook said. “We will need $100 million in the supplemental budget just to catch up with this year.”

Beyond the upcoming fiscal year, the deficit could be aggravated even more by the requirement of the federal Affordable Care Act that Medicaid be expanded to cover an estimated 650,000 additional people, Harris noted.

That would add an estimated $79.6 million to the Medicaid shortfall for fiscal year 2014 and $224.9 million in fiscal year 2015.

However, the U.S. Supreme Court is expected to rule very soon on the constitutionality of the federal healthcare act, also known as Obamacare.

If a majority of the Supreme Court, as many legal observers expect, rules the act to be unconstitutional, then those numbers for fiscal years 2014 and 2015 presumably would no longer be a problem for Georgia.

Medicaid now provides health insurance coverage for about 1.6 million low-income Georgians. About 25 percent of that population consists of people in the ABD (aged, blind, disabled) category – but ABD recipients account for 54 percent of the program’s expenditures, Harris said.

In the proposed redesign of the Medicaid program, DCH is expected to move the ABD recipients away from fee-for-service coverage and into managed care programs administered by the CMOs that coordinate care for other Medicaid participants.

“There’s pretty broad agreement that when you coordinate care, you not only get better care but you save money,” Cook said.

The economic downturn of the last four years has had a significant impact on the percentage of the state budget that is spent on Medicaid services.

In fiscal year 2007, Medicaid expenditures made up 14.3 percent of total state revenues (excluding lottery funds and motor fuel taxes), Harris said.

Today, Medicaid accounts for 17 to 18 percent of the yearly budget, Harris said. DCH spends more than $2.7 billion a year in state funds on Medicaid.

© 2012 by The Georgia Report