Premium increase at 20%; health cuts eased

Print Friendly and PDF By: Andy Miller Published: Mar 10, 2011

The health care budget news for many people in Georgia took a turn for the better Thursday.

State employees and teachers, however, face a 20 percent increase in their health care premiums under a fiscal 2012 budget passed by the House Appropriations Committee.

That hike in premiums will help fill a deficit in the State Health Benefit Plan that the Department of Community Health estimates at $250 million to $300 million. The plan covers more than 650,000 state employees, teachers, school personnel, dependents and retirees.

Gov. Nathan Deal’s original proposed increase for those workers was 10 percent, but that was before the recent news of the financial hole in the health benefit plan.

Meanwhile, the Appropriations Committee budget – which goes to the House floor for a vote – gave some relief to doctors, dentists, nursing homes and other medical providers, who were facing a 1 percent cut in their payments for treating Medicaid and PeachCare patients.

The panel lowered their reimbursement cut to 0.5 percent.

In other changes, the committee restored dental, podiatry and vision benefits for adults on Medicaid, with $7 million in funding.

More money was put into a state program to identify and help young children with developmental disabilities, and for public health programs.

The budget changes are a mixed bag, said Tim Sweeney, senior health care analyst at the Georgia Budget and Policy Institute, an education and research organization.

Sweeney said positive budget changes included the improved pay rates for medical providers and restored Medicaid benefits for adults. He also praised the panel’s switch of Medicaid eligibility renewals from six months to a full year.

But Sweeney added that the House panel removed nearly $100 million from Medicaid to fund the State Health Benefit Plan and to pay interest on the money that Georgia has borrowed for unemployment compensation.

“They’re creating a Medicaid funding gap,’’ Sweeney said. “They will have to solve it next year.’’

The Appropriations budget restored funding for programs for seniors as well. The panel eliminated a proposed $1 million reduction in state funding for Meals on Wheels. The money would supply about 138,000 additional  meals a year, which consumers advocates said would affect hundreds of people.

And money was put back into the budget for respite programs to help caregivers of seniors.

Funding for these services ‘’helps people stay in their homes and out of nursing homes,‘’ said Kathy Floyd of AARP Georgia.

Department of Community Health officials said that the state employees health plan shortfall had several causes, including rising medical costs.

Another factor is the fact that state employees are retiring at a faster rate, and with many job vacancies going unfilled, there are fewer young, healthy workers paying into the system, the AJC’s James Salzer notes.

The AJC article also points out that former Gov. Sonny Perdue and state lawmakers used the reserves in the employee benefits plan to bolster past state budgets.

The premium increase comes at a time when state employees and educators have not seen recent cost-of-living raises – and have had furloughs.

Community Health Commissioner David Cook expressed concern about the premium increases for state employees as well as the cuts in payments to medical providers.

If doctors and other providers are not paid enough to take care of Medicaid and PeachCare patients, they may drop out of the programs, Cook said.

“I would like to get to the point where we’re raising the [reimbursement] rates,’’ he said.

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