State health plan facing tough fiscal choices

Print Friendly and PDF By: Andy Miller Published: Jul 14, 2011

The bad financial news keeps rolling in for the State Health Benefit Plan, which covers about 700,000 employees, teachers, school personnel, retirees and dependents.

Currently, the employee plan has $50 million in reserve — enough to pay claims for about six days, state officials said Thursday. A healthy reserve typically has the funds to cover a month or two of claims.

The Georgia Department of Community Health board passed a resolution Thursday authorizing earlier payments from the Department of Education into the health plan. Vince Harris, the Community Health chief financial officer, said that without those earlier payments, the plan would go into deficit this month.

Yet despite the early payments, the plan still projects a deficit a year from now of $165 million — a higher figure than was forecast recently.

Community Health officials said they will soon present Gov. Nathan Deal with several options for shoring up the health plan. Possibilities include raising employee premiums and changing the benefits provided.

Members of the State Health Benefit Plan (SHBP) are already expecting a 10 percent increase in their health insurance premiums beginning in January. That’s on top of teachers and state employees not getting cost-of-living raises.

Harris noted that the federal government is giving the state less than anticipated in early retiree program funding under the health reform law.

Other reasons for the financial plight of the SHBP include the continuing rise in costs of medical care; an increase in the number of retirees in the plan; and the fact there are fewer younger, healthier workers paying into the plan.

“We are managing with declining revenues and increasing expenditures,’’ Harris told the Community Health board.

In the past, the Georgia General Assembly has sometimes injected funds to shore up the employee health plan. But the previous governor, Sonny Perdue, and lawmakers used SHBP reserve funds to bolster past state budgets.

Separately, the Community Health board also ratified a 0.5 percent cut in reimbursements to physicians, dentists and some other providers who treat Medicaid and PeachCare patients.

Board members expressed concern about the pay cut’s effect on the supply of medical providers willing to treat these patients.

And the board gave initial approval to raising copays for Medicaid beneficiaries, and launching — for the first time — copays for children on PeachCare who are 6 years of age and older.

Medicaid is a program for the poor, their children and some people with disabilities. PeachCare is a program for children whose parents have low incomes but earn too much to qualify the children for Medicaid.

Joann Yoon of Voices for Georgia’s Children, an advocacy group, said she is concerned that copays may deter parents from seeking care for their children on PeachCare, especially ‘’families that are the most price-sensitive.’’

Proposed copays, which will be the same for both Medicaid and PeachCare, include $25 for a hospitalization and $3.74 for an outpatient hospital service. Medical providers will have to collect the fees.

The new copays for Medicaid and PeachCare are expected to save the state $4.2 million.

 

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  • Pundit

    Why doctors think the Republicans are their friends is a mystery to me.

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