Deal says he won’t pursue Medicaid expansion

Print Friendly and PDF By: Andy Miller Published: Aug 28, 2012

Gov. Nathan Deal, switching from a wait-and-see stance, told reporters at the Republican National Convention in Tampa that he has no intention of expanding Medicaid in Georgia as outlined under the Affordable Care Act.

Deal had indicated in June that he wanted to wait until after the November elections to make a decision on the expansion, which would add more than 600,000 Georgians to the Medicaid rolls, beginning in 2014.

But according to the AJC’s Kyle Wingfield, Deal told reporters Tuesday that  expansion is off the table.

“No, I do not have any intentions of expanding Medicaid,’’ Deal said. “I think that is something our state cannot afford. And even though the federal government promises to pay 100 percent for the first three years and 90 percent thereafter, I think it is probably unrealistic to expect that promise to be fulfilled in the long term, simply because of the financial status that the federal government is in.

“I am told that that expansion for the federal government will be somewhere in the neighborhood of $100 billion a year. I quite honestly don’t think Congress can find an extra $100 billion a year.’’

Industry experts have viewed the state’s determination whether to expand Medicaid as perhaps Georgia’s biggest decision ever on health care.

Deal joined fellow Republican governors Rick Scott of Florida, Rick Perry of Texas and Bobby Jindal of Louisiana in saying they would reject the expansion.

Georgia’s Medicaid program covers 1.6 million poor and disabled residents.  It currently confronts a major shortfall in funding.

Medicaid expansion had become optional to states in part of  the Supreme Court’s ruling on the health reform law in June.

“I think for the time being, assuming that things are as they currently are, I would not have any intention of advocating expanding our Medicaid rolls,’’ Deal told reporters. “The reason for saying wait until November is to see whether or not there are going to be legislative changes at the federal level. And we do have a time frame for making the decision that I think, especially on the exchanges, we have just a few days after the election in order to make a final determination on that.’’

He was referring to an upcoming state decision on whether to create its own health insurance exchange or let the federal government run one in Georgia. These virtual marketplaces for individuals and small businesses to buy coverage are required under the Affordable Care Act.

The AJC recently reported that under an expansion, the federal health care law would inject  $40 billion into Georgia’s health care economy over 10 years. That money would cycle through the state’s economy and have an overall economic impact of $72 billion between 2014 and 2023, Jeff Humphreys, director of the University of Georgia’s Selig Center for Economic Growth, told the AJC.

Deal, though, cited a cost estimate of Georgia’s share of the Medicaid expansion at  $4.5 billion over a 10-year period.

“We obviously do not have that kind of money,” he told the AJC, WXIA and Politico on Tuesday.

A consumer advocacy group, Georgians for a Healthy Future, called the Deal decision “very disappointing.’’

“This is a huge setback,’’ said Cindy Zeldin, the group’s executive director. She cited the need to address the problem of covering Georgia’s 2 million uninsured residents, one of the highest rates in the nation.

But Zeldin also noted that federal officials have given states the flexibility to expand at a later date.

“We could come in the second year,’’ she said. She added that a coalition of groups representing consumers, medical providers and the health industry can still work to convince state lawmakers about the benefits of Medicaid expansion.

Gerard Anderson, director of the Johns Hopkins Center for Hospital Finance and Management, told Georgia Health News this week that states that decide against expanding ‘’will essentially lose twice’’ – not getting the federal money for expansion, and also losing federal funding for hospitals that treat a large number of poor patients.

And Grady CEO John Haupert said that losing the “disproportionate share’’ money would cost the Atlanta safety-net hospital $45 million a year.

In his interview with reporters, Deal sounded supportive of changing to a ‘’block grant’’ approach to Medicaid, where a state would get a fixed amount of federal money for the program and gain the flexibility of deciding how to spend it.

Kevin Bloye, a Georgia Hospital Association vice president, said Tuesday, “We strongly agree with the governor that the Medicaid program needs to be reformed, and we believe that the block grant approach is a sensible way to address this challenge.”

Georgia’s Medicaid financial arithmetic already looks daunting.

Deal’s Office of Planning and Budget recently ordered most state agencies to cut spending 3 percent in the current fiscal year and in fiscal 2014. For Medicaid and PeachCare, though, the ordered reduction in 2014 is 5 percent.

The Department of Community Health said last week Medicaid will have budget cuts of $60 million this fiscal year and $100 million in fiscal 2014.

The current Medicaid deficit is $355 million, but with budget cuts, the amount of money needed increases to $415 million this fiscal year. Next fiscal year, the amount needed to cover shortfall and cuts balloons to $492 million.

State officials say reasons for the Medicaid shortfall include the Legislature underfunding the program by $96 million; the agency delaying one month of payments to managed care companies; and continued program growth.

Tim Sweeney of the Georgia Budget and Policy Institute said in an interview with GHN last week that the Medicaid funding shortfall ‘’has been years in the making.’’

Georgia spends less per Medicaid enrollee than all but one other state, he said.

 

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