State Medicaid Program Facing More Than $400 Million in Cuts

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To help close its budget deficit, the board of the Department of Community Health voted to  increase premium payments for state employees by 9.5 percent.

For the agency, the measure will likely be the first of many.

In addition to the state employee plan, DCH oversees Peachcare for Kids, which provides coverage for low-income children, and Medicaid, the health program for low-income adults. Medicaid alone is running a $350 million deficit heading into 2013. Add that to a state-ordered three percent cut and Medicaid will need to cut more than $415 million in revenue for next year.

“We’re currently at a situation where it’s difficult to fund the plan,” said DCH Commissioner David Cook.

Cook has no specifics about how the agency will address the deficit. He says DCH is working with the governor’s budget office.

Cook did say the agency is trying to gain more flexibility from the federal government in terms of Medicaid eligibility and program benefits.

“I think there are some opportunities there, perhaps if we get a little bit more flexibility, to get a little more structural change, that’ll put the plan on a more sustainable path going forward.”

As the agency moves forward, Cook says a priority will be avoiding reductions in provider payments.

Health analyst Tim Sweeney of the Georgia Budget and Policy Institute says no matter how the agency proceeds, the larger issue remains inadequate state funding.

“Georgia spends less per enrollee than nearly any other state. We have one of the highest rates of residents living without health insurance. Frankly it’s time to stop proposing more cuts to the program because our revenue structure can’t take it and it’s time to make the decisions so that we can invest in these programs.”

Sweeney wants state officials to take a “balanced approach that includes new revenues.”

Beyond 2013, the governor is calling for an additional two percent cut in Medicaid and Peachcare. That would push DCH’s deficit for 2014 to nearly a half billion. Agency officials say there will be public meetings over the coming months to address the deficit. 

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