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Governor Deal at Eggs: No Such Thing as “Free Health Care”

By Mike Klein

Mike Klein, Editor, Georgia Public Policy Foundation

Mike Klein, Editor, Georgia Public Policy Foundation

Governor Nathan Deal said the state Department of Community Health has been told to reduce its amended current fiscal year budget by 3 percent and then find 5 percent more in new cuts next year to help the state absorb Medicaid costs that continue to escalate.  The state faces a Medicaid deficit that will approach $800 million during the next 18 months of its fiscal cycle.

Deal devoted nearly his entire speech to health care expense when he addressed the Georgia Chamber of Commerce annual “Eggs and Issues” breakfast Wednesday at the World Congress Center in Atlanta.   The Governor also suggested folks who cannot attend Thursday morning’s State of the State address should monitor his “Tweeter” account.  Deal will announce his budget during the speech, scheduled for 11:00 a.m. at the State Capitol.

“Georgians who have already received a paycheck this January have no doubt noticed that their payroll taxes went up and their take-home salary went down,” Deal said.  “This is the cost of entitlements.  If you think your taxes went up a lot this month, just wait till we have to pay for ‘free health care.’  Free never cost so much.”

The push is on to quickly approve a Medicaid funding fix bill proposed by the Governor with an initial Senate floor vote perhaps this week.  Lt. Governor Casey Cagle and House Speaker David Ralston echoed their support for the governor’s bill that would give the Community Health board the authority to continue the hospital provider fee that would otherwise sunset in June.

The fee paid by all Georgia hospitals based on annual revenue is used to draw down federal dollars that are redistributed to hospitals that serve Medicaid patients.  The General Assembly enacted the fee three years ago to address a rapidly developing shortage in Medicaid funds caused by increased demand for services.  Deal said 12-to-14 hospitals would face closure if the provider fee is not continued.  DCH imposes a similar nursing home industry fee.

Governor Nathan Deal

Governor Nathan Deal

“In fact, we are one of 47 states that have either a nursing home or hospital provider fee or both,” Deal said.  The governor said “it makes sense to me” that DCH should have authority over both fees “for maximum efficiency and effectiveness.”  The move also means that state lawmakers would be spared having to vote to continue an expiring fee or impose a new one.

Deal said DCH has identified $109 million in cost-savings. “But this hardly covers the additional nearly $500 million in needed funds caused by growth in Medicaid expenses during the same time frame,” Deal said.  “This means we must make necessary cuts in other agencies and core functions of government since raising taxes is not an option I will accept!”

The governor is no fan or friend to the federal health care reform law known as Obamacare.

During the past several months the Deal administration said it will not expand Medicaid eligibility starting in 2014 because the state cannot afford more than $2.5 billion that it currently spends annually on Medicaid.  The federal government pays about $5 billion annually. Georgia anticipates its share of Medicaid costs will increase at least $1.7 billion over the next ten years.

Deal said the federal health care reform law will add $106 million to the cost of state-provided health care benefits for active and retired employees starting in 2014.  He also said Georgia will be assessed a new $35 million insurance tax starting in 2015.  About 13 percent of all state budget dollars currently pay for Medicaid or the state children’s health insurance programs.

“The irony to me is that there are those in the medical community who are urging the expansion of the Medicaid program while at the same time, they are seeing more and more medical providers refusing to accept Medicaid patients,” Deal said.  “If you are losing money now how do you reconcile the number of patients on whom you will lose even more money?”

Georgia also said it will not create a state health insurance exchange, as envisioned in the federal health care reform law.  “I see no benefit to our citizens to have a program bearing the name of the State of Georgia over which our elected or appointed officials have little if any say so,” Deal said.  “While many federal programs come with strings attached, these strings turn states into marionettes to be manipulated by federal bureaucrats.”

As for “Tweeter,” the Governor noted, “My staff tells me that I am really getting into the modern age.   You can go to my Tweeter account!” for updates on the State of the State address.  The address will be carried live Thursday on General Assembly and Georgia Public Broadcasting websites. GPTV will broadcast the State of the State address and the Democratic leadership response in their entirety at 7:00 p.m. on the legislative program “Lawmakers.”

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