Georgia keeps Medicaid, PeachCare intact

As Georgia’s money problems cause public services to be slashed, state health officials announced a plan Thursday to preserve intact two of the most important programs for needy people – Medicaid and PeachCare for Kids – for the next two years.

Social service advocates celebrated the news that the state had no plans to cut services or restrict eligibility for the two government insurance programs. “We are blessed that the governor and Commissioner Medows have their priorities in order,” said Carolyn Wetzel, a board member with Healthy Mothers, Healthy Babies Coalition of Georgia. “They are going to put the kids first.”

Community Health Commissioner Rhonda Medows said preserving these programs was vitally important since struggling people “need our help the most.”

Thursday’s recommendations by the state Community Health board still must receive approvals from the state Legislature and Gov. Sonny Perdue.

Health advocates said keeping the programs intact is even more important in these tough economic times when more people might need public assistance.

About 1.4 million Georgians participate in Medicaid, the premiere government insurance programs for the poor, and in PeachCare, the program for children of needy families that earn too much to qualify for Medicaid. The programs are funded by state and federal sources.

Gov. Sonny Perdue has instructed state department heads to submit budget recommendations for this year and next year with at least 6 percent reductions in each year; the planned Medicaid cut is 5 percent. Consequently, the state Department of Community Health had to cut about $114 million in each year.

Medows said a roughly $53 million surplus, attained in part by better management of the Medicaid system, would cover part of first year’s reduction.

The most controversial savings, though, would come through delaying an increase in Medicaid rates paid to hospitals and doctors until the next fiscal year starts in July. Hospitals and doctors say the planned increases are desperately needed because current Medicaid rates of payment do not cover the costs of providing care.

The rate increases would have spread millions of extra state dollars around the state, in some cases helping financially struggling hospitals such as Grady Memorial Hospital.

Tish Towns, Grady vice president of government relations, said the hospital, which ran a $43 million deficit last year, had expected a bump of $5 million to $10 million from what was expected to be a rate increase of about 2.5 percent.

Physicians who provide care to Medicaid patients will also feel the pain, said David Cook, executive director of the Medical Association of Georgia. He feared the funding delay would turn into a cut.

“The postponement of this will make it less likely that physicians will treat Medicaid patients,” Cook said.

Department of Community Health officials said the $114 million reduction demanded in the next budget year, beginning July 2009, would come largely from a new revenue source. A federal law allows the state to charge fees to commercial insurance companies that have managed-care plans, and this is expected to raise $112 million for Georgia, with the balance from other sources.

On Thursday, Melissa Hilliard, whose 3-year-old daughter receives Medicaid for her epilepsy and behavior disorders, said she was relieved that the Community Health board wanted to preserve the program for two years.

“The big concern is always whether there will be enough funding for my daughter,” said the Stone Mountain mother. “That means that for two years, her medications will be available, and I won’t have to stress about paying for them. And I won’t have to stress about her check-ups and immunizations.”