Some state workers face double-digit health insurance premium hikes next year as health officials try to close a two-year shortfall of $500 million in the state employee benefits program.
Premiums will rise about 9.5 percent -- though that will vary widely depending on the type of plan and tier an employee chooses with some seeing spikes up to 30 percent, officials with the Georgia Department of Community Health said at a board meeting Thursday.
The agency also is being asked by the governor to cut roughly $160 million over the next couple of years from its Medicaid and PeachCare for Kids programs as part of statewide budget cuts. The programs provide health coverage for 1.7 million Georgians, mostly pregnant women and children.
"This is going to be a difficult budget year," department Commissioner David Cook said, adding he does not plan to lower reimbursements for doctors.
Officials have made widespread changes to the state health benefits program to battle the deficit in recent years -- including creating a wellness program and raising premiums multiple times. This year they rose 11 or 17 percent depending on the plan.
Some 2 percent of next year's increase is a result of the Affordable Care Act, which requires covering 100 percent of certain preventive care services, Cook said. Workers will also see a jump in deductibles and out-of-pocket costs. The plan covers nearly 665,000 Georgians.
Meanwhile, salaries have remained flat, and furlough days mean workers make less money than two or three years ago, said Tim Callahan, a spokesman for the Professional Association of Georgia Educators.
Callahan said it's a bitter pill for state workers. But he also understands the state's financial situation in the wake of the recession and ever-increasing health care costs.
"There are no villains here. There are just very large economic forces," Callahan said. "There's not a lot of salvation in sight."
Employees who cover spouses under the plan will see the biggest premium hikes, said Trudie Nacin, head of the state health benefit plan. Spouse coverage previously was subsidized by the state. Overall, increases will range from roughly 1.5 percent up to 30 percent.
With the premium hikes and other changes, the state expects to end fiscal 2013 with a $29.3 million balance in the benefits plan. It forecasts a $7.9 million deficit the following year, which the agency will request in its budget proposal to the governor. That's a big improvement from the two-year $815 million deficit the plan faced last year.
Cook did not say how the department plans to deal with the Medicaid shortfall, though it will look at patient benefits and how they use services.
Including the new budget cuts, Medicaid and PeachCare face a total shortfall of more than $900 million.
"We're currently in a situation where it's difficult to fund the current plan," Cook said, who has called for more flexibility from the federal government on how to operate the program.
Cutting Medicaid services and benefits could hurt patients, said Tim Sweeney, a health care analyst with the nonpartisan Georgia Budget and Policy Institute. The state legislature has long underfunded the program with Georgia having the second lowest funded Medicaid program in the nation, Sweeney said.
"Blaming D.C. for the financial problems facing Georgia's Medicaid program is unfair," he said. "It seems like more of an attempt to avoid the reality that our inadequate funding...is causing shortfalls."
Meanwhile, the state still plans to wait until the November election before deciding on whether to expand the Medicaid program under the health care law. The state estimates expansion would add 650,000 low-income Georgians, costing the state $4 billion over 10 years.
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