Georgia legislators to face tough health-care decisions

Both issues have significant implications for the state's consumers: The insurance marketplace in Georgia will be heavily shaped by the way the health care law is implemented. And what Medicaid pays has implications beyond just those who are covered by the program. The financial stability of physicians and hospitals is heavily influenced by the Medicaid program, and if fewer doctors take Medicaid, that will lead to more crowded emergency rooms for everyone.

"We all have a lot on the line as people who use the health system," said Linda Lowe, a health policy specialist for Georgia Legal Services.

While dealing with the state's bill for Medicaid may prove to be a less contentious discussion than the debate over the federal health care law, it may present a more daunting challenge.

Medicaid, the health insurance program for poor families, and PeachCare, the program for low-income children, cover about 1.6 million Georgians and will cost the state about $1.7 billion this fiscal year. The federal government kicks in an additional $5.12 billion for the programs. Doctors say they already lose money on Medicaid patients. Further cuts could create a crippling access issue.

"That's far and away the biggest single [health care] issue we're going to be dealing with," said state Rep. Mickey Channell, R-Greensboro, one of the Capitol's leading experts on health matters.

While the federal health law and Medicaid should dominate this year's legislative agenda on health matters, lawmakers are also expected to consider the state's rules for long-term care facilities, stem cell research, trauma care funding and the hospital bed tax.

Sen. Renee Unterman, R-Buford, calls this year's session "pivotal" for health care. "There's a demand for service and so much ambiguity about how that service is going to be delivered," said Unterman, a veteran member of the Senate's Health and Human Services Committee.

When it comes to the federal health care law, Georgia's key decision will be whether to set up its own "insurance exchange."

Beginning in 2014, many consumers will rely on this exchange to buy their insurance coverage, find out whether they are eligible for a subsidy or qualify for free care on Medicaid. The state can set up the exchange, thereby determining how many insurers can participate and what kind of requirements and restrictions are placed on the plans sold on the exchange. If Georgia is to meet the federal deadlines for running its exchange, most experts say lawmakers need to start crafting the necessary legislation this year.

Unterman said her early conversations with legislators indicate that many lawmakers worry that officially planning for a Georgia-run exchange could undermine Georgia's ongoing effort to challenge the federal law.

But other lawmakers feel strongly that ignoring the opportunity will just create an even less desirable outcome for Georgians.

"If we don't come up with our own insurance exchange, the default is the federal government will do it," Channell said, "and we certainly don't want that to happen."

David Merritt, a health policy expert at Newt Gingrich's Center for Health Transformation, said Georgia lawmakers need to remember that a conservative administration such as Gov.-elect Nathan Deal's would put together a better exchange for Georgia consumers than a member of the Obama administration.

"State officials know their constituents better than bureaucrats in Washington," Merritt said. "So if something is going to be created in a state, it's better for state officials to do it."

While Georgia lawmakers may take no action on Georgia's role in implementing the federal health care law, the state's budget shortfall will force a discussion of Medicaid spending. Medicaid consumes about 1 in 10 state dollars.

Federal law restricts the changes states can make in the program in terms of who is eligible and what is covered, so paying providers less is the only way for the state to save significant money on the program. Many Georgia doctors already refuse to take Medicaid, and cutting payments further could make that worse.

"Our concern is that right now what Medicaid pays does not cover the cost of providing the care," said Donald J. Palmisano Jr., executive director of the Medical Association of Georgia.

If the significant cuts go through, Palmisano said, "I think what you will see is access to care issues in rural areas and also in some underserved urban areas."

It is more difficult for many doctors to take Medicaid these days because they are also struggling to cover costs with Medicare patients while dealing with some reductions from private insurance as well.

"Physicians are getting squeezed in all areas of their practice," Palmisano said.

Hospitals are also struggling, as the recession has brought more uninsured patients into their emergency rooms and attracted fewer patients for elective procedures.

"Any time you have a significant change in the Medicaid payment system, that has a dramatic impact on the bottom line of hospitals," said Kevin Bloye, a spokesman for the Georgia Hospital Association.

Russ Toal, a former commissioner of the Georgia Department of Community Health and now a public health professor at Georgia Southern University, said a significant decline in the number of doctors taking Medicaid could cripple the program.

"Without a vibrant provider community, you don't have a Medicaid program," Toal said.

Cuts to doctors could even increase overall expenses, he said.

"If they start making major cuts to some of the key professionals like physicians, they will end up with these folks in the hospital and costing the state even more money," Toal said. "We have to be careful about where the reductions occur."