Medicaid to grow dramatically under health law

Georgia’s dismal economy pushed the state’s Medicaid population up 8.8 percent by the end of 2009 from a year earlier, an increase slightly above the national average, a report released Thursday found.

The health insurance plan for the poor added 99,500 children and nearly 18,000 adults to Georgia's program, as the state struggled to cover its escalating costs.  But that's a relatively small number compared with the enormous wave that is coming: Under the health care overhaul, Georgia's current Medicaid population of about 1.4 million is expected to grow by at least 650,000 between 2014 and 2019.

The federal government will cover most of the additional cost, but not all of it. In addition, state officials worry that there will not be enough doctors to treat these newly insured patients.

Thursday's report by the Kaiser Family Foundation's Commission on Medicaid and the Uninsured depicted a system in Georgia that is already struggling, as in other states. The states were able to prop up their Medicaid programs with more than $100 billion in federal aid since fall 2008, but that federal money is drying up.

“The recession swamped state budgets and Medicaid programs, but with the extra federal aid, Medicaid helped millions of additional people as intended during tough times,” said Diane Rowland, executive director of the Kaiser Commission on Medicaid and the Uninsured. "States will face new challenges as the federal aid winds down and as they prepare for health reform.”

A massive expansion of the Medicaid program is central to the national health care overhaul.

The number of Georgians who lacked health insurance rose to 1.9 million people last year – about 20 percent of the state’s population. Under the health care law, large numbers of those uninsured people will be newly eligible for Medicaid, and others will qualify for federal subsidies to help them pay for private insurance.

The new health care law calls for extending Medicaid to anyone whose income is below 133 percent of the federal poverty level. Subsidies to help pay for private insurance will be available for anyone making 400 percent of the poverty level or less. The federal poverty level this year is $10,830 for a single person and $22,050 for a family of four.

The federal government usually covers about 65 percent of the cost of providing care to Georgia's Medicaid recipients. The feds will pick up 100 percent of covering the new enrollees in the first three years of health reform, and then phase down to 90 percent of the costs of the new enrollees by 2020.

State officials are concerned about how much the program will cost, even with the federal government covering the bulk of the Medicaid bill. State Medicaid directors across the country are struggling with the workload and costs associated with setting up the complicated system that the health care law prescribes to direct people either to Medicaid or private insurance coverage that will be offered through new health insurance "exchanges." That system must be ready to go by 2014.

"One of the major components that was not addressed in health care reform is the administrative costs and the technology costs of implementing health care reform and those costs are not going to be unsubstantial," said Carol Steckel, Alabama's Medicaid chief who also heads the National Association of Medicaid Directors.

In addition to cost, state officials are trying to figure out who will care for all the new patients.

Many doctors already refuse to take Medicaid patients, and that number may grow if the state makes significant cuts to doctor payments during the next two years, as proposed in the tough budget climate. Medicaid currently pays doctors about 76 percent of what Medicare, the federal program for the elderly, pays, according to the Medical Association of Georgia. Private insurance generally pays more than both Medicare and Medicaid.

"Every time a physician takes a Medicaid patient, they lose money," said Donald J. Palmisano, Jr., director of government relations for the Medical Association of Georgia.

The association said that 44 percent of Georgia doctors who responded to a recent association survey said they would stop seeing Medicaid patients if the significant cuts under consideration by the state are approved.

"There is no question that these cuts are going to have a major negative impact on access and on doctors' incomes at the very same time we're going to be bringing on these additional people [to Medicaid]," said Russ Toal, a former commissioner of the Georgia Department of Community Health who is now a public health professor at Georgia Southern University. "That is a huge issue and it's not a problem that is unique to Georgia."

By moving millions of uninsured Americans onto Medicaid, the health care law seeks to solve the myriad problems created when an uninsured person gets sick. Hospital emergency rooms are already burdened with people who have no coverage, and the hospital ends up marking up the bills of patients with private insurance to cover those who can't pay.

"The hospitals are taking a beating on [the uninsured] population in their emergency rooms and a lot of folks who are uninsured are having trouble getting a reliable source of care," said Toal, the former community health commissioner. He said that expanding Medicaid will address these problems if doctors are available to see the new patients.

Without an increase in the number of doctors taking Medicaid, hospital emergency rooms will continue to be crowded, said Palmisano, of the medical association.

Dr. Gary Richter, an Atlanta gastroenterologist, said he sees Medicaid patients in his practice because he is personally committed to it. But he said doctors around the state have to consider the number of Medicaid patients they can take, if they want their practices to be financially viable. If more doctors refuse Medicaid, that places an unsustainable burden on the remaining doctors who do take it, he said.

Increasing payments to primary care doctors would help solve the problem while still saving money overall, he said. "If you want to keep patients out of the hospital," Richter said, "pay the primary care physician enough money to see them."

Atlanta's Grady Memorial Hospital provided about $200 million in uncompensated care in the 12-month period ending in March. About 40 percent of Grady's patients are uninsured.

Grady has primary care centers at the hospital and in clinic locations throughout the community. "We have every intention of expanding the number of neighborhood health centers we have," said Grady spokesman Matt Gove. "As you move toward health reform, the more you can treat patients in the community the more successful you're going to be."

Gove said Grady will always welcome Medicaid patients.

Meet the reporter

Carrie Teegardin is a veteran reporter for The Atlanta Journal-Constitution who was recently assigned to the health care beat. In her 21 years at the AJC, Teegardin has written articles on a wide range of topics and has been the recipient of numerous state and national awards. She worked on the newspaper's "Borrower Beware" series, a 2006 winner of the Gerald Loeb Award, the nation's top honor for financial journalism. A graduate of Duke University, Teegardin last year was named the Atlanta Press Club's Journalist of the Year.