$300 million boost sought for Georgia’s state health care programs

State of Georgia Medicaid spending

Fiscal 2007

$1.735 billion

Fiscal 2008

$1.819 billion

Fiscal 2009

$1.855 billion

Fiscal 2010

$1.613 billion

Fiscal 2011

$1.792 billion

Fiscal 2012

$2.456 billion

Fiscal 2013

$2.533 billion

Fiscal 2014

$2.703 billion

Fiscal 2015

$2.753 billion

Fiscal 2016*

$2.829 billion

Fiscal 2017*

$3.131 billion

Fiscal 2018**

$3.231 billion


** Budget request. Doesn’t included what may be added in next year’s supplemental budget

Source: Department of Community Health

The state agency that provides health care to one in four Georgians will ask the General Assembly next year for an additional $300 million to run its programs.

The budget request by the Department of Community Health, which was approved by the agency’s board Thursday, comes on top of several years of spiraling spending brought on by growing Medicaid rolls and escalating health care costs.

The $300 million projected to be needed for the midyear and fiscal 2018 budgets is only the state’s portion: The federal government would kick in about $600 million more in Medicaid spending for Georgia.

DCH officials are projecting 2 percent growth next year in enrollment for Medicaid and PeachCare insurance for children. About 1.87 million Georgians are enrolled in Medicaid, the health care program for the poor, disabled and elderly, and an additional 127,000 are on PeachCare.

Roger Folsom, the vice chairman of the DCH board, told the agency’s budget director that if he were her: “I would be concerned about the sustainability of this growth. I am for helping everyone that needs help.

“I am concerned about the future of our state.”

House Appropriations Chairman Terry England, R-Auburn, said he's worried about the increases as well.

“We are going to have to figure out something,” England told The Atlanta Journal-Constitution in an interview. “We’re going to have to figure out what’s the next trick in the bag to get control of it.”

With Medicaid, PeachCare and the State Health Benefit Plan — which provides health coverage for state workers, teachers and retirees — the DCH’s programs serve 2.6 million Georgians. Including federal taxpayer funding, the agency’s budget will likely top $14.5 billion next year, about $3 billion more than the state spends on public schools.

The state currently doesn’t pay for PeachCare — federal money is used to foot the government’s part of the bill. The State Health Benefit Plan is expected to run a sizable surplus again in 2017.

But if the DCH’s budget proposal is approved by Gov. Nathan Deal and lawmakers next year, Medicaid spending will have almost doubled since fiscal 2007.

Part of it is due to rising health care expenses, a universal problem in the United States. But Medicaid rolls have also spiked. They rose during the Great Recession, when Georgians lost their jobs and health insurance, and the numbers have remained high.

Some of the enrollment gains resulted from the federal Affordable Care Act, DCH officials said. For instance, they say that 66,000 Georgians enrolled as part of the so-called “woodwork effect.” People who were eligible but never enrolled did so in part because of increased outreach and awareness, officials said.

Mostly because of rising enrollment and costs, the DCH board voted Thursday to ask lawmakers for an additional $115 million in the midyear budget and $183 million in the spending plan for fiscal 2018, which begins July 1. Most of that would go to Medicaid.

State tax collections were way up during the recently completed fiscal year, so Deal and lawmakers will likely have more money to spend when the 2017 session opens in January. But Deal has ambitious plans in several areas, including a makeover of the k-12 education funding system, that could cost big money.

Deal’s budget director last month told state agencies not to ask for spending increases except in a few areas, such as education, where funding typically goes up to match the growth in student enrollment. The DCH was among those allowed to request an increase.

DCH Commissioner Clyde Reese said his agency started to get the growth in Medicaid spending under control in the late 2000s when the state started using a managed care system to lower costs. Now the state may have to come up with some new ways to slow the rate of spending.

“I don’t know that you will see Medicaid continuing to grow to the extent it is now,” Reese said. “As Mr. Folsom said, that would probably be unsustainable. Whether or not we continue to see this kind of growth, we may have to look at some other things. You can’t stop people who are eligible from enrolling.”