Georgia’s massive Medicaid program is facing a shortfall of more than $300 million in the coming fiscal year, a state health official said Thursday.
The state Department of Community Health plans to ask the state legislature for roughly $308.2 million to make up the gap for fiscal 2013, Vince Harris, the agency’s chief financial officer, told board members.
The looming deficit comes at a time when the state health agency is also facing the addition of another 600,000-plus Georgians to its Medicaid rolls starting in 2014, as part of the program’s expansion under the health care law.
“The budget numbers that we have are very daunting,” Commissioner David Cook said.
The health care program is also looking at a $90 million deficit for the current fiscal year. That accumulated in large part because the state legislature did not allocate funds for the final month of payments to three for-profit companies that manage care for primarily low-income kids and moms in Medicaid.
Cook estimates the annual Medicaid deficit will reach more than $600 million within three years.
State officials are in the process of redesigning Medicaid, which covers roughly 1.7 million low-income, elderly and disabled Georgians, hoping to curb costs while also improving care. They are considering expanding the use of for-profit companies to manage and coordinate overall care for vulnerable Georgians who need some of the most complex, expensive care, such as people in nursing homes and the developmentally disabled.
The redesign effort should help address some of the program's financial challenges, said Cook, adding that Medicaid is growing more quickly than Georgia’s overall economy. It is expected to account for 17.5 percent of the state’s budget by 2014.
When care is better coordinated, “You not only get better care but you save some money,” Cook said.
The department plans to announce details of the changes later this summer.
The redesign is aimed at achieving long-term savings by helping people manage chronic conditions, said Tim Sweeney, a health care analyst with the nonpartisan Georgia Budget and Policy Institute. But it’s not a solution to deal with the immediate shortfall, Sweeney said.
He added that while making changes to the program will help address the deficit, the state legislature also needs to provide more funding.
“The deficit is more created by underfunding the program in the first place,” he said.
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