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Balancing Georgia’s Medicaid & CHIP Budgets Tim Sweeney Sr. Healthcare Analyst Georgia Budget & Policy Institute January 29, 2010

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Page 1: Balancing Georgias Medicaid & CHIP Budgets Tim Sweeney Sr. Healthcare Analyst Georgia Budget & Policy Institute January 29, 2010

Balancing Georgia’s Medicaid & CHIP Budgets

Tim Sweeney Sr. Healthcare Analyst

Georgia Budget & Policy Institute

January 29, 2010

Page 2: Balancing Georgias Medicaid & CHIP Budgets Tim Sweeney Sr. Healthcare Analyst Georgia Budget & Policy Institute January 29, 2010

Setting the Stage

Political Climate Very Conservative, yet paternalistic

Budget & Revenue Picture Low taxes & spending levels pre-recession

Existing Medicaid Program Low parental eligibility (≈50% FPL) Low reimbursement rates Administrative barriers (income/identity/cit doc)

Page 3: Balancing Georgias Medicaid & CHIP Budgets Tim Sweeney Sr. Healthcare Analyst Georgia Budget & Policy Institute January 29, 2010

GA Facing Dramatic Revenue Loss

Original FY 2009 Estimate = $20.1 B Actual FY 2009 Revenue = $16.8 B Revised FY 2010 Forecast = $15.6 B

Original FY 2009 Medicaid/CHIP = $2.1 B Actual FY 2009 Medicaid/CHIP = $1.5 B Revised FY 2010 Medicaid/CHIP = $1.4 B

Page 4: Balancing Georgias Medicaid & CHIP Budgets Tim Sweeney Sr. Healthcare Analyst Georgia Budget & Policy Institute January 29, 2010

Balancing FY 2010

Pre-ARRA Governor proposed hospital & HMO taxes or

Medicaid provider rate cuts Legislature recessed while congress debated ARRA

Recovery Act funding was crucial for Medicaid Estimated $726 M (FY 2010) in savings due to

enhanced FMAP Enhanced federal share ≈ 75% Expiration created hole in FY 2011 & FY 2012

Page 5: Balancing Georgias Medicaid & CHIP Budgets Tim Sweeney Sr. Healthcare Analyst Georgia Budget & Policy Institute January 29, 2010

FY 2011

Recovery Act & one-time funds expiring Agency forecasts $600+ million hole

Gov proposes provider taxes Funds very limited enrollment growth

Gov’s budget assumes 6-month extension of ARRA-enhanced FMAP $378.5 M hole remains without extension

Page 6: Balancing Georgias Medicaid & CHIP Budgets Tim Sweeney Sr. Healthcare Analyst Georgia Budget & Policy Institute January 29, 2010

Governor Proposes Provider Taxes 1.6% provider taxes

$247.1 M from hospitals $97.1 M from managed care orgs

Funds directed for rate increases, enrollment growth, replacing 1-time funds Generates or protects $1 billion in federal funds Lots of opposition

Gov & agency threaten 16.5% rate cuts without new fees

Page 7: Balancing Georgias Medicaid & CHIP Budgets Tim Sweeney Sr. Healthcare Analyst Georgia Budget & Policy Institute January 29, 2010

GA in Need of Additional Revenues

Gov predicting $2.6 B shortfall in 2012 Revenue options exist:

Cigarette Tax: $1/ pack raises ≈ $400 million Temp. 1% surtax on income > $400k raises ≈

$225 million Reduce caps and values of existing tax credits

and exemptions Close corporate tax loopholes

Page 8: Balancing Georgias Medicaid & CHIP Budgets Tim Sweeney Sr. Healthcare Analyst Georgia Budget & Policy Institute January 29, 2010

Contact Info

Tim Sweeney100 Edgewood Ave, Suite 950

Atlanta, GA 30303

404.420.1324

[email protected]

www.GBPI.org