Lawmakers Need to Head off Medicaid, PeachCare Funding Cut

Posted by Timothy Sweeney

Georgians who depend on two key programs for health coverage are threatened by funding cuts, and policymakers need to prevent that from happening.

Medicaid and PeachCare help more Georgians than ever receive much needed health care, particularly children. That’s crucial when so many Americans have lost jobs that provided health insurance or have seen their employers eliminate or reduce coverage.

Some 220,000 Georgians joined Medicaid and PeachCare between June 2008 and December 2011, a 15 percent increase. More than seven in10 new enrollees are children. This growth is the primary reason why the number of kids in Georgia without health insurance has fallen in recent years, even though the rate for adults has continued to grow.

Direct state funding for Medicaid and PeachCare has been cut by $75 million since 2009.  However, increased use of money from the 1998 lawsuit settlement with tobacco companies and a temporary fee on hospitals have helped keep these programs afloat.

But the hospital fee expires in July 2013. And federal Medicaid money that Georgia received to help weather the recession has run out as well.

If the hospital fee is not renewed, Medicaid and PeachCare face the loss of more than $150 million. Without these funds, health care providers who serve Medicaid and PeachCare patients could face substantial payment cuts – likely as high as the 16.5 percent cuts proposed as the alternative to the hospital fee in the first place.

There are two things policymakers can do in response.  The first is to renew the hospital fee. An alternative is a$1-per pack increase to the state cigarette tax, which currently ranks as the fourth-lowest tax in the country (37 cents). It would generate more than enough money to replace the hospital fee and have the added health benefit of discouraging smoking.

Download GBPI’s report, FY 2013 Budget Analysis: Community Health for additional information.


Related Material:

Medicaid Redesign

Food for Thought on Georgia’s Medicaid Redesign

Plan to Cut Medicaid Will Cost Georgia



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2 thoughts on “Lawmakers Need to Head off Medicaid, PeachCare Funding Cut”

  1. Pingback: FY 2013 Budget Analysis: Community Health | Georgia Budget and Policy Institute

  2. Pingback: Medicaid Redesign | Georgia Budget and Policy Institute

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