On
January 14, 2013 the Georgia General Assembly will begin another legislative
session. There will be several major issues that confront members during
the 40 legislative days. The top issue will be finding ways to balance the
budget while facing difficult healthcare policy issues.
State
Budget
In
every session, we prepare two budgets – an amended budget for the
current fiscal year, and a full year budget to set spending. Georgia
ended Fiscal Year 2012 in the black. Both the Amended FY 2013 and FY 2014
budgets are based on projected growth. To give you some perspective, the
2012 budget was based on a 5.2 percent tax growth and the 2013 budget was based
on a similar growth rate; however, there has only been a 3.7 percent tax growth
and expected cuts will have to be implemented. As a result of lower
growth, the Governor has called for a 3 percent reduction plan from all
agencies for FY 2014, as well as a 5 percent reduction plan in Medicaid to
reduce the program’s $400 million deficit at current spending levels.
That 5 percent cut would equate to a $100 million reduction in the Medicaid
deficit. Only K-12 education formula funds and state schools are exempt
from the cuts.
The
$400 million Medicaid shortfall is a result of the state having difficulty
keeping up with the rising cost of health care and Medicaid enrollment
growth. For instance, 52 percent of all Georgia pregnancies in 2010 were
financed by Medicaid and the trend is growing. To keep up with rising
costs, it is possible that cuts in Medicaid reimbursements could be considered,
but that decision could cause more healthcare providers to not accept Medicaid
patients. Furthermore, to stem further cuts in reimbursements to providers, the
state will look to draw down more federal dollars. One way to stem cuts
to reimbursements is to renew the controversial Medicaid Hospital Provider
Payment Agreement fee assessed on most hospitals, which is set to expire on
June 30, 2013.
Medicaid
Provider Hospital Fee
Adopted
in Georgia amidst controversy as a temporary measure in 2010 to plug holes in
hospital Medicaid rates in an ever expanding Medicaid budget, the fee is a
percentage of a hospital’s net revenue, which may be
used to draw federal matching funds through a federally funded financing
mechanism that redistributes the total back to hospitals throughout the state
that serve a larger portion of poorer clientele.
The
fee, which generates about $251 million annually, qualifies the state to accept
more federal matching money to shore up Medicaid and attempts to soften cuts to
provider reimbursements. By accepting this money, the state in essence
contributes to federal deficit spending; however, with a $400 million Medicaid
deficit looming, allowing the provider fee to expire could require a 30 percent
cut in reimbursement to hospitals, which may result in fewer Medicaid patients
being accepted.
There
are hospitals who are winners and losers under this financing mechanism.
Hospitals like Grady Memorial in Atlanta, which serve a large Medicaid
population benefit from the "bed fee" policy, while other community
hospitals take a loss. The losses in revenue by "donor" hospitals is
usually "passed on" through cost shifting or just absorbed as a cost
of doing business, which can perpetuate the cycle of rising health care
costs.
The
Affordable Care Act
Now
that the Affordable Care Act (aka, “ObamaCare”)
law stands, Georgia has elected not to create a key feature of the ACA, a state
based health insurance exchange, which is a government created market place
where individuals can purchase health insurance. Creating a Georgia
specific health insurance exchange could add 650,000 new people to our growing
and costly Medicaid rolls, which would allow the state to accept federal subsidies
thus contributing to more federal deficit spending. Refusing to set up a
costly insurance exchange reduces Georgia’s risk of expanding Medicaid;
however, refusal will invite the federal government to set up their own
exchange in the state. Of note, individuals may not be eligible to
receive subsidies in the federal exchange.
Education
Funding Reform
During
the 2011 legislative session, the Georgia General Assembly formed a commission
to study the way the state funds education. Currently, the state funds
education through a complex funding formula that was created in 1985. Many
believe that this funding model is out of date and should be reformed in order
to maximize tax dollars efficiently. Quality education is the first step
towards insuring a prosperous future for Georgia and also serves as an
important tool for attracting businesses to this state in order to produce job
growth. It will be a top priority during the legislative session to address
education funding.
Ethics
Reform
After
an overwhelming majority of voters voiced approval to restrict lobbyist
spending for members of the legislature through a 2012 nonbinding ballot
question, efforts to seriously examine the state’s ethics
laws are underway. Speaker David Ralston has formed a special committee
in the House to research what other states have done to address this
issue. I expect some type of reform package to be presented to the
General Assembly in the early part of the legislative session.
Other
issues
There
will be a myriad of other issues that face the General Assembly this
legislative session such as the renewed debate about gun control in
light of the Sandy Hook, Connecticut school shootings; consideration to
legalizing horse racing in Georgia; a renewed discussion of transportation
funding; whether or not to raise the state's debt
cap to assist in financing a new Atlanta Falcons stadium and
consider whether to have the state opt out of the Common Core Standards.
Please do not hesitate to contact me.
In
Liberty,
Rep.
Jason Spencer
Representative
Jason Spencer represents the citizens of District 180. He was elected into the
House of Representatives in 2010, and currently serves on the Game Fish &
Parks, Special Rules, and Children and Youth committees.
Comments:
Jason was kind enough to forward me this letter, but he is
not the Dunwoody Rep. Tom Taylor should
receive your questions if you live in his District.
In Liberty
Norb Leahy, Dunwoody GA Tea Party Leader
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