Medicaid proposal could cost Georgia billions of federal dollars

Photo by Nick Viviani

Photo by Nick Viviani

A GOP proposal to transform Medicaid into a block grant program could cost Georgia billions of dollars in projected federal spending, which some groups fear will cut access to health care for thousands of the state's neediest residents.

The state could see a $47.6 billion cut in federal funding from 2012 to 2021 if the new health care law is repealed and Medicaid became a block grant, a recent study by the Kaiser Family Foundation's Commission on Medicaid and the Uninsured shows.

Proponents of the concept, including Gov. Nathan Deal, say giving a lump sum for Medicaid would allow states to find innovative solutions to improve care and better control costs with fewer federal rules. The proposal is part of House Budget Committee Chairman Paul Ryan's plan to trim $5 trillion in federal spending over the next 10 years.

"What we're looking at right now is a Medicaid that's going to be bankrupt," said U.S. Rep. Tom Price, R-Ga. "We're trying to save the program, not destroy it."

But health providers say Ryan's prescription for saving Medicaid, capping federal funding, would likely cut reimbursements to doctors that already don't cover the cost of treatment and haven't been increased in more than a decade. That, in turn, would reduce access to care, particularly in low-income urban and rural areas.

"It would kind of make me re-evaluate ... whether I would accept it at all," said Dr. Marti Gibbs, who already limits the number of new Medicaid patients she sees in a day at her Gainesville-area practice.

Price, also a doctor, and other supporters of block grants say they would give states flexibility to fashion Medicaid programs to fit their unique needs.

But Tim Sweeney, a health care analyst with the Georgia Budget and Policy Institute, said there is no flexibility that would allow states to provide the same services to the same number of people with 40 percent to 50 percent less funding. Georgia already has limited eligibility for Medicaid more than some states, he added.

"It would put pressure on the state to either significantly increase its investment in the program or it would force dramatic cuts," Sweeney said.

Under Ryan's proposal, Georgia would be among the states that take the biggest hit in federal funding, in part because it already has a high rate of uninsured and more restrictive Medicaid eligibility than other states. That gives it more to gain in federal dollars from the health care overhaul's expansion of the program in 2014.

Medicaid and PeachCare for Kids -- providing coverage to 1.6 million people -- cost the state roughly $1.7 billion this fiscal year, with the feds adding $5 billion. Officials expect the expansion to add 600,000-plus Medicaid recipients.

Ultimately, block grants would add to the number of uninsured in Georgia, Sweeney said. In 2009, Georgia had the fifth-highest percentage of uninsured people with 1.9 million residents, or 20.5 percent, according to the U.S. Census Bureau.