Since its inception in the late 1960s, Medicaid has been a lifeline for the nearly 2 million Georgians who depend on it for vital health services. The modest medical coverage provided by Medicaid goes to the most vulnerable in our society. In fact, 92 percent of Medicaid goes to children, seniors or the disabled.
Medicaid is administered by the state, but with a shared funding; about 60 percent is federal and 40 percent is state. These payments prevent health care for poor children and seniors from being the sole responsibility of property taxpayers. It is often the only health care funding provided in rural areas. And it’s a critical piece used to solve the state’s annual budget puzzle for lawmakers who work to manage Georgia’s finances responsibly. So Congress’ proposal to cut Georgia out of an average of $400 million in Medicaid funding per year over the next decade is a budget buster, and could well lead to an increase in local property taxes.
The budget buster is packaged in the U.S. Senate’s health bill released this week, which will only deepen the cuts to Medicaid in the bill passed by the U.S. House last month. The human pain the plan portends is the worst aspect, but don’t underestimate the damage it will do to the state’s ability to pay for education, public safety and other things essential to our quality of life.
How important is it to support Medicaid through Georgia’s budget?
It’s important enough that this winter state lawmakers quickly extended a fee paid by Georgia’s health care providers to raise about $900 million needed to balance the state’s $25 billion 2018 budget that starts July 1. This matching of Medicaid funds was the only way to keep some rural hospitals open. Three years ago, approving the fee was a bit contentious. This year its importance to a balanced state budget was such a given among state lawmakers it wasn’t even debatable.
I am very familiar with the hard work it takes to create a balanced state budget. Finding $400 million to cut from a $25 billion budget is harder than you might think. Consider lawmakers still underfunded Georgia’s public schools in the 2018 budget to the tune of $167 million, according to the state’s own formula. This is due to lingering austerity cuts to education spending, an ongoing legacy of the Great Recession that’s now a decade in our rearview mirror.
I also know what it’s like to plan a state budget during economic turmoil. As Georgia’s governor from 1999 to 2003, I shepherded the state’s response to the dot-com recession. We got through it, but the pain was real. Georgia’s economy is in better shape today, but it is only prudent to assume belt-tightening days will come again.
So let’s take a look at how proposed federal health law changes might come back to haunt the people charged with writing Georgia’s budget.
The proposals would fundamentally change the structure of Medicaid by capping federal payments to the states based on historical spending. Georgia is the second-lowest spending state on Medicaid per enrollee. Proposed caps would lock Georgia at a low rate and reduce federal Medicaid funding in Georgia by $4 billion over 10 years.
If Congress caps Georgia's Medicaid contribution in a remake of the federal health care law this year, state budget writers will need to start figuring out where the $400 million will come from by 2019. That is a tall order, especially on such short notice.
In my home county of Cobb, I know where the loss of federal Medicaid support will land. More than 64,000 people in the county rely on Medicaid, about 9 percent of the population. More than three-quarters of them are under age 18. So, we’re talking about tens of thousands of Cobb County children.
When we talk about budgets in the billions and cuts in the hundreds of millions some eyes might glaze over, making it hard to see the difference those investments make in the lives of people in communities across Georgia. But the difference is critical and closer to home than you might think.
Our representatives in Congress, especially our senators in Washington where this issue will soon be decided, should calculate the damage back home promised by the plan that’s been dumped at their feet. And then they should prevent that damage from occurring. Our children, seniors and taxpayers are depending on it.
