Of the increases, 2 percent are to cover changes required by the federal health reform law, including full coverage of some women’s health care and contraceptives that the state now only pays for partly.
Even after raising premiums in the employee health plan, the board still expects to wind up with a $7.9 million deficit at the end of next year. But department officials note that the plans costs have grown slower in the last five years than private insurance plans.
“We’re managing costs,” said Vince Harris, the department’s chief financial officer.
The revision to the health plan that covers roughly 700,000 workers, retirees and their families, was only part of what the board approved. It also authorized cutting 3 percent from its budget for the remainder of this fiscal year and all of the next, and it agreed to whittle an additional 2 percent from its Medicaid and PeachCare for Kids programs next year, all at the request of Gov. Nathan Deal in response to weak tax collections.
“It’s not a secret to any of us that this is going to be a difficult budget year,” said Community Health Commissioner David Cook.
The bulk of the budget for the Department of Community Health is for the State Health Benefit Plan and for Medicaid.
Medicaid, a health program for the poor, covers nearly one of every five Georgians. What the state spends is matched with federal funds, meaning a cut from the state eliminates about the same amount from Washington, effectively doubling the impact on the program.
While the board approved cuts to Medicaid, it isn’t sure how it’s going to achieve them.
“We’ll have at least $62 million in savings,” Cook said. “We plan on meeting those budget targets.”
Federal law blocks the state from limiting who is eligible. The state could stop covering some treatments, like dental care, but it already provides fewer optional coverages than many other states.
Another option is to devise ways to shift Medicaid patients to less-costly providers – such as clinics rather than emergency rooms – but Cook said those strategies take funding to get started and years to begin producing savings.
The last option, trimming what it pays doctors and hospitals, is not being considered, he said.