Originally created 09/16/99

State's health plan on financial edge

ATLANTA -- The $980 million health plan for nearly 550,000 state employees and their dependents operated too close to the edge last fiscal year, taking in only about $1 million more in premiums than it paid out in claims, Georgia Community Health Commissioner Russ Toal said Wednesday.

"That's unacceptable," Mr. Toal told members of the Board of Community Health in a discussion on the 2001 budget the department will submit to Gov. Roy Barnes later this month. "Three or four big claims would take care of that in a heartbeat. ... We've got some serious issues to tackle."

Finding a way to build the State Health Benefit Plan's reserves is just one of the challenges facing the new "superagency," which opened for business last July 1, consolidating the health-planning functions of several departments.

Mr. Toal also must come up with plans to reduce the number of uninsured Georgians, deal with the chance of a shortfall in Medicaid funding in the wake of state budget cuts and try to pare the waiting lists for home- and community-based health care.

But it's the precarious status of the state health plan that matters most to the state employees and dependents enrolled in the plan. Enrollees already were hit with a premium increase in July, despite an $80 million supplemental appropriation by the General Assembly for the program, said Katie Foster, executive director of the Georgia State Employees Union.

"We've had concerns (from union members) about the cost of health care," she said. "With the salaries a lot of our people are making, it's hard to meet those new demands."

Mr. Toal said he is not considering further premium increases in the current fiscal year, partly because the budgets of the various agencies that contribute to the health plan already are set through June. Raising premiums also wouldn't solve long-range cash-flow problems, he said.

"All that does is buy you some short-term relief," he said. "You have to look at the fundamental causes of why it is happening."

Mr. Toal told the board he wants to see more auditing of claims and closer management of contracts with insurers. A major fraud detection and prevention effort, similar to what is being done with the Medicaid program, also should be put in place, he said.

"My sense is there's been virtually no attention being paid to fraud and abuse in the SHBP," he said.

Mr. Toal said he may be ready with some recommendations to put the program on a firmer financial footing as early as next week, when the board meets to vote on the new department's first budget.


Dave Williams at (404) 589-8424.


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