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What Is The Real Cost of Health Reform?
U.S. House version of bill could add $2.4 billion to Georgia’s budget over next five years
by Walter C. Jones, Morris News Service
November 19, 2009
The state of Georgia would have to come
up with $2.4 billion in new spending over the next five years if the U.S. House version of health
reform becomes law, according to an estimate by the Georgia Department of Community Health.
The figure surfaced in a letter Lt. Gov. Casey Cagle wrote Nov. 10 to U.S. Sens. Johnny
Isakson and Saxby Chambliss that was recently obtained by Morris News Service. In it, Cagle wrote
that the bill would cripple the state as it is trying to recover from a 22-percent one-year decline
in the state budget.
Georgia's original
budget for the previous fiscal year was based on tax collections of $20.1 billion, but current
projections show collections may only reach $15.7 billion, Cagle wrote. A less ambitious version of
health reform in the U.S. Senate that costs Georgia just $2 billion over five years will be nearly
as painful, he says, because both measures require states to expand coverage of low- and
middle-income people.
"In fact, if any of these massive unfunded mandates are enacted into law, our state will be
forced to cut additional essential services," Cagle wrote.
Cagle, Isakson and Chambliss are all Republicans who have expressed general disagreement
with the Democrats' health proposals.
Supporters of Democratic efforts at health reform applaud expanded coverage as a way to
reduce the number of Americans who have no insurance at any given moment. The way to bring more of
them into state coverage is by raising the income eligibility to 133 percent of the poverty level
in the Senate version or to 150 percent in the House plan. The more generous House cutoff would
allow a family of four to remain eligible until its annual income passed $33,000.
"Basically, what you're dealing with here are the usual GOP talking points, developed by
their political team, with an assist from the health insurance companies," says Matt Weyandt,
executive director of the Democratic Party of Georgia. "The truth is, Georgia saves money with
health insurance reform, which makes it even more important after the way Republicans on the state
level have run our budget into the ground."
Cagle relied on projections by the Georgia Department of Community Health that traced the
impact of the House bill once the federal government turns over the cost of Medicaid expansion to
the states in 2013. It also predicts more people currently eligible for Medicaid will decide to
enroll so they can avoid penalties for remaining uninsured that are included in the reform
measures, resulting in a 77 percent increase above the 1 million enrolled now.
Just processing the claims of the increased enrollment will add $37 million annually to the
budget, money the reform legislation doesn't provide to the state, according to the department's
analysis.Isakson says Cagle's letter is just another reason to oppose the plan in the Senate.
"Lt. Gov. Cagle is absolutely right," Isakson says. "At a time when most states are already
under tremendous budgetary stress, Georgia cannot afford the billions of dollars in massive
unfunded mandates that are contained in the Democrats' flawed health-care reform bill."
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