Thanks to broad bipartisan support, Georgia Governor Nathan Deal signed a bill this month that effectively closes a projected $900 million shortfall in funding for the state’s share of Medicaid. Senate Bill 70 was passed with overwhelming support from both Republicans and Democrats, and uses a fee structure that was first created in 2010. That fee has been referred to as a bed tax by many, and mandates that hospitals in Georgia provide the government with 1.45% of patient revenue. That money is then used to draw in federal money through the Medicaid program.
If you’re wondering how that works, it’s simple. The state collects its 1.45% fee from those hospitals. Right now, that amounts to roughly $311 million. Those dollars in turn draw in roughly $600 million in federal Medicaid funding, as the fed meets its Medicaid commitment to paying the lion’s share of the state’s Medicaid costs. Together, those two amounts resolve the $900 million gap in funding that many were anticipating.
Not Without Controversy
As usual, the measure’s passage was not without controversy. In this instance, opposition came from those who wanted to limit its fiscal impact by reducing the four-year fix to just a one year extension. That was easily defeated, however, as lawmakers were united in their effort to avoid any immediate votes of a similar nature for at least a few years.
The law has always had some measure of opposition, with many calling it a tax hike. In fact, the 2013 vote – which also involved a four-year extension of the fee – was opposed by tax groups for many of the same reasons. This year’s vote was made even more controversial due to the ongoing debate in Washington, D.C. about repealing the Affordable Care Act. Some opponents argued that the repeal of Obamacare could make the law unnecessary, since it might rollback the Medicaid expansion altogether.
A Sound Bill Regardless of ACA Repeal
Despite those reservations, most observers agree that the bill’s passage was necessary. While it is true that the current Republican administration of President Donald Trump and the Republican Congress have made promises to repeal and replace Obamacare, there are no definite plans to do so at this early stage in the new presidency. Thus far, proponents of repeal have yet to sort through the myriad plans floating around their caucus, and internal debate could simmer for months.
Moreover, there’s no guarantee that repeal will occur in the way some in the legislature might expect. There have already been signs that the Republicans in Congress plan to keep the most popular elements of the existing health care law, including provisions that allow children to remain on their parents’ insurance plans until age 26, and the guarantees that prevent applicants from being excluded from coverage based on preexisting conditions. There’s even an internal debate about how to maintain some semblance of the existing expansion of Medicaid.
It’s clear that national Republican are loathe to do anything that might result in ten or twenty million Americans losing access to health coverage through Medicaid. The optics of such a move would almost certainly translate into huge election losses in the next midterms. That likely means that the Obamacare-based expansion of Medicaid will survive in some form – even if it is accompanied by a transition to something that more closely resembles the block grant proposals under current consideration. So, while there may be adjustments to the formulas used to calculate how much money is delivered to participating states, it is unlikely that the program will be massively reduced in any serious way.
All of that simply means that any worries about this stopgap measure being a waste of time are probably overblown. The fact is that Medicaid expansion is more likely than not going to be with us for some time to come. The Medicaid program itself certainly isn’t going away any time soon. And, even if the Trump administration signed legislation that did away with the expansion effort, that still wouldn’t make this current fee a waste of time. According to the law’s supporters, the state health board has the authority it needs to address the fees if they suddenly become unnecessary. Basically, the board can just stop collecting the fees.
The truly positive element in all of this is that lawmakers bit the bullet and maintained the fee structure instead of bowing to outside pressure and getting rid of a stopgap measure that has been proven effective for more than half a decade. The alternative could have forced the legislature to divert funds from other budget priorities, raise other taxes to plug the gap, or make other adjustments to the Medicaid program in the state. Since hospitals have a vested interest in receiving more federal Medicaid dollars, this was probably the best of several bad options.
It also buys the state several years’ worth of time to see how the nation’s capital deals with the beleaguered federal health care law. With recent premium rates spiking even more than many anticipated, the onus is on Congress to do something to remedy the situation. Georgia can now afford to sit back and wait to see how the federal debate turns out before taking up the issue again sometime in early 2021. And if, as expected, the ACA is replaced with a new law that alters the Medicaid expansion in substantive ways, the state legislature is certain to intervene to change Georgia law accordingly.
Get Estate and Medicaid Planning Help
As important as these legislative changes might be, it is equally important for Georgia residents to ensure that they have adequately planned for their own future estate planning and elder law needs. At the Fouts Law Group, LLC, our experienced estate plan attorneys can work with you to ensure that your comprehensive plan can accommodate even the most unexpected changes in the law. We’ll work with you to develop the legacy plan, business and retirement strategies, and Medicaid planning efforts that you need to properly prepare for your family’s future. To learn more about how we can help you with your planning needs, contact us online or give us a call at (404) 596-7520.
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