1. Balancing Georgias Medicaid & CHIP Budgets Tim Sweeney Sr. Healthcare Analyst Georgia Budget & Policy Institute January 29, 2010

2. Setting the Stage Political Climate Very Conservative, yet paternalistic Budget & Revenue Picture Low taxes & spending levels pre-recession Existing Medicaid Program Low parental eligibility (50% FPL) Low reimbursement rates Administrative barriers (income/identity/cit doc)

3. GA Facing Dramatic Revenue Loss Original FY 2009 Estimate = $20.1 B Actual FY 2009 Revenue = $16.8 B Revised FY 2010 Forecast = $15.6 B Original FY 2009 Medicaid/CHIP = $2.1 B Actual FY 2009 Medicaid/CHIP = $1.5 B Revised FY 2010 Medicaid/CHIP = $1.4 B

4. Balancing FY 2010 Pre-ARRA Governor proposed hospital & HMO taxes or Medicaid provider rate cuts Legislature recessed while congress debated ARRA Recovery Act funding was crucial for Medicaid Estimated $726 M (FY 2010) in savings due to enhanced FMAP Enhanced federal share 75% Expiration created hole in FY 2011 & FY 2012

5. FY 2011 Recovery Act & one-time funds expiring Agency forecasts $600+ million hole Gov proposes provider taxes Funds very limited enrollment growth Govs budget assumes 6-month extension of ARRA-enhanced FMAP $378.5 M hole remains without extension

6. Governor Proposes Provider Taxes 1.6% provider taxes $247.1 M from hospitals $97.1 M from managed care orgs Funds directed for rate increases, enrollment growth, replacing 1-time funds Generates or protects $1 billion in federal funds Lots of opposition Gov & agency threaten 16.5% rate cuts without new fees

7. GA in Need of Additional Revenues Gov predicting $2.6 B shortfall in 2012 Revenue options exist: Cigarette Tax: $1/ pack raises $400 million Temp. 1% surtax on income > $400k raises $225 million Reduce caps and values of existing tax credits and exemptions Close corporate tax loopholes

8. Contact Info Tim Sweeney 100 Edgewood Ave, Suite 950 Atlanta, GA 30303 404.420.1324 tsweeney@gbpi.org www.GBPI.org