Georgia To Expand HMO Fee To Fund Medicaid, PeachCare

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The Georgia Department of Community Health plans to expand a quality assessment fee to about a dozen additional HMOs in the state to help fund the state's Medicaid and PeachCare programs, the Atlanta Journal-Constitution reports. PeachCare is the state's version of SCHIP. The state in 2005 began charging the fees to three national insurance companies that provide benefits for Medicaid and PeachCare beneficiaries. The fee generates $143 million annually and draws down $90 million in federal matching funds.

Under the plan, the state would add a 3% increase to HMO insurance premiums; the plan would not affect PPOs, Medicare or large, self-insured companies in the state. State officials say expanding the fee would generate $112 million and draw down an additional $90 million in federal matching funds.

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State health officials say extra money is needed because Gov. Sonny Perdue (R) ordered across-the-board budget cuts for state departments, including a 5% cut for Medicaid and PeachCare. DCH Commissioner Rhonda Medows said the state might have to drop people from the programs unless additional funding is found. In addition, Medows said the state needs to expand the fee to other HMOs by October 2009 to comply with a federal law governing the 15 states that use quality assessment fees. If the state does not comply with the law it could lose existing federal matching funds.

Insurance companies oppose the new fees, saying the fees could increase rates for people with private coverage and might price people out of their plans. Perdue will not make a decision about the fees until he submits his budget to the state Legislature in January 2009, according to Bert Brantley, a spokesperson for the governor. Brantley said that the governor's office also is researching whether the fee expansion requires legislative approval (Schneider, Atlanta Journal-Constitution, 10/6).

Reprinted with permission from kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, and sign up for email delivery at kaisernetwork.org/email . The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation. © 2007 Advisory Board Company and Kaiser Family Foundation. All rights reserved.

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