Georgia FY 2011 Budget Gap Details

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FY 2011 Budget Gap Details

1) Enhanced Medicaid Match

The FY 2011 state budget includes $748 million in an enhanced federal Medicaid match (FMAP) originally contained in the Recovery Act. The enhanced Medicaid match is set to expire on December 31, 2010. Georgia’s budget includes $375 million from the enhanced match under the assumption that the U.S. Congress will extend the enhanced Medicaid match for six months until June 30, 2011. The Senate has been unable to muster the 60 votes needed to pass legislation that includes the Medicaid extension. If Congress does not pass an extension, the state budget will face a $375 million shortfall.

2) Education Stabilization Recovery Act Funds

Among other recent actions to closeout fiscal year 2010, the governor transferred $37.7 million in federal Education Stabilization Recovery Act funds from FY 2011 to FY 2010.^{4 This transfer opens up a $37.7 million hole in the FY 2011 budget since these funds are budgeted for this fiscal year.}

3) State Health Benefit Plan

The State Health Benefit Plan (SHBP) is operating with a projected shortfall of as much as $200 million. As a result of reduced state contributions to the SHBP, the plan is operating without the funding reserve it has previously enjoyed and current SHBP cash assets are not large enough to cover outstanding claims. As a result, the SHBP is essentially operating with a deficit, as current outstanding claims (including those that have not yet been reported) exceed the cash held by the plan.

The entire deficit does not necessarily have to be addressed in the current fiscal year. Addressing the deficit will likely require additional funding to the plan, although expense-reducing options could also be considered. Currently, the Department of Community Health (DCH), which houses the SHBP, is pursuing potential grant funding available to employers under the new national health reform law, also known as the Affordable Care Act (ACA). If DCH does not win the funds, the state could increase monthly premiums

Posted via email from Jim Nichols for Senate Blog