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Why are your health care costs so high?
Posted by: McQ on Monday, October 06, 2008

Well, here's a hint:
Georgia’s top health agency plans to charge health insurers millions of dollars in extra fees to help pay for the state’s Medicaid and PeachCare for Kids programs.

But those insurance companies are fighting back, saying the fees will drive up rates for people with private insurance and possibly price some people out of their coverage plans.

At stake is $112 million the state says it needs because of statewide budget cuts. State health officials also say federal regulations call for the new fees.

Dr. Rhonda Medows, commissioner of the state Department of Community Health, said that without additional money, the agency may have to drop people from Medicaid and PeachCare rolls.

“We’re talking about cutting benefits to people already receiving them,” she said.

But Kirk McGhee, executive director of the industry trade group Georgia Association of Health Plans, said raising the fees on insurance companies could have a similar effect on people who pay for their insurance.

“We’re an easy target … Nobody likes insurance companies,” he said.

McGhee said the extra cost could affect hundreds of thousands of Georgians covered under HMOs. Under the plan, a 3 percent increase would be added to premiums for HMO insurance. It remains unclear why the agency is singling out the HMOs; officials said that it is their interpretation of the federal law. The plan would not affect PPOs, Medicare or self-insured major companies such as Coca-Cola.

The surcharge would yield $112 million, as well as a federal match of $90 million.

Medows said these HMOs should pay this “civic rent” to do their share in supporting the societal burden of helping the needy.
"Civic rent?" How about rent seeking instead?

Of course, as presented, it is those hated HMOs which will be paying the "fee" or "civic rent". In actuality, it will be the members of the HMO to whom the cost will be passed. They will pay the extra 3%. And, for those on the edge, that may price them out of their insurance coverage.

This is not going to be a situation isolated to Georgia by any stretch. Government entities everywhere are going to be facing similar shortfalls in funding and seeking new and innovative ways to grab your money.

Notice that the solution to the problem is never "cut spending". The claim in the article is the need is driven by "budget cuts". But they aren't budget cuts if the government agency simply switches sources of income and spends at the same level.

Look for a lot more of these "creative" approaches to "budget cuts" in the ensuing months and years as we struggle through an economic downturn. Apparently what you shouldn't expect to do is keep more of your money or see government actually cut spending and live within its means.
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Previous Comments to this Post 

and seeking new and innovative ways to grab your money
New and innovative ways? No, my friend...

New and innovative names for the only trick they know.
Written By: Scott Jacobs
URL: http://
Option 1: No extra fees and the agency may have to drop people from Medicaid and PeachCare rolls.

Option 2: Charge extra fees and price some people who pay for their insurance out of coverage.

Typical. Punish those taking responsibility for themselves at the expense of welfare.

Written By: Is
URL: http://
"Civic rent".

Keeping the scale of the metaphor in mind, consider the implications of "civic eviction".

Nighty-night, kids.
Written By: Billy Beck
URL: http://www.two—
In our state, the privately insured, those insured by small businesses, is less than 25% of the market. The self-insured corporations are regulated at the federal level so States can’t make adjustments to those plans. And, of course, the State can’t tamper with Medicare premiums.

If the State is only targeting 25% of the payers with a tax increase in order to expand coverage to those on State plans, it’s going to feel onerous.
Written By: fiona
URL: http://
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Written By: 11

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