For the Children

originally published February 21, 2007

“For want of a nail the shoe was lost,” says the old nursery rhyme. “For want of a shoe the horse was lost.”

The horseshoe nail that threatens to upend the General Assembly is a health insurance program for children called PeachCare. It’s a joint program funded by federal and state allocations that provides health insurance for children whose families aren’t poor enough to get Medicaid, but don't make enough money to afford health insurance. PeachCare has been a success since it was started by Gov. Zell Miller, if you measure success by the number of people who participate. There are now more than 270,000 kids enrolled in the program, giving Georgia the fourth-largest number of participants among the states that provide programs like it.

But success comes with its limits and Georgia is bumping up against those limits. While the state has paid its 30 percent share of PeachCare’s budget for the current fiscal year, the federal share is falling short by as much as $131 million. The federal shortfall should have been fixed last year by Congress, but it wasn’t. State officials are now hoping that Congress will come through with the funding, but it could be May or June before we know if any is coming. That is a huge problem because PeachCare only has enough money to operate through the end of March.

The funding problem has resulted in some strange political alliances. Republican Gov. Sonny Perdue asked his good friend, President George W. Bush, to slip some extra money for Georgia into a budget bill, but Bush declined. That has forced Perdue and the Republican leadership in the legislature to plead with Democrats in Congress to pass a special budget bill. So far, Democrats haven’t seemed overly eager to help them.

The uncertainty caused by PeachCare has bogged down the General Assembly session, causing it to get off to its slowest start in years. Legislators can’t figure out how to balance the budget until they know if the feds will plug that $131-million hole. Because so much else in state government depends on the budget, lawmakers are forced to delay their consideration of other major issues. “PeachCare is driving everything,” said one of the House’s key budget writers.

Legislators can’t allow PeachCare to shut down or start kicking large numbers of kids out of the program - unless they don’t plan to run for another term in office. While the program may have been started by a Democratic governor, there are large numbers of children with Republican-voting parents who wouldn’t have health insurance if it weren’t for PeachCare.

The best guess is that Congress at some point will restore federal funding. The question then becomes whether the state would be willing to use some of its own money as a “bridge loan” to keep PeachCare operating until the money starts rolling in from Washington. Democratic lawmakers are already calling for the General Assembly to provide this temporary bailout and have introduced a bill to authorize that use of state funds. Republican legislators have been non-committal, hoping that Congress will come to the rescue in time.

Perdue gets cranky every time a reporter asks him if he would favor using more state money to keep PeachCare afloat. When a TV reporter inquired recently about this issue, Perdue snapped, “[Y]ou just show me where to look for it.” It is highly likely that a couple of Perdue’s pet initiatives for this session may get dumped in the effort to save PeachCare. His “Go Fish” proposal to spend $19 million to attract more bass fishing tournaments has already been ridiculed by one of Georgia’s congressmen and could be easily trimmed from the budget.

Perdue also has proposed giving a tax break to the more affluent of the state’s senior citizens. Georgians over the age of 65 already receive a tax exemption on the first $35,000 of retirement income. Perdue wants to exempt all retirement income, which would cost the state an estimated $142 million a year. That $142 million total is a little more than the $131 million the state would need to keep PeachCare solvent.

You’re not going to harm senior citizens if you wait a year or two to give them another tax break. A child who loses health insurance coverage, on the other hand, could become seriously ill today and unable to afford medical treatment for his ailment.

Wealthy retirees or sick children? That’s really not a hard choice at all, if you think about it very long.

Tom Crawford

tcrawford@capitolimpact.net