By James Salzer

The state has decided not to move ahead with a plan to get the federal government to provide more Medicaid funding for an experimental program aimed at helping Grady Hospital and struggling rural hospitals.

Department of Community Health Commissioner Clyde Reese said Thursday that the state decided not to apply for a waiver to secure more funding using the plan because of how much it would cost the state and because his agency didn't think the federal government would go along with the plan.

Reese said federal officials gave strong indications they would reject the state's plan because state officials couldn't guarantee they would ultimately agree to fully expand Medicaid, as many states have done under the Affordable Care Act. Reese said the state would have spent about $3.5 million annually to administer the "experiment."

Gov. Nathan Deal and Republican leaders have said fully expanding Medicaid would cost the state hundreds of millions of dollars a year.

State officials have been vague about the plan since word of the proposal surfaced in May. At the time, state health officials said they would seek permission from the federal government to "experiment" with Medicaid in a way that would shore up rural and safety net hospitals.

However, Reese said the state could submit an alternative plan at some point. Grady Hospital officials are working on an alternative proposal that would be less expensive, state official said.

(c)2015 The Atlanta Journal-Constitution (Atlanta, Ga.)