- The Trump administration on Sunday approved a Georgia waiver seeking to dismantle use of the Healthcare.gov federal insurance marketplace, without replacing it with a state-based marketplace, and establish a new reinsurance program.
- If implemented, the plan would make Georgia the first state with no government-run website to enroll in Affordable Care Act plans, decentralizing marketplace functions among a handful of private sector players. That could result in a fragmented enrollment system, undermining protections for people with preexisting conditions and causing tens of thousands to lose coverage in Georgia, a state already with one of the worst uninsured rates in the U.S., researchers say.
- CMS argues the state's 1332 waiver will result in lower premiums and increased consumer choice in a private insurance market, while Georgia estimates the proposal will add 25,000 residents to coverage. That's "based on entirely unsupported assumptions," Brookings Institution researchers wrote in an early September report.
Georgia's proposal, the latest in a string of efforts from the red state to give its individual health insurance market a facelift since last year, is ill-formed and illegal, some academics and top Democrat lawmakers say.
Submitted to CMS in July by Gov. Brian Kemp, a Republican, it's the state's third 1332 waiver request.
Georgia has one of the highest uninsured rates in the country at 13.7%, or about 1.4 million residents uninsured. Myriad factors could be contributing to low coverage, including high costs and little insurer participation, along with low consumer awareness. About half of Georgia's uninsured population do qualify for federal subsidies under the ACA but haven't signed up for coverage, according to CMS.
Under the newly approved waivers, Georgia plans to implement a reinsurance program starting in the 2022 plan year. Reimbursement programs pay back insurers for a slice of their costs for covering high-cost enrollees, allowing them to charge lower premiums.
Georgia's plan, which would reimburse payers a percentage of claims paid between $20,000 and $500,000, should lower individual market premiums by 10% on average, CMS said. The state plans to reinvest savings in rural areas.
Then, beginning in the 2023 plan year, Georgia plans to transition its individual market from the federal exchange, including the online portal Healthcare.gov, to a private sector platform called the Georgia Access Model.
CMS touted the shift as a way to improve the consumer shopping experience, as people will be able to compare and enroll in plans using web brokers, health insurance companies and other private sector agents.
However, some policy groups and think tanks have determined the plan could cause tens of thousands of people to lose coverage, and is therefore illegal under the ACA.
Georgians can already enroll in coverage through private pathways like web brokers if they choose through a process called direct enrollment, so Georgia's waiver is actually eliminating consumer choice by nixing the one-stop-shop of Healthcare.gov, an early September report from the Center on Budget and Policy Priorities said.
Currently, 36 states use Healthcare.gov while the other 14 run their own state substitutes, to avoid the decentralization Georgia's plan will result in. Removing the federal platform will fragment the insurance market, which could confuse consumers and make it more difficult to enroll, researchers said.
Roughly four-fifths of Georgian marketplace enrollees (about 400,000 people) use Healthcare.gov.
Additionally, Georgia has allocated very little funding for the switch — $6 million in upfront costs and $1 million in ongoing administrative funds. That's about one-third of the amount Georgia previously estimated it would need, suggesting the transition from federal to state exchange could be rocky, also harming enrollment, researchers said.
And private insurers and brokers often have financial incentives to steer consumers to specific plans, which could result in less information and assistance and higher enrollment in substandard coverage.
"The Administration should recognize that Georgia's waiver would almost certainly reduce the number of people with health coverage, which clearly violates the statutory requirements for a Section 1332 waiver — and even the Administration's watered-down interpretation of those requirements," Tara Straw, senior health policy analyst at CBPP, wrote.
CMS' approval of the controversial plan builds on its earlier greenlight of a Georgia Medicaid demonstration to link safety-net Medicaid coverage to work and volunteering hours. In mid-October, the state received the federal OK to add a so-called work requirement to its Medicaid program, requiring beneficiaries to work at least 80 hours a month to be eligible for coverage.
That was the latest in a string of work requirement approvals from the Trump administration, though no state has actually implemented the programs amid a slew of legal challenges, the pandemic and other headwinds.