In reforming its individual insurance market, Georgia wants to test Trump administration flexibility in unproven ways that some experts warn would put hundreds of thousands of people at risk for very little gain.
Gov. Brian Kemp, a Republican, on Monday released the state's draft 1332 waiver application, to seek approval from the federal government to make changes to its individual market that he says will lower premiums and increase choice for people who buy Affordable Care Act coverage there.
The sweeping changes, according to the draft, would increase individual market enrollment by a little more than 30,000 people and reduce premiums by 11.3% on average in 2022. But they threaten to disrupt healthcare coverage for the 450,000 Georgians who buy plans on the federal HealthCare.gov marketplace.
Under the plan, named Georgia Access, the state would implement a tried-and-true reinsurance program much like a dozen other states have before. Georgia expects the reinsurance program to reduce premiums in the state by about 10% on average in 2021, when it would go into effect. The average premium for the most popular ACA insurance plan was $398 per month in Georgia in 2019; it will fall about 8% to $366 per month in 2020 without Georgia's reinsurance program.
But other parts of Georgia's plan remain untested. It wants to establish state subsidies that residents could use to buy ACA-compliant and non-ACA compliant plans, including association health plans, so long as the policies cover pre-existing conditions and are not priced based on health status. That's a strategy the CMS encouraged under new 1332 guidance released in late 2018, but no states have taken advantage of the flexibility.
According to the draft waiver, Georgia will certify eligible non-qualified health plans to provide residents with access to more coverage options. The plans may offer fewer essential health benefits than are required by the ACA. The draft states that the availability of non-qualified health plans would actually increase premiums for plans covering all 10 essential benefits by 1.1% for members not receiving a subsidy.
Georgia said it would structure subsidies in the same way the federal government does, but it would cap the amount of subsidies the state pays out. If more subsidy-eligible residents enroll than projected, subsidies would be paid on a first come, first serve basis and additional enrollees would be put on a waiting list for financial help. The state projected that 53% of the 30,000 expected new enrollees would be eligible for subsidies.
This "would be a dramatic difference from how it works now," said Katie Keith, a health law professor at Georgetown University and ACA expert.
Keith said there's no cap on the amount of premium tax credits the federal government currently pays to eligible ACA exchange members; the government pays based on statutory eligibility.
Under Georgia's plan, even people eligible for financial assistance based on their income may not receive a subsidy. The state said that it anticipates the cap would have "minimal impact on consumers currently buying in the individual market as those consumers have market familiarity and will benefit from the opportunity for auto-reenrollment."
In another change, Georgia would move away from HealthCare.gov. But instead of creating its own state-run exchange like other states have, Georgians would buy coverage directly from web brokers or insurance companies.
"Georgia's plan for their version of direct enrollment is extreme and untested," said Tara Straw, senior health policy analyst at the left-leaning Center on Budget and Policy Priorities. "HealthCare.gov has a version of direct enrollment but it's very regulated and even then it has flaws."
While there are few details in the draft waiver, Straw said Georgia doesn't seem to be proposing an infrastructure similar to HealthCare.gov's to approve, monitor or sanction brokers that are steering consumers to plans that aren't in their best interests.
Georgians could be put at risk of being unknowingly steered into a plan that excludes benefits like mental health, maternity and prescription drug coverage, she said. Brokers aren't required to show all plans that are available, and they may encourage enrollment in plans that pay high commissions, such as short-term, limited-duration health plans, which don't cover the full-spectrum of ACA essential health benefits, Straw said.
According to the draft, Georgia expects its strategy to revamp its individual market to decrease federal spending by $2.6 billion in 2022 and $29.5 billion over 10 years. It projects its own state costs will total $149 million in 2022.
Both Keith and Straw doubted that Georgia's plan would meet the statutory guardrails that a 1332 waiver must meet.
"It's a lot of administrative upheaval and a lot of coverage upheaval for people with no reasonable gain in the number of people who have coverage in the state," Straw said.