Risky Health Proposal Hurtles through Gold Dome

Updated Mar. 25, 2019. Flawed legislation to expand access to health insurance is hurtling through the state legislature, and hundreds of thousands of uninsured Georgians are being left behind. Senate Bill 106, the Patients First Act, passed the Georgia Senate on Feb. 26 and advanced to the House. The proposal could expand health insurance coverage to more Georgians, though an arbitrary restriction in the bill is setting Georgia up for lengthy delays or outright failure. As currently written, the proposal could cost Georgia twice as much as alternate plans while covering only half as many Georgians with health insurance.

Earlier this year, Georgia leaders announced a plan with a risky restriction to seek federal waivers that could extend health care access across the state. Senate Bill (SB) 106, the Patients First Act, aims to partially expand Medicaid in Georgia. This change could impact individuals earning up to 100 percent of the federal poverty level (FPL): about $12,100 a year for an individual or $25,100 for a family of four. About 240,000 Georgians may eventually qualify for Medicaid coverage under the proposal.

However, restricting Medicaid eligibility to those only under the poverty line could strand hundreds of thousands of Georgians without affordable health insurance options while also forfeiting an enhanced funding deal from the federal government. That means SB 106 could cost Georgia twice as much as traditional Medicaid expansion while covering only half as many Georgians. And although the legislation is quickly advancing through the Gold Dome, the state has yet to release any estimates of how many Georgians will gain coverage or how much the plan will cost taxpayers.

How could the Patients First Act cover half as many Georgians while costing twice as much as Medicaid expansion? As part of the Affordable Care Act, the federal government agrees to pay 90 percent of the costs if states expand health care access to people earning less than 138 percent FPL—about $35,000 for a family of four. States can leverage this 9-to-1 funding match through Medicaid expansion or a state plan, called an 1115 waiver, to accomplish similar goals with more tailored approaches. Without the enhanced 90 percent match, states receive a lower funding commitment instead (about 67 percent for Georgia).

By arbitrarily limiting the state’s ability to negotiate coverage, SB 106 represents a risky gamble while Georgia’s worsening health care crisis hangs in the balance. Other states have previously submitted waivers asking for the enhanced funding match while offering to cover people up to 100 percent FPL, similar to SB 106. None were approved. Every 1115 Medicaid waiver approved under the Affordable Care Act for the enhanced match—including the most conservative examples in Arkansas, Indiana and Kentucky—expanded eligibility up to 138 percent of the poverty line. Georgia should too.

State lawmakers can fix SB 106 by allowing Medicaid eligibility up to 138 percent of the federal poverty level.

Key Points

Bottom Line

Senate Bill (SB) 106 is an unnecessarily risky proposal that threatens to leave hundreds of thousands of Georgians out of expanded health coverage and restricts Georgia from negotiating the best possible health plan.

An arbitrary restriction in SB 106 will lock Georgia to a failed approach that deprives state leaders of the flexibility needed to negotiate a strong health plan.

SB 106 may cost Georgia twice as much money while covering half as many people compared to other plans, including traditional Medicaid expansion.

A simple change to SB 106 would give Georgia a clearer, more certain path to success. State lawmakers can amend the bill to allow Medicaid eligibility up to 138 percent of the federal poverty level.

The Legislation

The Patients First Act, Georgia Senate Bill (SB) 106, would authorize the Department of Community Health to negotiate two waivers with the federal government that could improve health care in Georgia.

Senate Bill 106 would allow the Department of Community Health to request waivers to increase Medicaid coverage up to 100 percent of the federal poverty level (FPL)—about $12,000 for an individual or $25,000 for a family of four. This could potentially expand health coverage to about 240,000 Georgians.

SB 106 Leaves Hundreds of Thousands of Georgians Behind

The proposal falls far short of covering all eligible Georgians with incomes up to 138 percent of the federal poverty level (FPL). Many of the Georgians who are left out will remain uninsured and continue to struggle to get the health care they need.

About 230,000 uninsured Georgians earn between 100 to 138 percent FPL and would not receive expanded coverage through Medicaid. Georgians earning more than 100 percent FPL currently qualify for financial support to buy health insurance, but many still struggle to afford coverage.

Georgia has the 4th highest number of uninsured kids in the nation, many of whom are eligible for Medicaid but remain uninsured. When more parents and caregivers are covered, more kids are more likely to be insured too.

Other plans would put health insurance cards in the pockets of almost half a million Georgians while likely still costing less than the plan authorized by SB 106.

The Critical Difference Between 100 and 138 Percent

As part of the Affordable Care Act, the federal government agrees to pay 90 percent of the costs if states expand health care access to people earning less than 138 percent of the federal poverty level (FPL)—about $35,000 for a family of four.

Without this enhanced 90 percent federal match, states receive a lower funding commitment instead. That lower match is about 67 percent for Georgia.

SB 106 Represents Unnecessarily Risky Gamble

SB 106 represents an unnecessarily risky gamble with Georgia’s health crisis in the balance. Georgia’s leaders are putting forward ideas that have previously failed in other states.

Other states have submitted waivers asking for the enhanced match while only proposing to cover people up to 100 percent FPL, similar to SB 106. None were approved.

Every 1115 Medicaid waiver approved under the Affordable Care Act for the enhanced match—including the most conservative examples in Arkansas, Indiana and Kentucky—expanded eligibility up to 138 percent of the federal poverty level. Some states simply expanded Medicaid while others have developed state-specific plans called 1115 waivers to accomplish similar goals with more tailored approaches.

By restricting Medicaid eligibility to 100 percent of the poverty line, the best plan possible will likely cover half as many Georgians while costing twice as much as alternative.

The arbitrary coverage restriction in SB 106 is setting Georgia up for failure. Preventing Georgia’s 1115 waiver from helping Georgians earning up to 138 percent of the federal poverty level (about $35,000 for a family of four) means that our state is unlikely to get a good deal any time soon.

Unclear Proposal Could Result in Massive Changes with Limited Oversight

SB 106 gives Gov. Brian Kemp’s administration broad authority to make extensive changes to health care in Georgia without input from the legislature or public during the drafting stage.

The Governor’s plan offers no guiding principles, assurances of good governance or safeguards for fiscal responsibility.

No fiscal note or cost estimate has been provided for the proposed waivers being authorized even though this bill has been called “the most significant issue” being discussed this year

The governor’s proposal will likely result in covering fewer Georgians at a greater cost to taxpayers.

Simple Solution

There’s a simple solution for this unnecessarily risky gamble: change one number. State lawmakers can amend SB 106 to authorize an 1115 waiver up to 138 percent of the federal poverty level, instead of the current 100 percent.

Or lawmakers can include a back-up plan authorizes Medicaid eligibility up to 138 percent if the current approach is rejected.

Key Questions About SB 106

How many Georgians will gain access to health insurance through the waivers authorized by SB 106?

Georgia’s uninsured rate in 2017 was 13.4 percent. How much will the proposed waivers reduce our growing uninsured rate?

About 240,000 Georgians make too little to get financial help to buy health insurance and do not currently qualify for Medicaid. This coverage gap represents people earning below the poverty line. Will the waiver offer Medicaid eligibility to everyone in this gap?

When can Georgians expect to see expanded access to health insurance from this proposal?

When will Georgians finally get a health insurance card in their pocket from this plan?

What guarantee does Georgia have that an 1115 waiver which only covers people up to the federal poverty level will receive approval from the federal government for the enhanced 9-to-1 funding match? All similar plans that were previously submitted by other states have been rejected.

Why should state lawmakers arbitrarily limit Georgia’s flexibility to negotiate the best deal possible, especially when that restriction is likely to cause significant delays or outright rejection?

If Georgia’s 1115 waiver is not approved for the enhanced federal funding match, will state leaders choose to cover half as many Georgians as traditional Medicaid expansion for twice the cost?

Will the waivers from this proposal protect Georgians with pre-existing conditions?

Will the waivers maintain essential health benefits for Georgians?

What opportunities will Georgia’s legislative branch have to review and inform the waiver proposals?

How will locking Georgia into a risky waiver approach that’s destined for long delays or failure help address our state’s pressing health care crisis?