Reposted from Georgians for a Healthy Future: https://healthyfuturega.org/2021/06/16/cms-requests-more-information-about-georgias-proposed-changes-to-private-insurance/

On June 3^rd, 2021, the Centers for Medicaid and Medicare Services (CMS) sent a letter to Governor Kemp requesting additional data on the potential impacts of the Georgia Access Model. The Georgia Access Model was put forward by Kemp in his 1332 private insurance waiver, and the model would end access to healthcare.gov for Georgia consumers.

CMS is requesting additional data from the state because they believe recent changes made by President Biden’s administration to the Affordable Care Act’s health insurance marketplace have made the state’s previous analysis outdated or inaccurate. The Biden administration’s changes include:

• The COVID Special Enrollment Period (SEP)—through August 15, 2021, almost any American who does not have health insurance through their job can enroll in health coverage at healthcare.gov or by phone at 1-800-318-2596;
• More generous and expanded eligibility for Premium Tax Credits (PTCs)—almost anyone who qualifies for coverage through the ACA is now eligible for a discount on their monthly premium; and
• Increased funding for outreach and marketing for the ACA marketplace and enrollment opportunities.

These actions have led to more Americans, and Georgians, enrolling in Marketplace coverage. In addition, CMS believes that ACA enrollment would likely remain higher through 2023, when the Georgia Access Model is slated to begin.

In the letter, CMS also reasons the increase in enrollment could change insurance market dynamics enough to reduce the private sector’s incentive to enroll consumers. CMS believes with fewer uninsured people to enroll, the private sector may be less motivated to reach uninsured individuals. The idea that the private sector will be incentivized to enroll consumers once the competition of healthcare.gov is gone is a crucial assumption of Kemp’s waiver.

Georgia must now respond with updated data that takes into account the new federal changes. The new data will allow CMS to ensure the Georgia Access Model meets the protections specified in Section 1332 of the Affordable Care Act. These protections are:

1. Coverage must be at least as comprehensive as Marketplace coverage;
2. Coverage and protections against high costs must be as affordable as Marketplace coverage;
3. A similar number of people must have coverage under the waiver as without it; and
4. The waiver can’t add to the federal deficit.

The state may also request to adjust the Georgia Access Model, as needed, to meet waiver requirements in light of the new federal policies.

Once Georgia submits the new data about the Georgia Access Model, Georgia consumers, health advocates, and other stakeholders will have a chance to comment on the proposal again. CMS announced in their letter that they will hold a 30-day comment period after they receive Georgia’s new data. GHF expects the comment period will begin in early July. We will be working with our Cover Georgia partners to help Georgia individuals, organizations, and advocates comment. Stay tuned for your opportunity to weigh in again!

In December 2019, Governor Brian Kemp asked the federal government to approve a plan that would make seismic changes to private health insurance in Georgia. Gov. Kemp’s plan is made up of two parts: 1) Reinsurance—which would help to lower premiums; and 2) the Georgia Access model—which would undermine comprehensive coverage for the 500,000 Georgians who now have comprehensive coverage through the marketplace and put future enrollees at risk.

Federal law allows states to make changes to the Affordable Care Act (ACA) so long as a comparable number of consumers have coverage that is at least as comprehensive and affordable as they would have under the ACA, and the changes do not increase the federal deficit. Unfortunately, the second part of Gov. Kemp’s plan does not meet this standard and poses real risks to families and individuals in Georgia.

Phase I: Reinsurance

Reinsurance is a tool that some other states have used to lower premiums for consumers and attract more insurers to their marketplaces. Reinsurance is a system that pays insurance companies for a portion of the costs of consumers who have unusually expensive health needs. When these outlier costs are shared between the state and insurers, insurers are able to lower premiums for everyone.

Georgia’s reinsurance program is designed so that it would lower premiums more in areas of Georgia that have higher insurance premiums. Southwest Georgia has consistently had some of the highest premiums in the U.S. Georgia’s plan predicts that premiums may drop by 10% across the state, with rural areas seeing bigger drops than urban areas.

If approved by the federal government, Georgia’s reinsurance program would go into effect for 2021 insurance plans.

Phase II: Georgia Access model—a bad deal for Georgia consumers  

The second part of Gov. Kemp’s plan would undermine the benefits of reinsurance while also endangering the health and finances of Georgia consumers. Georgia is the first state to propose these complicated changes, putting Georgians at great risk of being guinea pigs in an unwise policy experiment. The second phase of the plan would make three major changes:

Limits the amount of financial help available to moderate and middle-income consumers and families when they purchase comprehensive health coverage. Nine out of ten Georgia consumers who purchase coverage on healthcare.gov get financial help that lowers their monthly premiums or reduces their deductibles and co-pays. Under the current system, every Georgian who qualifies gets financial help. The financial assistance helps people who make between 100-400% of the federal poverty level (an individual, $12,760-$51,040 or a family of 4 making $26,200-$104,800) by limiting their health spending to a small percentage of the household’s budget.[i]

Under Gov. Kemp’s plan the state would offer the same financial assistance to consumers but would limit the total amount of help available. The state’s budget for financial help could easily be exhausted if more people enroll in coverage than the state predicts or if premiums rise faster than expected. People who shop for coverage after the financial assistance limit is reached would be put on a waiting list and would not get any help in the meantime.

Likely impact: Some moderate- and middle-income Georgians would be forced to choose between going uninsured or paying the full price for coverage (which could be as much as their yearly income).

Erodes the requirement that insurance plans cover all essential health services and the financial protection that limits yearly health spending for individuals and families. The Governor’s plan introduces two new kinds of health plans: copper plans and disease management plans. Copper plans would feature cheaper premiums than current bronze level plans but would balance that with higher deductibles and co-pays. The disease management plans would be tailored to meet the needs of people with certain chronic diseases (like diabetes or HIV) and would have unspecified flexibility about how they cover the ten essential health benefits, like mental health or prescription drugs.[ii]

In order to offer these new kinds of plans, the Governor’s plan asks to “waive” (or set aside) two key ACA requirements: 1) the requirement that all plans sold on the ACA marketplace (healthcare.gov) cover the ten essential health benefits; and 2) the protective limit on annual out of pocket health spending for consumers.

Under the current system, the ACA limits a consumer’s out-of-pocket spending each year based on their income. Gov. Kemp’s plan would eliminate that spending ceiling, which is already too high for most Georgians to afford. Georgians are struggling with the difficult combination of premiums, deductibles, and other out of pocket costs, and copper plans with even higher (or even unlimited) spending caps would only exacerbate this problem.

The Governor’s plan would also eliminate the requirement that insurance plans cover the ten essential health benefits. The proposal states that for the first year Georgia will ensure all plans cover those services but makes no commitment about later plan years. The proposal says that disease management plans will have “flexibility” around how thy cover the ten essential health benefits (EHBs) with little detail about how Georgia would ensure that these plans offer comprehensive coverage for consumers who may enroll in them.

Likely impacts: Consumers could be on the hook for drastically unaffordable out of pocket costs and they could be left with insurance plans that do not meet their needs because they are not required to cover the essential health benefits.  

Dismantles healthcare.gov and instead forces Georgians to use profit-driven insurance company websites, e-brokers, or agents to shop for coverage.gov (also called “the marketplace”) is the most widely used and only unbiased place that consumers can shop for comprehensive health coverage. Consumers know all available plans will cover their health needs and they are offered financial help if they qualify and notified of their eligibility for Medicaid or other public coverage programs.

Under the Governor’s plan, Georgia consumers would be the only people in the U.S. forced to go without this resource and instead rely on private entities for shopping and enrollment. For-profit insurance companies, online brokers, and even some insurance agents will display comprehensive, ACA-compliant plans alongside short-term plans or plans that do not cover all services.

Under this system, insurance companies and brokers, who are regularly incentivized to enroll consumers in plans that offer the highest commissions, will push consumers to plans that do not fit their health needs or financial situation. They are not obligated or incentivized to help qualified Georgians enroll in Medicaid or PeachCare, or provide other safety net referrals.

This part of the Governor’s plan does not add any new ways for people to shop for health coverage (consumers can already shop with brokers or insurance companies). Instead, it only serves to shut off the most trusted and widely used path for Georgians purchasing their own coverage.

Likely result: Georgia consumers will struggle to navigate a decentralized enrollment system with numerous websites, translate the sales lingo of insurers, and disentangle conflicting information. For many, it may be harder to find a plan that they feel good about. Others will get lost in the process altogether and unintentionally become uninsured.

 Governor Kemp’s plan to change private health insurance in Georgia turns back the clock to a time when consumers were at the mercy of health insurance companies. Under this plan, consumers would have a harder time shopping for comprehensive coverage, run a real risk of receiving no financial help to purchase coverage, and may find that the only available plans in their area do not cover the essential health benefits or leave them on the hook for tens of thousands of dollars.

Want to know the latest on Gov. Kemp’s private health insurance plan? Check out this timeline and sign up for email updates here. We will let you know where things stand and how you can help protect affordable, comprehensive coverage for all Georgians.

[i] Kaiser Family Foundation, January 16, 2020. Explaining Health Care Reform: Questions about Health Insurance Subsidies. https://www.kff.org/health-reform/issue-brief/explaining-health-care-reform-questions-about-health/

[ii] The ten essential health benefits are ambulatory services (also called outpatient care); emergency services; hospitalization; pregnancy, maternity, and newborn care; mental health and substance use disorder services (like counseling and therapy); prescription drugs; rehabilitative and habilitative services and devices (services and devices that help people with injuries, disabilities, or chronic conditions gain or recover mental or physical skills); laboratory services; preventive and wellness services (including chronic disease management); and pediatric services, including pediatric dental and vision services.