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. In July 2020, Gov. Kemp revised his plan and released it to the public for comment. The revised plan is made up of two parts: 1) Reinsurance—which would help to lower premiums; and 2) the Georgia Access model—which would force consumers to enroll in coverage through for-profit insurance companies and web brokers instead of the unbiased and centralized enrollment platform that consumers know and trust (healthcare.gov).

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.

Part 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 2022 insurance plans.

Part II: Georgia Access model—Georgia consumers at a disadvantage

The second part of Gov. Kemp’s plan would make it more difficult for Georgia individuals and families to shop for comprehensive coverage, understand their options, and take advantage of financial help to lower the costs of their plans. It would put insurance companies in the driver’s seat, leaving consumers in the back seat with little control.

Gov. Kemp proposes to dismantle healthcare.gov and instead force Georgians to use profit-driven insurance company websites, e-brokers, or agents to shop for coverage

More than 500,000 Georgians bought affordable, comprehensive coverage through the ACA marketplace (also called healthcare.gov) in 2021. Nine out of ten Georgians who purchased coverage on healthcare.gov received financial help to lower their premiums and other out-of-pocket costs.

The ACA 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, they are offered financial help if they qualify, and they are 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 and run a real risk of enrolling in plans that do not cover the essential health benefits or leave them on the hook for tens of thousands of dollars. It is likely that some Georgians would end up uninsured because of the confusing, decentralized system, increasing Georgia’s 3rd in the nation uninsured rate.

In December 2019, Georgia’s Governor asked federal officials to approve changes to the state’s Medicaid program. Medicaid is a public health insurance program that currently covers half of Georgia’s children, some low-income seniors and people with disabilities, low- and moderate-income pregnant women, and very low-income parents. 

The Affordable Care Act (ACA) gave states the option to expand Medicaid to cover adults making slightly more than poverty-level wages (about $16,700 for an individual and $35,900 for a family of four). Unfortunately, Georgia is one of only 14 states who have so far refused to extend health insurance to these low-income Georgians. That leaves 408,000 uninsured Georgians ineligible for Medicaid, and at the same time, their incomes remain too low to qualify for financial help to buy coverage through the ACA’s health insurance marketplace.

Governor Kemp’s plan to change Medicaid, called Georgia Pathways, will do little to close this coverage gap. The state estimates the plan will cover only about 50,000 low-income Georgians because of the unwarranted complications that it puts in place. The Governor’s plan ultimately leaves thousands of low-income Georgians uninsured and ignores the most cost-effective solution available: Medicaid expansion.

Some low-income Georgians would be allowed to enroll in Medicaid

The Governor’s plan would allow Georgians with incomes up to the poverty line (or those with incomes of less than $12,700 for an individual or $26,000 for a family of four) to enroll in Medicaid. 

This change, sometimes called a “partial Medicaid expansion,” falls short of the ACA’s Medicaid expansion which envisioned that states would cover adults making slightly more than poverty-level income. Under the Governor’s plan, 408,000 Georgians could qualify for coverage—if they can meet the stringent requirements described below.  Under a full Medicaid expansion, Georgia could cover 567,000 low-income adults. 

Georgians would be subjected to illegal paperwork requirements to enroll in coverage

Under the Governor’s plan, Georgia adults who may qualify for coverage must prove they are working or performing certain activities for at least 80 hours a month. Work and qualifying activities include full or part-time employment, community service, vocational readiness, certain education activities, or job readiness. Qualifying activities do not include caregiving and participating in substance use recovery programs; Georgians who are homeless or have limited access to the internet would not be excused from the reporting requirements.

If the Governor’s plan is approved, Georgians would be required to complete bureaucratic paperwork to prove they are spending 80 hours a month participating in an eligible activity before they can enroll in Medicaid coverage. They must continue to prove their work or other activities to Georgia’s government for at least three months. After that, they would be subject to random requests for proof of continued work. 

Other states have attempted to implement similarly burdensome “work requirements.” In those states, thousands of qualified people lost their health care coverage because they were unable to successfully report their work due to technology barriers, insufficient notice from the state about the requirements, bureaucratic mistakes, and other issues. As a result, work requirements are currently the subject of a federal lawsuit and have been deemed illegal by three federal courts. 

Low-income Georgians must pay premiums and copays to Georgia’s government

The current proposal requires that Georgians making between 50 – 100% of the federal poverty line (between $6300-$12,700 annually for an individual) would be required to pay monthly premiums of $7-$11 per month. If an enrollee misses two months of premium payments, their coverage would be suspended and after three months of missed payments, the person would lose their coverage. When accessing health care services, enrollees would be required to additionally pay copays of up to $30 per visit. 

Traditionally, Medicaid members have not been required to pay premiums or co-pays because their incomes are so low. While the state caps enrollees’ cost-sharing at 5% of a person’s income, that could add up to as much as $600 for an individual and $1300 for a family of four per year, who are surviving on poverty-level wages. 

The plan eliminates the option for low-income Georgians to get transportation to their health appointments 

Under the Governor’s plan, Georgians who enroll in coverage would not have access to some traditional Medicaid benefits like non-emergency medical transportation. Non-emergency medical transportation (NEMT) is a free service that provides transportation to people who are covered by Medicaid who do not have their own way to get to and from health appointments or the pharmacy. The program is especially important for people with disabilities, seniors, rural residents, and people of color. 

Adequate transportation is important to the health of Georgians because in most cases people need to go to a location outside of their homes to receive medical care. Without access to reliable, safe transportation, Georgians may be forced to skip health appointments, go without medication and ultimately, experience worse health outcomes. 

According to the Georgia and Budget Policy Institute, “Cutting out transportation is not likely to significantly reduce state costs but would deeply impact rural Georgians who may live farther away from health facilities. Non-emergency medical transportation is less than two percent of traditional Medicaid spending in Georgia according to GBPI’s budget calculations. A relatively small investment in Medicaid funding could mean a huge difference to Georgians who don’t have reliable access to safe transportation.”

The plan creates a complicated, expensive bureaucracy  

The state’s proposed plan creates complicated restrictions and burdens for low-income Georgians. In addition to the paperwork requirements and required cost-sharing, the Governor’s plan would establish a member rewards account and a point reward system for enrollees. Consumers’ monthly premiums would be deposited into their rewards account, which could be used to pay future copays for health services. The point reward system would “reward” individuals for healthy behaviors and add money to the account based on those behaviors. 

Indiana initially operated a similar reward system as part of their version of Medicaid expansion. The state saw limited participation and no benefits to beneficiaries’ health because of the complexity of the system, which mirrors Georgia’s in many ways. Ultimately, these kinds of systems are expensive and ineffective at keeping Medicaid enrollees enrolled in coverage, facilitating access to comprehensive benefits, or achieving better health outcomes. 

Governor Kemp’s office has not provided an estimate of the costs to the state to operate the rewards systems, track work requirements or collect premiums. The Atlanta Journal-Constitution reported, “Other states that have tried to implement a work requirement reported costs ranging from $6 million to $272 million, according to the federal Government Accountability Office.” The intricacies of Georgia’s plan would require significant spending by the state that is not currently budgeted for in the Governor’s plan.

Georgia would pay three times more per person than needed

The Governor’s plan only expands coverage to Georgians making up to the poverty line, rather than slightly more than the poverty level (138% of the federal poverty level) as intended by the Affordable Care Act (ACA). Because Georgia is not proposing a full Medicaid expansion, the state will have to pay three times more per person to carry out this plan. When states fully expand Medicaid, the federal government covers at least 90% of the costs of the expansion and the state has to pay only 10% of the costs. If Georgia were to full expand Medicaid coverage the state would be eligible for this “enhanced match”. Instead, Georgia will pay 33% of the costs (and the federal government will pay the remaining 67% ) of the Governor’s plan–three times more than needed. 

Conclusion 

Governor Kemp’s plan to change Medicaid in Georgia does not work for Georgians. It would exclude most low-income, uninsured adults and subject those who can enroll to illegal, complicated, and expensive requirements. At the same time, the plan passes up the most cost-effective option to provide coverage to low-income adults in Georgia. 

Our elected officials have the power to ensure that every Georgian, regardless of income, have access to affordable, comprehensive coverage. Leaders of 34 other states have made the choice to expand Medicaid and their states are reaping the benefits. Georgia can join them, but elected officials need to hear from you. Ask Governor Kemp and your state legislators to expand Medicaid. 

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.