The Pandemic Doubles the Food Stamp Program Part 2

The Pandemic Doubles the Food Stamp Program Part 2

The Pandemic Doubles the Food Stamp Program

Part 2

By Erik Randolph

It has been said that haste makes waste. Apparently, this saying also applies to legislation.

Back in March with the pandemic looming, Congress quickly passed major legislation to address the pain of the pandemic. It was well known at the time that the quickness by which the pandemic legislation became law would lead to mistakes and inefficiencies. Here is just one of them.

The Food Stamp Cliff

My last blog highlighted the new food stamps rule created by Congress to address the pandemic. I hinted at how it made welfare cliffs worse.

Welfare cliffs, also known as benefits cliffs, show up whenever a loss in benefits exceeds an increase in earnings. These cliffs are disincentives for earning more money and can show up in tax and welfare programs individually or in combination. 

When it comes to the food stamp program, our research shows that normally these cliffs are fickle. Whether a cliff occurs for a family depends on several factors. In some cases, such as when there is an elderly or disabled member of the household, there are no welfare cliffs. However, if the household has no member who is disabled or elderly and especially receives the maximum deductions and allowances, there can be significant cliffs.

Now with the pandemic food stamp program, all households have cliffs—and they are steeper than ever before.

The table below shows the cliffs for households up to six6 persons when no member of the household is disabled or elderly. The benefit amounts stay the same no matter what income a household receives. Therefore, any household over the gross income limit—even just one dollar over the limit—would lose the entire benefit no matter what level of income it had prior to its income exceeding the limit.

 

Food Stamps Double - Cliff Table 2

Households with an elderly or a disabled member also have cliffs of the same magnitude. However, the gross income level when they hit the cliffs varies depending on the net income calculations, but in every case, these levels would be greater than the gross income limits listed in the table. 

From March 2020 to August 2020, these cliffs were immaterial because the Georgia Division of Family and Children Services (DFCS) received permission from the Federal government to extend eligibility certification for six months. In practice, this meant that those households no longer qualifying for benefits were allowed to stay in the program. 

However, DFCS began processing renewals again in September, and now households gaining in earnings can find themselves faced with the cliffs at the magnitudes displayed in the table.

What was Congress thinking? 

The food stamp changes were part of the Families First Coronavirus Response Act (P.L. 116-127), which had overwhelming bipartisan support. With the legislation, Congress intended to ensure the physical and financial security of families.

One concern was access to food. Congress wanted to make more food available through the food stamp program. Fair enough. 

However, changing the rule so that every household participating in the program gets the maximum allowable benefit was crude and blunt. It guaranteed steep welfare cliffs across the board. A single-parent household with one child earning $1,868  a month would lose $374 in monthly benefits if the parent received just one dollar more in income. 

The action also favored wealthier participants. A four-person household with $2,839 in monthly income gets $680, which is exactly the same amount received by a four-person household with no income despite being more vulnerable. 

 

Four Person Household Food Stamp Benefits

Congress did not have to be so crude and blunt in its approach. Just as easily, Congress could have simply increased the maximum allotment. This action would have spread out the extra funding across all incomes more evenly among the participants. 

Congress could have also been more daring by simultaneously increasing the gross income limit, making any potential cliffs less severe.

The dilemma 

Perhaps Congress chose not to consider these two easy alternatives because key members believed it would be too difficult to roll back the enhanced benefits once the pandemic is finally over. 

There is probably some truth to this fear. However, we do not escape the political difficulty. My next blog will focus on the coming food stamp crisis. 

If you have experience with the food stamp cliff, we would like to hear from you. Be sure to let us know in the comments below. 

 

Erik Randolph is Director of Research at the Georgia Center for Opportunity. This blog reflects his opinion and not necessarily that of the Georgia Center for Opportunity.

DISINCENTIVES FOR WORK AND MARRIAGE IN GEORGIA’S WELFARE SYSTEM

Based on the most recent 2015 data, this report provides an in-depth look at the welfare cliffs across the state of Georgia. A computer model was created to demonstrate how welfare programs, alone or in combination with other programs, create multiple welfare cliffs for recipients that punish work. In addition to covering a dozen programs – more than any previous model – the tool used to produce the following report allows users to see how the welfare cliff affects individuals and families with very specific characteristics, including the age and sex of the parent, number of children, age of children, income, and other variables. Welfare reform conversations often lack a complete understanding of just how means-tested programs actually inflict harm on some of the neediest within our state’s communities.

The Pandemic Doubles the Food Stamp Program Part 1

The Pandemic Doubles the Food Stamp Program Part 1

The Pandemic Doubles the Food Stamp Program

Part 1

By Erik Randolph

The monthly spending for food stamp benefits in Georgia nearly doubled since before the start of the pandemic. Surprisingly, only 45.3 percent of the increased spending is due to increased participation. The remaining 54.7 percent is due to enhanced benefits.

Congress Makes a New Food Stamp Rule

On March 18th, the U.S. Senate passed H.R. 6201 that the U.S. House of Representative passed just four days prior. President Donald J. Trump signed the bill that same day, making the Families First Coronavirus Response Act (P.L. 116-127) the second federal law to address the looming pandemic. 

The food stamp provisions in the law suspended work and work-training requirements and allowed states to request waivers to give recipients the maximum allotment for the Supplemental Nutrition Assistance Program (SNAP), the official name of the food stamp program. 

Along with all other states, Georgia requested and received a pandemic-SNAP waiver—P-SNAP for short. P-SNAP lasts as long as there is a declared health emergency by the Secretary of Health and Human Services, and the waivers are renewed on a monthly basis.

Here is what it means in practice: Currently, all households of the same size receive the exact same food stamp allotment. An eligible single mom with one child receives $374 a month in food stamp benefits, the same amount as every other eligible two-person household in Georgia, no matter what income the household earns. It does not matter if the single mom has no income or makes $22,400 annually, which is just below the gross income limit. She still receives $374 each month in benefits. 

Likewise, an eligible four-person household currently receives $680 each month no matter if the household has no income or $34,000 in income, which is also just below the gross income limit.

During normal times, DFCS calculates net income of the household by subtracting several deductions and allowances from a household’s gross income. Then, to determine the amount of the benefit, DFCS subtracts 30 percent of the calculated net income from the maximum allotment. 

Benefits and Costs 

The number of Georgia households participating in the food stamp program was 626,808 in February 2020. As of September, that total was 905,949 households—a 44.5 percent increase. The number of persons participating increased from 1,342,624 to 1,862,486 for a 38.7 percent increase. 

The regular issuance of food stamp benefits followed the increase in household participation. It increased from $163,247,601 to $236,170,166—a 44.7 percent increase. Although the average fluctuated as much as $10.58 on a month-to-month basis, the average household benefit was $260.44 in February compared to $260.69 in September, which are almost identical. 

However, P-SNAP enhanced the size of the payments to the participants. When combined with the regular issuance, the total benefits in September were $324,169,118 for a 98.6 percent increase, increasing the average household benefit to $357.82. Note that these numbers do not include $100,385,379 for free and reduced price school lunches in September that were funneled through the Electronic Benefit Transfer cards that are used to issue the food stamp benefits. 

Pandemic doubles food stamps image (2)

Was this the Best Way to Do it?

Note that Congress did not allow the states to expand the number of participants beyond the normal eligibility criteria for the program. The P-SNAP benefits of $581,085,040 spent since March were spent on those who would have normally qualified for the benefits.

Consequently, the households who benefited the most from the extra funding were those households with the higher incomes just under the eligibility limits. My next blog will show in greater detail how P-SNAP caused the welfare cliff to jump in magnitude.

In the meantime, if you have an opinion on whether this was a fair way to allocate extra funding for food stamps, be sure to let us know in the comments below.

 

Erik Randolph is Director of Research at the Georgia Center for Opportunity. This blog reflects his opinion and not necessarily that of the Georgia Center for Opportunity.

How Can You Measure Welfare Program Success? Part 2

How Can You Measure Welfare Program Success? Part 2

How Can You Measure Welfare Program Success?

Part 2

By Erik Randolph

My last blog explained dependency metrics and how they measure the success of welfare programs. However, these metrics are not the complete answer.

By also following people after they leave the system, we can gain a fuller picture of success.

This technique is common for job training programs. In fact, it is a requirement for state and local agencies receiving federal funding per the Workforce Innovation and Opportunity Act, where agencies routinely measure the status and income of persons up to a year after  exiting the job training program. 

Follow-the-person metrics can be used for welfare programs as well, as Kansas and Maine already  demonstrate. 

 

Background on Food Stamp Work Requirements

 When the U.S. economy was recovering from the Great Recession, the states of Kansas and Maine led the nation in reinstating the federal work requirement for “Able-Bodied Adults Without Dependents” (ABAWDs).   

The news media generally criticized the governments of Kansas and Maine for reinstating the rule, claiming it was cruel to push ABAWDs off food assistance. Kansas and Maine responded with follow-the-person data. 

Shortly thereafter in 2015—while Barack Obama was still president—the federal Food and Nutrition Service urged all other states to follow the federal law by reinstating the ABAWD rule. However, most states were hesitant to do so, and they continued seeking waivers and exemptions from enforcing it.

Federal law has two work requirements for the food stamp program. There is the general work requirement for persons ages 19 through 59 with notable exceptions, such as being in school half-time, physically or mentally unfit for employment, or caring for a child under six years of age or an incapacitated person. Under the general work requirement, the recipient must register for work or otherwise have good cause if they are not working at least 30 hours per week or enrolled in a job-training or workfare program. 

The second work requirement is specific to ABAWDs. This rule applies to persons ages 18 through 49, unless they are already exempt from the general work requirement or if they are responsible for a child under 18 years of age, or pregnant. Non-exempt ABAWDs cannot receive benefits for more than three months in a 36-month period unless they work for an average of 20 hours per week on a monthly basis or they participate in an approved “employment and training” program. 

States may, and routinely do, waive the ABAWD rule in areas within their state with unemployment over 10 percent, and they have the discretion to exempt up to 15% of persons from the requirement. 

During the Great Recession, Congress suspended the ABAWD rule until September 20, 2010, but many states continued waiving the requirement well into 2017. 

 

Kansas and Maine Break New Ground 

Under the administration of Governor Sam Brownback, Kansas restored the ABAWD rule in October 2013. The Kansas Department for Children and Families, with the help of the state’s Department of Labor, followed the wages of individuals exiting the food stamp program. Departments of labor typically administer unemployment insurance programs that collect wage data. 

According to a report by the Foundation for Government Accountability, Kansas had 28,144 ABAWDs on food stamps in October 2013. One year later, in October 2014, there were 9,193. The following October, the number dropped to 7,601.

The drop in enrollment among this population may be alarming if one assumes these individuals were worse off, as many in the news media did. However, the follow-the-person data showed otherwise. On average, the annual wages of these individuals rose above the poverty line, from $6,703 in December 2013 to $13,304 in the fourth quarter of 2014. 

 

Maine had a similar experience.

No longer requesting an ABAWD waiver in 2014, the Maine Departments of Labor and Health & Human Services cooperated in following the wages of the 6,866 who did not comply with the reinstatement of the work requirement and exited the program. The Governor’s Office of Policy and Management under the political leadership of Governor Paul LePage analyzed the wage data. Its report showed total wages for this group more than doubled from the third quarter of 2014 to the fourth quarter in 2015. On average, quarterly wages increased from $1,984 to $3,514, also raising the wages of many ABAWDs above the poverty level. 

 

 

What Follow-the-Person Metrics Could Mean for Georgia and Other States

Unfortunately, both Kansas and Maine abandoned the follow-the-person data collection—not for policy reasons related to the effectiveness of the metrics but because of changes in political leadership.

Nevertheless, the states demonstrated that follow-the-person metrics can be applied to welfare programs in addition to job training programs. There is no good reason why Georgia and other states could not also implement follow-the-person metrics for welfare programs by having their welfare agencies cooperate with their departments of labor.

Additionally, states are not limited to using department of labor wage data. They could also initiate surveys to collect more detailed data on the well-being of individuals after exiting a program. 

Do you think it would be good for Georgia to begin using dependency and follow-the-person metrics to measure the success of welfare programs? Let us know in the comments below.

 

Erik Randolph is Director of Research at the Georgia Center for Opportunity. This blog reflects his opinion and not necessarily that of the Georgia Center for Opportunity.

DISINCENTIVES FOR WORK AND MARRIAGE IN GEORGIA’S WELFARE SYSTEM

Based on the most recent 2015 data, this report provides an in-depth look at the welfare cliffs across the state of Georgia. A computer model was created to demonstrate how welfare programs, alone or in combination with other programs, create multiple welfare cliffs for recipients that punish work. In addition to covering a dozen programs – more than any previous model – the tool used to produce the following report allows users to see how the welfare cliff affects individuals and families with very specific characteristics, including the age and sex of the parent, number of children, age of children, income, and other variables. Welfare reform conversations often lack a complete understanding of just how means-tested programs actually inflict harm on some of the neediest within our state’s communities.

How Can You Measure Welfare Program Success? Part 1

How Can You Measure Welfare Program Success? Part 1

How Can You Measure Welfare Program Success?

Part 1

By Erik Randolph

If you want to know how well welfare programs work, ask welfare agency administrators how they measure success. This was suggested by Randy Hicks, President and CEO of the Georgia Center for Opportunity (GCO), years ago. Almost invariably these administrators will answer that they measure success by how many people they serve. When the total number of people they serve goes up, the programs are more successful. Or are they?

To the contrary, program participation does not measure success. Furthermore, the chances are that welfare agency administrators lack the metrics to tell us how successful the programs truly are.

Program participation can measure demand for the program, or it might indicate the number of people in need. In these cases, program participation is useful information. But does it actually measure success? 

The more important goal of welfare programs is to help people overcome their financial difficulties and escape poverty. This enables them to live more fulfilling lives. Public policy should not encourage them to languish on assistance for years on end but rather help them improve their circumstances until they no longer need assistance, or their reliance on assistance becomes lessened. Welfare agencies generally lack metrics to effectively measure this important goal.

Which revises our original question slightly: How can you measure success?

Dependency Metrics

One potential way to measure success is to use dependency metrics that evaluate the percent of the population who are dependent on major welfare programs. This is partially done at the federal level but not at all at the state level.

In 1994, Congress passed the Welfare Indicators Act. It focuses on food stamps, Temporary Assistance for Needy Families (TANF) cash grants, and Supplemental Security Income (SSI). Every year, the U.S. Secretary of Health and Human Services is required to file a report with Congress showing dependency on those three welfare programs.

The most recent report was released in 2018. The pie chart below comes from page eight of that report, showing for the year 2015 the percentages of the national population according to their proportion of their total income dependent on the value of food stamps, TANF cash grants, and SSI. The higher the proportion of an individual’s income that comes from these three assistance programs, the worse off the person probably is. For example, if the value of food stamps constitutes more than 50 percent of an individual’s income, that person cannot be well off financially. In comparison, when food stamps constitute 25 percent to 50 percent of an individual’s income, it means the person has more additional income and is better off than when food stamps comprise more than 50 percent  of total income. And having less than 25 percent of total income coming from food stamps is better than having 25 percent to 50 percent of total income on food stamps.

Georgia has the ability to generate dependency metrics through the Georgia Gateway, including TANF cash grants, food stamps, medical assistance, and two other programs. These are means-tested programs, meaning the Department of Human Services has not only participation numbers but also income information of the applicants and recipients. The Department could relatively easily have its I.T. crew write scripts to spit out reports periodically showing the number of individuals and families by dependency on their income on those programs captured through the Gateway. Coupled with Census data, the Department could produce periodic reports showing how dependency changes over time and further break down the data by demographic groups. 

Furthermore, because every individual has a unique identifier, the I.T. crew could produce additional scripts to follow people over time. This would allow for more sophisticated analytics showing the financial progress of people and families in the system. 

Dependency metrics are not perfect. They do not capture persons who would be eligible for the program but do not participate. However, the number of these individuals are regularly estimated and could be presented as additional information in the analysis. 

Ideally, it would be best if the dependency metrics captured all assistance programs. Currently, this is not possible.

Assistance Programs Breakdown

Exactly How Many Programs Do People Benefit From? 

Often people qualify for multiple assistance programs. Their children might be on Medicaid and receiving free school lunches. At the same time, the household may be receiving food stamps. Additionally, if the parent or parents work, they may be receiving the Earned Income Tax Credit (EITC) and Additional Child Tax Credit. We just listed five programs that welfare families typically receive. 

And there are more programs. If the family has young children under five, they could receive food packages from the Women, Infants, and Children (WIC) program. Additionally, the family may be receiving childcare assistance, Section 8 rental assistance, and/or energy assistance.

Now you might think that we have a dataset somewhere telling us the total number of welfare programs families are benefiting from. If you assumed that we do, you would be wrong. No such dataset exists.

The reason? First, the welfare system is disjointed. There is no single agency or dataset that can tell us the total number of programs people are on. Even Georgia’s award winning Gateway, which is one of the better integrated eligibility systems in the country, cannot tell you. While the Gateway can tell us about food stamps, Medicaid, WIC, TANF, and subsidized childcare services, it is missing the refundable tax credits, free school lunches breakfasts, Section 8 rental assistance, and other welfare programs not listed. 

Second, statistical sources do not include all welfare programs in their questionnaires and have other limitations, such as serious time lags. For example, the American Community Survey asks about food stamps, Medicaid, and Supplemental Security Income but practically none of the other programs, making a statistical inference for the complete picture impossible. 

The Survey of Income and Program Participation gets us closer, giving us childcare assistance, WIC, energy assistance, and public housing, among others. However, it is still missing the refundable tax credits, including the EITC which is one of the big three welfare programs. Worse, SIPP is structured for longitudinal studies that makes the survey totally impractical for monitoring program participation on a regular and timely basis.

Adopting Dependency Metrics in Georgia

Dependency metrics would improve our ability to measure success, and state leaders should consider implementing them in Georgia. 

Georgia would do a better job than the federal government with dependency metrics. The Gateway houses the data for critical programs, enabling Georgia to produce monthly estimates, more timely estimates, and for more programs. In contrast, the Feds apparently cannot meet its obligation in producing annual reports, provides only national data for only three programs, and there are significant time lags. The most recent Federal report came out on May 4, 2018, with 2015 and some 2016 data.

Once implemented at the state level, dependency metrics will improve over time. If and when further integration, consolidation, and streamlining of eligibility systems occur, as recommended by GCO, dependency metrics will become more complete and more useful.

However, they are not the sole answer. There is another way to measure success that would complement well dependency metrics. This will be the topic of my next blog.

In the meantime, do you have ideas on how we can measure success in welfare programs? We would love to hear them. Be sure to put them down in the comments below.

Erik Randolph is Director of Research at the Georgia Center for Opportunity. This blog reflects his opinion and not necessarily that of the Georgia Center for Opportunity.

DISINCENTIVES FOR WORK AND MARRIAGE IN GEORGIA’S WELFARE SYSTEM

Based on the most recent 2015 data, this report provides an in-depth look at the welfare cliffs across the state of Georgia. A computer model was created to demonstrate how welfare programs, alone or in combination with other programs, create multiple welfare cliffs for recipients that punish work. In addition to covering a dozen programs – more than any previous model – the tool used to produce the following report allows users to see how the welfare cliff affects individuals and families with very specific characteristics, including the age and sex of the parent, number of children, age of children, income, and other variables. Welfare reform conversations often lack a complete understanding of just how means-tested programs actually inflict harm on some of the neediest within our state’s communities.

Health Care Waiver Approvals Are Good News

Health Care Waiver Approvals Are Good News

Health Care Waiver Approvals Are Good News

By Erik Randolph

Amidst the noise of the presidential election, the mainstream news media missed a major announcement the prior Sunday that promises to positively impact the lives of many Georgians.

 

The announcement could signal a turning point in the near future, giving hope to many Georgians suffering from the unintended consequences of the Affordable Care Act (ACA) since its implementation seven years ago.

 

Georgia has taken advantage of Section 1332, which is possibly the best provision in the ACA. It allows states to better design a system of providing health insurance coverage by applying to the federal government to waive burdensome requirements of the law itself and some other federal regulations.

 

Last year, the state legislature gave Governor Brian Kemp the authority to seek waivers from the federal government, and the governor has done just that. Without much fanfare, Georgia’s Section 1332 waiver request, as amended, was finally approved on Sunday. This approval complements Georgia’s other approved waiver request on Medicaid that received widespread press coverage and was announced during a joint press conference on October 15th with the governor and Seema Verma, administrator of the federal Centers for Medicare & Medicaid Services. 

 

First, let’s review just some of the mess the federal law created.

 

The Price Sticker Shockwave

 

The Affordable Care Act has not lived up to its name, as demonstrated by spiking health insurance costs, especially in the individual markets.

 

Once the law went into effect and the new premiums took hold in the individual markets, there was a price sticker shockwave that rolled across the country. The Manhattan Institute for Policy Research calculated price increases varying from 64.5% for a 40-year-old female to a 178.8% increase for a 27-year-old male. 

 

Our own analysis estimated premiums increased 17 times faster than the general inflation rate from 2014 to 2019. On average, Georgians suffered average price increases of 70.7% for Bronze plans, 77.3% for Silver plans, and 70.4% for Gold plans.

 

The chart below shows one result of our research. We estimated that the median annual price for a pre-ACA insurance plan for a family of four in Georgia was $5,386 in January 2013. For 2019, the median prices for a family of four rose to $17,550 for a bronze plan, $18,644 for a silver plan, $23,065 for a gold plan, and $26,081 for a platinum plan.

 

 

 

ACAHIX

Moreover, because of the unaffordability of the premiums, many who had insurance coverage prior to the ACA found themselves uninsured. As pointed out in the governor’s Section 1332 waiver application, 129,000 Georgians dropped out of the marketplace from 2016 to 2019, a staggering decline of 22%.

A major culprit for the price spikes and loss of coverage is the ACA itself. Many insurance policies in effect prior to the law became immediately ACA noncompliant because the law redefined what constituted a policy and mandated changes to how insurers calculate premiums. This was exacerbated by how the federal bureaucracy initially implemented the law. The political promise of “if you like your plan, you can keep your plan” turned out to be untrue. 

The impact was not just on the individual markets. Employer-based plans also experienced major price increases, but this and other unintended consequences are a topic for another day.

Hope with Reinsurance and Better Access

The first part of the approved Georgia plan will begin in 2022, which naturally brings up the question: why must we wait so long? The short answer is because we’re dealing with government bureaucracies.

Despite the slowness, the Reinsurance Program will pass through federal funding from anticipated savings from the Premium Tax Credit, expected to be $285 million in Plan Year 2022, matched with state funds from either general revenue or a state user fee to reinsure insurers to bring down the cost of premiums. The reinsurance kicks in only for insurance claims above preset thresholds up to predetermined caps. It also varies based on three regions in the state intended to bring down more quickly the cost of premiums in those regions hurt worse from the premium increases since implementation of the ACA. The reinsurance only pays for a portion of the cost above those thresholds, up to the caps, to make sure insurers have a stake in the game to keep costs down.

Governor Kemp’s approved application estimates the Reinsurance Program will, on average, increase individual market enrollment by 0.4% and lower premiums by 10.2% in the first year, which are hopefully just conservative estimates considering the damage done to the market by the ACA. The Reinsurance Program targets individuals and families between 100% and 400% of the federal poverty level (FPL), who account for 57% of Georgia’s uninsured population.

 

pie chart GA's uninsured

The second part of the plan—that will begin with a delayed implementation in 2023 over concerns of the impact of COVID-19 and to ensure a smooth transition—is the Georgia Access Model addressing a major complaint about the ACA. The law makes Georgians go through the Federal Facilitated Exchange (FFE) to buy insurance on the individual markets. Government’s overreach includes requiring individuals to prove to bureaucrats that they endured a qualifying life event before they are allowed to buy health insurance during any time outside the government’s mandated enrollment period. 

To be run by the state instead of the federal government, the Georgia Access Model will still allow an online exchange as before, but, importantly, it frees individuals from the mandate of going through the exchange, allowing them to shop through multiple channels, including private distribution channels, brokers, and agents. It promises to return health insurance shopping to the way functioning markets work. 

Georgia is expected to run the new exchange more efficiently. Today, FFE is separate from the Georgia Gateway that handles Medicaid. Georgia will link the two together, which brings up the approved Medicaid waiver.

Helping the Poor with Pathways to Coverage

In addition to the Section 1332 waiver, the federal government also approved a Section 1115 waiver, allowing modifications to the Medicaid program. This waiver addresses adults under 100% FPL, which is 28% of the uninsured. The remaining uninsured are children under 100% FPL who already qualify for Medicaid, and families over 400% who will benefit from the lower premiums. 

Here the Georgia state legislature and Governor Kemp need to be commended for not falling into the Medicaid expansion trap. What they succeeded in doing is getting the federal government to allow Georgia to transform the program into one that makes more sense.

One big problem with Medicaid is that it traps people in poverty. There are welfare cliffs and marriage penalties associated with it. Another big problem is that the health outcomes are among the worst of any health care system in the nation. The states that expanded Medicaid have subjugated more individuals to these negatives.

Instead, Pathways to Coverage establishes a demonstration project to help adults up to 100% of the federal poverty level. Private market practices will be introduced, including incentivizing healthy behavior and creating member reward accounts. The goal is to create a pathway to help persons transition to higher quality private coverage, consistent with other welfare policy goals of not having adults languish below the poverty line by helping them move out of poverty.

The Long Run

Ultimately, implementation of these approved plans will determine their success. Therefore, the state administration needs to be vigilant and continue working on improving.

Considering constraints placed on the states by the federal government, it is probably the best deal Georgia could have received. But, as officials in the Kemp administration recognize, these waivers are not the complete solution. More needs to be done.

What we would like to see is a more aggressive agenda to adopt our vision of establishing a true risk equalization system that can deliver universal coverage with the highest quality of care only possible through leveraging the free-enterprise system. Switzerland has already shown the way, and you can read more about our vision and the Swiss system here.

If you had personal experience with the FFE, escalating health insurance costs, lost your coverage, or other thoughts on the best solutions, we are interested in your story and thoughts. Be sure to post your experience in the comments below.

*Erik Randolph is Director of Research at the Georgia Center for Opportunity. This blog reflects his opinion and not necessarily that of the Georgia Center for Opportunity.