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.