Georgia's latest 1332 proposal continues to violate the ACA

For more than a year, Georgia policymakers have been pursuing a 1332 waiver that would make major changes to the way Georgians access affordable health insurance. Two prior waiver proposals from the state suffered from major deficiencies that made clear the federal government could not lawfully approve the state’s plan. Georgia is now on its third attempt, but has still failed to offer a vision that is permissible under the statute. While the most recent iteration avoids some of the more serious pitfalls of prior versions, it still does not comply with the statutory “guardrails” for 1332 waivers. Specifically, despite the state’s claims to the contrary, the waiver proposal would likely cause tens of thousands of Georgia residents to lose their health insurance coverage, especially in the first year, and therefore fails to satisfy the statutory requirement that a 1332 waiver may not decrease the number of people with health insurance coverage. The proposal’s analysis also entirely omits the consideration of factors that will increase premiums in the state. Further, the waiver proposal continues to suffer from procedural deficiencies that would make it unlawful for the federal government to approve the state’s application. On August 17, 2020, the Trump Administration deemed the application complete and opened a 30-day period for public comment, running through September 16. The waiver may not lawfully be approved, and the application in fact fails to satisfy the completeness requirements.

Georgia’s prior proposals and the current submission

Georgia has been pursuing sweeping changes to its individual health insurance market since early 2019, and is now on its third 1332 waiver proposal. The first iteration, released in November 2019, proposed allowing the sale of individual market health plans that did not offer all of the ACA’s mandated Essential Health Benefits. It also would have converted the ACA’s open-ended premium tax credit into a capped, state-administered financial assistance program that would place consumers on a waitlist when funding ran out. Using modest assumptions, experts estimated that this proposal would cause 110,000 Georgians to lose financial assistance (and therefore, in all likelihood, their health coverage). Such a waiver clearly violates the statute and cannot be approved by the federal government. In December 2019, the state proposed a new plan: benefit requirements would remain unchanged, but plans would be permitted to impose deductibles and other cost-sharing more than $5,000 greater than otherwise allowed under the ACA. This second iteration also proposed limiting financial assistance and using a waitlist when funding ran out; it was also expected to cause coverage losses and reduce the affordability of coverage, and it violated a number of other legal requirements for ACA waivers.

Both prior waiver proposals would have ended the state’s use of the HealthCare.gov enrollment platform. But they did not set-up a State-Based Marketplace (SBM) in its place. Instead, Georgia said it would operate a state-run eligibility engine but would outsource all consumer-facing activities to private web-brokers and insurance companies. That is, consumers who wanted to enroll would be required to use the website of one of several competing private companies to complete an application and select a plan; the state’s role would be limited to “back-end” functions like verifying eligibility and maintaining official records of enrollment.

The state’s latest waiver proposal, released in July 2020, does not propose making changes to benefits, cost-sharing, or financial assistance, so traditional ACA-regulated plans will continue to be sold to Georgia consumers with the standard financial assistance under the law. However, the new version continues to propose eliminating HealthCare.gov as an option for Georgia consumers but not replacing it with an SBM. Indeed, this change in enrollment platform is now the entirety of the proposal’s Georgia Access Model.[1] As in prior iterations, Georgia consumers will be required to shop on the websites of private vendors if they want to enroll in ACA coverage. Notably, these private vendors already sell plans in Georgia (and other states) as a complement to HealthCare.gov through a process called Direct Enrollment. Therefore, the waiver proposal does not create any new options for Georgia consumers to enroll; it simply takes away the HealthCare.gov option. The state proposes to regulate vendors in a manner “similar” to existing federal regulation, with the notable exception of allowing these vendors to market plans that do not comply with ACA requirements alongside Marketplace plans.

Read more: https://www.brookings.edu/research/georgias-latest-1332-proposal-continues-to-violate-the-aca/