Challenges loom after federal approval of Kemp health plan

Gov. Brian Kemp put his signature to paperwork Thursday that makes Georgia's waiver for a scaled-down version of Medicaid expansion official as Centers for Medicare and Medicaid Services Administrator Seema Verma looked on. John McCosh/Georgia Recorder

Gov. Brian Kemp held a signing ceremony at the Georgia Capitol Thursday to mark the federal approval of a plan he says will help put insurance cards in the hands of residents who make too much to qualify for Medicaid but too little to qualify for subsidies on the federal exchange.

The $218 million-per year plan aims to expand Medicaid coverage to about 50,000 of more than 400,000 uninsured Georgia adults who could be covered – if they satisfy a work or activity requirement. It is set to begin in July 2021 with the final piece taking effect in January 2023. In other states, Medicaid waivers have been successfully challenged in court.

“To put it simply, Georgia Pathways and Access will provide the opportunity for thousands of hard-working Georgians to finally have health insurance coverage, while making health insurance affordable for millions, millions more,” Kemp said.

A top Trump administration official traveled to Atlanta for the announcement and Republican U.S. Sen. Kelly Loeffler joined state lawmakers in a show of support.

The American Heart Association and 17 other prominent nonprofits with health care missions soon criticized the limited Medicaid expansion’s requirements they say effectively reduce access to health care.

Under the plan, Georgians who make up to 100% of the federal poverty level – $12,760 for a one-person household – and who perform 80 hours per month of a qualifying activity – including working, higher education, job training or community service – can apply for health insurance through Medicaid.

If the person has access to employer-sponsored health insurance, the state will provide assistance for the employee’s share of premiums and copayments.

In addition, the state will fund a reinsurance program Kemp said will reduce the costs of premiums purchased on the exchange by an average of 10% statewide and by as much as 25% in the highest-cost rural areas.

The plan will also divert Georgians from buying insurance on healthcare.gov through the Affordable Care Act, which Kemp called overly complex to use. Instead of using the government site, the approximately 500,000 Georgians who enroll through the federal marketplace will be directed to private insurance companies.

“Georgia Pathways and Access allow us to capture the power of innovation, the power of consumerism, the power of market-driven approaches to allow us to partner with healthcare consumers and private employers around the state,” said Lt. Gov. Geoff Duncan.

For years, Democrats and some Republicans have called for Georgia to fully expand Medicaid, but that would be too expensive, Kemp said. Kemp’s team claims a full Medicaid expansion would come with a price tag of nearly $550 million a year, more than double the cost of his $218 million-per year plan. The governor unveiled his plan last November and modified it since to improve chances of winning federal approval.

Kemp’s announcement drew criticism from health policy experts and Democrats who say the governor is exaggerating the cost and leaving uninsured Georgians worse off by failing to fully expand Medicaid as 39 other states have done. Georgia has one of the highest uninsured rates in the country. Democrats have also argued Medicaid expansion is even more needed during the COVID-19 pandemic.

The American Heart Association and its nonprofit counterparts agreed in a statement late Thursday that the announcement’s timing isn’t good.

“This action would be problematic at any time,” the group said. “But it’s truly beyond comprehension that – in the midst of pandemic and recession – the federal government and Georgia are teaming up to reduce low-income residents’ access to health care.”

The state’s own fiscal analysts determined that when savings from reduced state expenses after Medicaid expansion are factored in, the annual cost to the state budget is closer to $200 million, said Laura Harker, senior policy analyst with the Georgia Budget and Policy Institute.

“It’s not as expensive as the governor has stated, to move forward with the full Medicaid expansion, and then compare it to the plans that are proposed,” Harker said. “Those plans, he said, would cost about $200 million. So you’re looking at a comparable level there as far as cost, but not covering nearly as many people.”

House Minority Leader Bob Trammell said the waivers are a mistake.

“We could have been having a signing ceremony where we had literally covered a half million Georgians,” the Luthersville Democrat said Thursday afternoon. “Rather than do that, we are in the process of providing coverage to fewer Georgians at a greater cost than if we just simply expanded Medicaid. And that’s a missed opportunity.”

The waivers could also result in a net increase of uninsured Georgians during the first year, said Laura Colbert, executive director of Georgians for a Healthy Future.

“When both of these proposals are rolled out, it is likely that more Georgians will lose health coverage than gain it in the first year,” she said. “When health insurance is more valuable than ever for the access to care and financial protections that it provides to families, state leaders would leave more Georgians uninsured.”

Kemp said he anticipated criticism of his plan from fans of healthcare.gov and proponents of a full Medicaid expansion, but he said securing the waiver represents a first step in solving the state’s health care crisis. Many of Georgia’s rural hospitals are struggling to stay open and several have closed across Georgia in recent years.

“I know that some will complain that this reform package doesn’t fix every health care problem or concern that we have in our state, and that is absolutely true, but this plan is no doubt a big first step on a long journey to ensure a safe and healthy future for all Georgians,” he said. “Doing nothing, quite honestly, was not an option.”

Centers for Medicare & Medicaid Services Administrator Seema Verma Thursday announced federal approval of Georgia’s scaled-down version of Medicaid expansion, backed by Gov. Brian Kemp and U.S. Sen. Kelly Loeffler. John McCosh/Georgia Recorder

Kemp was joined in the Capitol by federal Centers for Medicare and Medicaid Services Administrator Seema Verma, who praised the measures but warned of potential legal challenges.

“These reforms represent undeniable gains for the people of Georgia, but as surely as night follows day, there will be those that will be bent on weaponizing the legal system to support state innovation,” she said. “But rest assured, President Trump will defend the rights of states to design their own programs and work to ensure that Americans are in charge of their health care, not special interest groups.”

Both the Medicaid proposal and the private insurance aspects of the plan could attract lawsuits, Colbert said.

Similar Medicaid proposals have been struck down in federal courts because of the work requirements, she said.

“Because Georgia’s Medicaid proposal includes its own version of a work requirement, it is likely that there would be some disagreement and some parties who may want to explore a legal pathway for that,” she said.

The private insurance plan is the first of its kind and could set a legal precedent.

“It is untested, and it really pushes the boundaries of what has been outlined in law as to what’s allowable under the Affordable Care Act,” she said. “So because Georgia is the first state to test this kind of program, this kind of non-marketplace plan, there is some thinking that it doesn’t comport with the Affordable Care Act and therefore would be unlawful.”

Deputy Editor Jill Nolin contributed to this story.