Today, the Centers for Medicare & Medicaid Services (CMS) and the Department of the Treasury announced the approval of Georgia’s request to implement a section 1332 State Relief and Empowerment waiver (also referred to as a section 1332 waiver) that will address systemic issues with the individual market in Georgia and result in lower premiums, greater access, and greater consumer choice in a more competitive private insurance market. The approval of this waiver builds on President Trump’s executive order that directed agencies to take actions to minimize the economic burden of the Patient Protection and Affordable Care Act (ACA) and provide greater flexibility to states. Today’s action also builds on CMS’s earlier approval of a Georgia Medicaid demonstration designed to create a pathway for qualifying working-age Georgia adults to opt into Medicaid coverage by participating in qualifying activities like work and education. Together, these actions complete an innovative package of state-led reforms that were crafted in response to the guidance and unprecedented flexibility offered by the Trump Administration.
“Since implementation, the Obamacare Exchanges have not worked for Georgians, leaving them with fewer options and skyrocketing premiums,” said CMS Administrator Seema Verma. “Today’s approval of the state’s waiver will usher in a groundswell of healthcare innovation that will deliver lower costs, better care, and more choice to Georgians in the individual market. While the cost of Obamacare’s premiums remain out of reach for countless middle class families, President Trump continues to demonstrate the power of a policy approach that prioritizes state flexibility and competition over rigid micromanagement and Washington mandates.”
The purpose of State Relief and Empowerment Waivers is to empower states to develop new healthcare programs and solutions that would not otherwise be possible under the current constraints of the ACA. Under section 1332 of the ACA, states are able to waive certain provisions of the ACA as long as the waiver meets specific statutory criteria, also referred to as “guardrails.” The guardrails require that people retain access to coverage under the waiver that is at least as comprehensive and affordable as would be available without the waiver, that the waiver covers a comparable number of individuals, and that the waiver does not increase the federal deficit.
Between 2016 and 2019, total individual market enrollment on the Exchange in Georgia declined 22%, with over 129,000 consumers fleeing the market. Georgia continues to have one of the highest uninsured rates in the country at 13.7%, leaving approximately 1.38 million people uninsured across the state. The state attributes the high uninsured rate to a variety of factors, including high premiums and out of pocket expenses, as well as low carrier participation in the individual market in certain parts of the state. According to the state, about half of Georgia’s uninsured population qualify for federal subsidies under the ACA but did not sign up for coverage.
Georgia’s innovative plan is a two-phase approach to address the growing healthcare access and affordability challenges facing many residents across the state. The first phase implements a reinsurance program starting in plan year (PY) 2022. The reinsurance program is expected to reduce annual premiums in the individual market by an average of 10% and will target savings to rural areas hardest hit by the ACA’s lack of competition and choice. The second phase transitions the state’s individual market from the Federally-facilitated Exchange to a private sector platform called the Georgia Access Model beginning in PY 2023.
The Georgia Access Model leverages the innovation and expertise of the private sector to improve the consumer shopping experience. Under the model, consumers will shop for, compare and enroll in available plans through private sector partners, including web-brokers, health insurance companies, and traditional agents and brokers. Increasing traffic to these private sector entities will not only incentivize these partners to increase their marketing and outreach to the uninsured, but will also drive improvements in the consumer shopping and enrollment experience as the market innovates to meet consumer preferences. Consumers will continue to have access to one-stop shopping where eligible individuals can enroll in the full array of subsidy-eligible qualified health plans and be assessed for Medicaid and Children’s Health Insurance Program (CHIP) eligibility.
The state projects that the combined impact of the reinsurance program and the Georgia Access Model, incentives for private entities to conduct marketing and outreach, multiple available access channels, and the state’s public awareness campaign will increase enrollment, particularly in rural areas. Allowing multiple, private web-brokers to participate will facilitate competition and provide market incentives to offer improved plan/product selection and enrollment assistance, as well as local, customized customer service to attract uninsured individuals into the individual market.
To view the approval letter and learn more about State Relief and Empowerment Waivers, click here: https://www.cms.gov/CCIIO/Programs-and-Initiatives/State-Innovation-Waivers/Section_1332_State_Innovation_Waivers-
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