Georgia doesn’t often get to claim a leading role in matters related to health care. At least, not in a good way. That is changing, in a very big way.
After months of behind-the-scenes work, Gov. Brian Kemp this past week unveiled the specific types of flexibility he is requesting of the federal government, to make better use of the billions of dollars Washington spends on Georgians’ health insurance via the Affordable Care Act.
This entire exercise was necessary because the ACA didn’t simply give people money to buy insurance. It also mandated a host of regulations that restricted competition, drove insurers out of the marketplace and limited consumers’ options. Insurance premiums on the individual market have more than doubled in Georgia since the ACA took effect, and many young, healthy Georgians simply opted out. Only those who have significant health problems and/or received mostly subsidized insurance are still buying plans, leading to a potential “death spiral” in the marketplace.
The ACA gave states the opportunity to correct some of those ills by allowing them to waive some of its regulations. The Trump administration has been particularly interested in seeing states take this action, and is likely to approve Georgia’s requests.
The plan revealed this past week includes two main components. First, the state would create a fund to pay directly for Georgians with the highest healthcare bills. This “reinsurance” program for the individual insurance market, starting in 2021, would keep those costs from spilling over onto healthier consumers’ plans, which contributed to the premium spikes. Prices are instead expected to drop by double-digits — and by as much as 25% in some areas that are mostly poor and rural.
Reinsurance is pretty standard stuff at this point; more than a dozen states already have used waivers to establish such programs. The second component is where Georgia is blazing the trail.
Starting in 2022, Georgians would no longer have to shop on the federal exchange, Healthcare.gov, to buy subsidized plans. They would instead be directed to private brokers and marketplaces, where they would see a broader array of choices.
More importantly, Georgians who are eligible for those subsidies — including families of four earning up to $103,000 this year — would be able to use them on more kinds of plans. They wouldn’t have to buy plans with all of the “essential health benefits” the ACA mandated, which also helped drive up premiums. They’d be able to buy less coverage if they want, or to buy into arrangements such as “association health plans” through their employers. They would also for the first time be able to pool the subsidies with tax-advantaged contributions from their employers to buy insurance.
One key clarification here: All of the eligible plans would still have to cover pre-existing conditions. The ACA doesn’t allow states to waive that protection even if they wanted to do so, despite some of the false claims congressional Democrats have been making to the contrary.
In short, this would be a transformative step for the individual health-insurance market in Georgia. More choices. Lower prices. More flexibility and customization.
There’s plenty of work left to be done. Georgia still needlessly restricts competition among providers, especially hospitals, through its “certificate of need” regime. Consumers still don’t know in many cases what a particular health service will cost ahead of time, due to the lack of price transparency. The promise of telemedicine is still hampered by lack of awareness, adherence to old practices and, in some parts of the state, subpar broadband infrastructure. And costs are still rising too quickly for employees of large, self-insured companies.
The waiver process was never intended to solve those problems. Georgia’s lawmakers will have to find other ways to address them. But Kemp and his team have taken great advantage of the opportunities that are possible through the waivers, and Georgians will be better off for it.
Dalton native Kyle Wingfield is president and CEO of the Georgia Public Policy Foundation (www.georgiapolicy.org).