GA Individual Market Reform Approved Over Industry Objections
While industry leaders agree that the reinsurance phase will lower premiums, many oppose the individual market reform’s departure from both federal and state-based exchanges.
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- CMS has approved a Section 1332 demonstration for Georgia which, in part, moves the individual market to a private sector platform.
“I’m thrilled to support this comprehensive state-led reform that will help thousands of working adults in Georgia gain access to coverage for the first time in a way that addresses both their health and socio-economic needs,” said CMS Administrator Seema Verma.
According to the CMS announcement, Georgia is implementing this new strategy to address uninsurance among Georgians who are eligible for federal premium subsidies as well as uninsurance among those who cannot qualify for subsidies and cannot afford individual health insurance plans.
“Georgia continues to have one of the highest uninsured rates in the country at 14.8 percent with approximately 1.4 million people uninsured across the state,” CMS noted. “The state attributes the high numbers of uninsured individuals to a variety of factors, including high premiums, unaffordable out-of-pocket expenses, and low insurer competition in the individual market.”
Between 2016 and 2017, enrollment in the individual insurance market took a dive, as did the average number of insurers per state nationwide, according to Kaiser Family Foundation. The state currently has 6 insurers statewide, which is higher than the national average of 4.5 and, other than in 2014, has always exceeded or met the national average of insurers per state.
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The reform has two phases.
Phase one will employ a state-based reinsurance program. The state estimated that the reinsurance program will lower beneficiary premiums by 10 percent on average. These reductions will be particularly targeted for rural regions that have seen especially low competition on the individual health insurance market.
The second phase goes into effect in 2023 and establishes the Georgia Access Model.
With this model, Georgia will no longer use HealthCare.gov for its individual insurance marketplace, nor will it establish its own state-based exchange. Instead, Georgians will purchase individual health insurance market plans through private sector partners, brokers, agents, and web brokers.
“This will drive expanded access to enrollment options and improvements in the consumer shopping experience as the market innovates to meet consumer preferences,” CMS stated. “Consumers will continue to have access to and be able to enroll in the full array of metal-level plans, including subsidy-eligible qualified health plans, and be assessed for Medicaid and CHIP eligibility.”
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Many industry leaders voiced support for the first half of the proposal but contested the second phase.
Reinsurance has already been implemented in several states, such as Colorado and New Jersey. Colorado saw a premium drop of 20.2 percent on average between 2019 and 2020 as a result of the reinsurance program, a report from the Colorado Health Institute found.
“Reinsurance is an important tool to help stabilize health insurance markets. Reinsurance programs help insurance companies cover the claims of very high cost enrollees, which in turn keeps premiums affordable for other individuals buying insurance on the individual market,” said a letter signed by twenty-three provider organizations including the American Lung Association.
“Georgia’s proposal will create a reinsurance program starting for the 2022 plan year and continuing for five years. Based on the initial analysis commissioned by the state, this program is projected to reduce premiums by 10% in 2021 and increase the number of individuals obtaining health insurance through the individual market. This would help patients with pre-existing conditions obtain affordable, comprehensive coverage.”
Critics were concerned by the speed with which the proposal received approval, given industry opposition to the Georgia Access model during the public comment period.
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In a statement, Laura Colbert, executive director of Georgians for a Healthy Future, noted that the final public comment period for the Georgia Access proposal closed with 1,800 comments. This was a record number of comments for this type of proposal.
“The overwhelming majority of those comments were in opposition and came not only from Georgians but from a wide array of respected organizations, like the American Medical Association and the Black Mamas Matter Alliance, as well as the American Academy of Pediatrics and the United Way,” stated Colbert. “Despite this, Georgia has just earned one of the fastest approvals for the proposal.”
The state is also reforming its Medicaid program based on the administration’s Healthy Adult Opportunity (HAO) guidance, a Medicaid block grant, the CMS announcement added. Pathways to Coverage is the state’s section 1115 Medicaid demonstration for individuals aged 19 to 64 with an income of up to 100 percent of the federal poverty level.
In order to be eligible for the program, individuals must work 80 hours a month or participate in relevant, qualifying pursuits. There are options tailored to beneficiaries with disabilities.
The section 1115 demonstration waiver will be implemented on July 1, 2021. The state estimated that the demonstration will add 30,000 Medicaid enrollees in its first year. Over the course of its five year span, almost 65,000 Georgians will either receive Medicaid coverage or Medicaid premium assistance through the demonstration.
