Gov. Brian Kemp unveiled a set of waiver proposals Thursday that would remake the individual health insurance market in Georgia, aiming to lower premiums and undo federal control of the Affordable Care Act’s exchange system.
The proposals, which Kemp’s aides describe as the first of its kind, involves an ambitious set of components that each must be approved by the federal government to take effect.
One part would set aside more than $300 million in public money that the government could pay insurance companies to cover high-cost claims — thus hoping to lower premium prices.
A separate and more contentious effort would take on the structure of the ACA exchange market by moving it from federal to state control — bringing with it the $2.7 billion in federal subsidies that reduce costs to lower-income policyholders.
"We live in a divided country and in a diverse state," Kemp said, outlining the proposal in his Capitol office before a bank of TV cameras. "But it's safe to say that Republicans, Democrats and independents agree on one thing: The insurance premiums are too dang high."
As a part of the overhaul, Georgians could no longer access the federal website at healthcare.gov to enroll in ACA programs. The website would guide residents to private web brokers or encourage them to register directly with insurance companies, which is something they can’t do now.
“No one has done this yet,” said Katie Keith, a professor of health law at Georgetown University. “This is exactly what the Trump administration encouraged states to do, and no one yet has taken them up on it. So this is going to be a really big deal.”
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There’s no guarantee that Donald Trump’s administration will sign off on the plan despite Kemp’s ties to the president. But the governor and his advisers have expressed confidence that it will pass muster, and they stress that they’ve been in direct contact with the White House throughout the process.
Democrats, who broadly opposed legislation that empowered Kemp to seek the waiver, criticized the governor’s plans to cut state spending by $500 million over the next two years and blasted his opposition to expanding Medicaid, which he sees as too costly in the long run.
"While I'm glad that Governor Kemp is beginning to understand what Democrats have been saying for years, his plan doesn't go far enough," said state Sen. Gloria Butler, who said Kemp's proposal would still leave hundreds of thousands of Georgians without adequate health insurance.
“We need to get politics out of health care,” she said.
The wide-ranging proposals that Kemp outlined are not even the most closely watched facet of his health care policy. That will come Monday when he details another waiver proposal that could pave the way for a limited expansion of Medicaid.
But this separate program he rolled out Thursday, known as a 1332 waiver, would still affect hundreds of thousands of private insurance plans sold to individuals, both on and off the ACA exchange.
Those people, Kemp pointed out, have endured soaring premium prices and out-of-pocket costs. The first piece of his plan, a government program to subsidize insurance coverage, is seen by some health analysts and politicians as a way to combat that.
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The ACA exchange nationwide started with such subsidies at the federal level, in fact, and experts say part of the reason prices began to spike afterward was that the program ended. Since then, such programs have been suggested for individual states that wanted to stabilize their markets and lower consumer prices.
Twelve states have applied and received federal approval. Experts that The Atlanta Journal-Constitution consulted said Georgia’s plan would be among the best-financed of those programs, and therefore more likely to have an impact for consumers.
Kemp’s aides said they expected the program to take $104 million in state dollars and $264 million in federal dollars the first year. Those dollars would go directly to insurance companies, to satisfy up to 80% of the value of eligible claims filed.
Georgia's Legislature is full of lawmakers who identify as fiscal conservatives. One of them, House Speaker Jan Jones, R-Milton, stood with Kemp at his announcement. Asked afterward about the $300 million in public money, she said, "I haven't seen the details yet ... but I'm confident it's going to give Georgians more affordable options."
Taking aim at premiums
Georgia’s market has stabilized on its own, but premiums are still sky-high. Kemp’s aides estimate that by taking the burden of many larger claims off of the insurance companies, they can lower premiums by as much as 25% for some people in rural or underserved parts of the state.
The program carves the state into 16 regions, doling out heftier subsidies to areas with higher premiums. Southwest Georgia, where a spate of hospitals have struggled or closed, would receive more subsidies than metro Atlanta, which benefits from more competition.
The decreases would benefit higher-income people the most.
People who have income up to 400% of the federal poverty level already receive federal subsidies to lower their premiums. That’s about 90% of the people who buy plans on the exchange. People at the lower end can often pay premiums that, after subsidies, cost less than $100 a month.
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Those who are at least at 400% of the poverty level — $103,000 per year for a family of four — currently receive no subsidy and pay full price. If the estimates bear out, some of those families could save hundreds of dollars a month.
Some advocates for privatization cheered the move.
Kyle Wingfield, the president of the conservative Georgia Public Policy Foundation, has long suggested adding adding subsidies for insurers as part of Georgia’s exchange, and he welcomed the Kemp initiative on Thursday.
"If you’ve got a program that is going to lower costs overall and help people afford their own insurance and you end up with an overall better health market, it’s probably worth paying that money,” he said.
Reinvent the market
Far more controversial will be the governor’s plan to reinvent Georgia’s individual insurance market.
Kemp has long said he hoped Georgia could even set an example for other states. His proposal seeks to do that by putting some of the Trump administration’s most conservative suggestions into action.
Lower- and middle-income Georgians currently receive about $2.7 billion in subsidies from the ACA exchange market, Kemp aides said. Under their plan, Georgia would take control of that money, change how to distribute it, and loosen controls on who gets it.
Right now, only a plan that complies with the ACA’s coverage mandates is eligible for federal premium subsidies. Kemp’s plan would allow subsidies for plans that cover less.
Pre-existing conditions would have to be covered, aides said, and plans couldn’t charge more for customers who suffer from them. But the plans wouldn’t have to cover all “essential health benefits” identified in the ACA — such as emergency care and mental health services — if the customer decides to risk it and buy a plan without them.
Other people who would be eligible for subsidies are employees of small businesses whose employers give them a bonus to buy their own health coverage.
A new web portal
Right now those skimpier plans are not available on the federal exchange website, healthcare.gov. Under Kemp’s plan, Georgians who tried to access that site would be routed to a page that gave them options including private web brokers that can list plans that cover less.
Some ACA supporters were concerned about revoking the option to use healthcare.gov, a neutral platform, and pushing consumers into choosing a web broker they’re not familiar with. Some may steer people to plans that aren’t what they really want, they said.
One web broker, healthsherpa.com, is held in high regard by Kemp’s administration and some health care advocates. But not all are as well functioning technically or as clear to consumers in their presentation. Some advocates worry that customers might assume they’re purchasing plans that cover a broad array of health benefits when they’re not.
“Some of these plans that don’t offer full essential health benefits, their marketing is very confusing,” said Laura Colbert, the director of Georgians for a Healthy Future. “I would worry a lot that consumers would buy a plan that doesn’t actually work for them.”
If approved by the federal government, the plans would require a tremendous amount of work that is currently done at the federal level, necessitating an expansion of a health oversight agency in Kemp’s office. Aides said that detailed questions about implementation, however, were premature.