State Rep. Allen Peake and state Sen. Renee Unterman both say it’s time for Georgia to consider waivers to make changes to the state’s Medicaid policy. BOB ANDRES / BANDRES@AJC.COM

After Obamacare repeal fails, Georgia leaders to seek Medicaid waivers

The collapse of the GOP health care overhaul has Georgia’s leaders wrestling over whether to stand pat and let a funding crisis continue to threaten the state’s fragile hospital system or seek changes that could open the spigots for more federal dollars.

Amid uncertainty about how insurance markets will be affected by the U.S. Senate’s inability to repeal the Affordable Care Act — as well as President Donald Trump’s warnings that he could end payments to insurers in an attempt to restart efforts to dismantle the health care law — Georgia leaders are looking for longer-term solutions.

Influential conservatives in the state are already preparing for a debate next year over how to craft waivers to seek what could be vast changes to the state’s Medicaid program.

They cast the waivers as a conservative effort to shave the state’s costs by imposing new standards on recipients. They note that state officials would turn to a familiar figure to sign off on the changes: former Georgia U.S. Rep. Tom Price, now Trump’s health secretary. And they steer well clear of the E-word — expansion — to describe how they might work.

“It’s a good thing that Congress has finally played their hand — they’re inept and cannot do anything — and now it’s time to turn our hand over and play our cards,” said state Sen. Renee Unterman, the chairwoman of the chamber’s Health and Human Services Committee.

“I don’t see how you can solve these problems without waivers,” the Gwinnett Republican said. “We have to use every tool in the toolbox. And if you don’t, it’s going to get worse.”

But any significant change to Georgia’s health policy likely faces a complicated journey.

Gov. Nathan Deal, who previously said he was open to seeking waivers, said in a statement Monday that any significant change to Medicaid policy should first be approved by lawmakers. Such a vote would come against the backdrop of the 2018 elections — when all 236 seats in the Legislature and every statewide office is up for grabs.

And fiscal conservatives, who have long said that Georgia relies too heavily on federal funding, worry the waivers could be a less-contentious way to boost their Medicaid rolls. Some states have used the waiver program to expand their Medicaid programs on their own terms — and snag more federal funding to pay for costly health care.

Jim Jess of the Georgia Tea Party said waivers could help Georgia shake off “onerous” regulations, but he also warned it could increase the state’s dependency on federal dollars.

“We take Medicaid now because we are addicted to federal money,” he said. “We need to break this cycle by reducing program costs, and waivers could be a way to do this — if they are crafted in an appropriate way.”

‘A safety net’

It’s a debate Georgia leaders never envisioned would still be raging five years after Georgia and 18 other states rejected an expansion of Medicaid under the Affordable Care Act. But the stunning defeat last week of even a pared-down effort to undercut the health care law spurred fed-up state lawmakers to ramp up their discussions.

The governor has repeatedly said he has no regrets about his Medicaid decision, which would have allowed the federal government to pay 90 percent of the cost of the expansion that would add roughly 600,000 more Georgians to the rolls — but put the state on the hook for much of the rest.

At the same time, though, Georgia’s struggling network of rural hospitals is facing an unprecedented crisis from the damaging mix of uninsured patients, stubborn poverty rates and stagnant growth. Dozens of rural hospitals face funding shortfalls so acute they threaten access to care, and at least eight have shut down since 2001.

Under financial pressure, the governor briefly flirted in 2015 with wide-ranging waivers that would have sought more flexibility — and more federal funding — for the Medicaid program. He would now have the backing of a growing number of Republicans who say they’re willing to revisit those discussions.

“What we need is flexibility to be able to adapt to the needs of Georgians while balancing fiscal restraint,” said state Rep. Allen Peake, a Macon Republican. “That’s the crucial piece of the puzzle we’ve got to have.”

Georgia policymakers have several models to pick and choose from. Arkansas used a waiver to let people on Medicaid buy private health insurance. Indiana’s waiver allowed the state to require certain Medicaid recipients to pay modest premiums and contribute to health savings accounts. 

And Deal said earlier this year that Georgia could explore cost-cutting changes to “mandated minimum coverage” requirements that fund a range of health services to Medicaid recipients.

Much remains uncertain, including whether a waiver would enlarge Georgia’s Medicaid rolls and boost its federal funding, and how the state would pick up its share of the tab.

Supporters hope Price can exert influence in his home state. Although he doesn’t have the power to transform Medicaid funding into the lump-sum block grants that state leaders have long sought, he has broad discretion to make other changes to health care funding that could be more politically acceptable to conservatives.

For one, he could let states require that certain new Medicaid enrollees be looking for work or undergoing job training. Others suggest a two-tiered system that offers full Medicaid coverage to people with certain disabilities but fewer services for the able-bodied who aren’t seeking work.

“Medicaid ought to be a safety net, but sometimes it’s an impediment to people getting a job,” said state Rep. Jay Powell, the chairman of the House’s tax-writing Ways and Means Committee. “The state should explore every possible waiver that will give us the flexibility to encourage people to work and protect the people who need protecting.”

A politicized process

The wide-open race to succeed Deal, who cannot seek a third term in 2018, is likely to spice up the discussions.

The two Democrats in the running — state Reps. Stacey Abrams and Stacey Evans — have revived their calls for a full Medicaid expansion. They say it would not only extend health coverage to hundreds of thousands of needy Georgians but also shore up the state’s ailing rural hospital network.

“Georgia must acknowledge the imperative of providing health care coverage to our rural communities and working poor and accept full expansion,” Abrams said, “particularly given that Medicaid expansion states have recognized economic benefits by extending access.”

That idea is a nonstarter in the GOP-controlled Legislature, which passed a law in 2014 that gives lawmakers the final say over expanding Medicaid. All four Republican candidates for governor oppose an outright expansion, though several signal they are open to waivers.

Secretary of State Brian Kemp said he trusts Deal and Price to “develop conservative solutions that release the death grip” of Obamacare, while state Sen. Hunter Hill’s campaign said he would work with Price to “allow Georgia the greatest degree of flexibility” in spending Medicaid dollars.

And Lt. Gov. Casey Cagle said Georgia should devise a Medicaid plan that offers a “helping hand for our most vulnerable citizens” but would not expand the program to include able-bodied, childless adults.

Leading lawmakers, meanwhile, say they are ready to start the debate.

“If there is a waiver program that will increase efficiency and access and does not amount to the expansion of the Medicaid, we will be foolish not to do so,” said Powell, a Camilla Republican. “What we have now is not working. And with the gridlock in Washington, we can’t expect them to solve it for us.”

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