Just four months ago, Gov. Brian Kemp celebrated federal approval of his unconventional proposal to reshape Georgia’s Medicaid program at a glowing press conference. Now the centerpiece of his health care policy is in doubt and a fresh political battle is brewing.

President Joe Biden’s administration put on hold Kemp’s proposal to provide health coverage to thousands of low-income and uninsured adults if they meet a work or activity requirement, saying it is “unreasonably difficult or impossible” to meet those demands amid a pandemic.

The decision by Elizabeth Richter, the acting administrator for the Centers for Medicare and Medicaid Services, surprised some health care advocates and gave Democrats fresh hopes of achieving a long-sought dream of a full-scale expansion they say would, among other things, insure more Georgians than Kemp’s plan and prop up the state’s ailing rural hospitals.

They’re also hopeful that incentives to be tucked into the $1.9 trillion coronavirus relief package make expanding Medicaid even more enticing for Kemp and Republican legislators.

Georgia now has 30 days to respond to the administration’s move, which formally changed the status of Kemp’s plan, known as Georgia Pathways, from “approved” to “pending.”

In a letter to state officials, Richter said that “allowing work and other community engagement requirements to take effect in Georgia would not promote the objectives of the Medicaid program.”

In a statement Monday, Kemp’s office said the federal criticism ignores “key details of Georgia’s innovative, unique approach” and accused Biden of attempting to “take away healthcare options for low-income Georgians hit hardest by the COVID-19 pandemic.”

“This is typical Washington, D.C., politics, and our office will do everything we can — both legally and administratively — to not allow them to block implementation of Georgia Pathways at the eleventh hour,” Kemp spokesman Cody Hall said.

The governor had cast the overhaul, along with a separate “reinsurance” plan to lower premium prices, as the GOP’s fiscally conservative answer to persistent demands from critics that he and other Republicans endorse a full-scale Medicaid expansion.

Calls for full expansion were a cornerstone of Democratic campaigns for governor and other statewide posts since then-Gov. Nathan Deal said in 2013 that he wouldn’t expand the Medicaid program under the Affordable Care Act because it was too costly in the long run.

Kemp echoed other state Republicans by subscribing to that view, and instead he endorsed a narrowly tailored initiative to add an estimated 50,000 poor Georgians to the rolls in two years and help “hardworking Georgians climb the ladder.”

The proposal incensed Democrats and health care advocates who called it a feckless half-measure and questioned anew why Georgia couldn’t adopt a full Medicaid expansion to all the state’s very poor, as laid out by the Affordable Care Act and approved by 38 other states and the District of Columbia.

They noted that even if Kemp’s program was implemented, more than 350,000 Georgia adults wouldn’t meet the state’s threshold for Medicaid, according to estimates from the governor’s office. And they cast the federal reversal as a new opening for Georgia.

“We should take advantage of this,” said state Rep. Scott Holcomb, D-Atlanta. “Scrap this bad plan and replace it with a full Medicaid expansion. Georgia will save money, insure more people, improve access to health care and boost rural hospitals.”

Supporters of Kemp’s proposal said the governor deserves the chance to prove his “Georgia-centric” proposal could work.

“We’ve seen work requirements successfully work with other welfare programs,” said Kyle Wingfield, head of the conservative-leaning Georgia Public Policy Foundation. “And it would be disappointing to see the Biden administration pull the plug on it before it got a chance.”

‘Positive step’

It was a dizzying turnabout for state officials. After months of review, Kemp’s overhaul was green-lit by then-President Donald Trump’s top Medicaid official and lauded at a Capitol press conference in October. The same day, Democrat Stacey Abrams’ political network launched TV ads calling on voters to “heal” Georgia by ousting politicians who oppose full expansion.

Right now, Georgia’s Medicaid program mostly covers children, as well as some adults, such as those the government has declared as disabled.

Under Kemp’s plan, other working-age Georgians could apply but would have to meet requirements the state would impose. That might include working for a registered employer for 80 hours a month or attending college full time.

Biden’s November victory upended Kemp’s proposal far quicker than some health care advocates expected.

Laura Colbert of the advocacy group Georgians for a Healthy Future said she was surprised at how speedily the Biden administration pulled back approval for Kemp’s overhaul. But she cautioned that much depends on how the governor and federal officials respond next.

“It’s a largely positive step forward, but there’s a risk that Gov. Kemp and state leaders walk away and leave low-income Georgians with nothing,” said Colbert, whose group says full Medicaid expansion is the morally and economically responsible thing to do for the state.

The governor’s options include an attempt to renegotiate the waiver or abandon the plan altogether. One move that remains unlikely, at least for now, is a sudden embrace of a full-scale expansion.

Kemp has long opposed that initiative, which would cost the state an estimated $200 million annually, according to a fiscal note prepared for the state Legislature. The federal government would pick up most of the tab, paying $9 for every $1 the state put in.

Still, federal lawmakers hope to sweeten the pot to make it harder for Georgia and other states to refuse an expansion.

A bipartisan group of U.S. senators, including newly elected Georgia Democrats Jon Ossoff and Raphael Warnock, sponsored legislation that requires the federal government to pay 100% of the costs of expansion for three years before phasing down to 90% by the sixth year. Lawmakers could also build other incentives into the $1.9 trillion economic stimulus plan now pending in Congress.

Many supporters point to a spate of public polls that show a wide majority of Georgians favor an expansion, along with examples of Republican-led states that have adopted the changes.

“I think the angst over Obamacare is fading. Of all the things we can do to help our state, this is it,” Holcomb said. “Kemp would be incredibly savvy to do this, especially if he wants to promote himself as a bipartisan governor who gets things done.”

What’s next

Gov. Brian Kemp’s office has 30 days to respond to the criticism from the Biden administration, which said it would be difficult or impossible to meet the work and community engagement requirements laid out in his proposal to provide health care coverage to some low-income and uninsured adults during a still-raging pandemic.

Kemp office’s response statement

“After only a month in office, the Biden administration has decided one of their first actions is to attempt to take away healthcare options for low-income Georgians hit hardest by the COVID-19 pandemic. Their letter ignores key details of Georgia’s innovative, unique approach in providing access to healthcare for the first time to tens of thousands of Georgians. This is typical Washington, D.C., politics, and our office will do everything we can — both legally and administratively — to not allow them to block implementation of Georgia Pathways at the eleventh hour.” — Kemp spokesman Cody Hall