Georgia’s Medicaid Waiver is Fiscally Foolish and Anti-Family

On October 15th, the Centers for Medicare and Medicaid Services Administrator Seema Verma traveled to Atlanta to announce the approval of Georgia’s “Pathways to Coverage” Section 1115 Medicaid demonstration. The approval is the latest in CMS Administrator Verma’s ideological crusade to “reframe” Medicaid and promote her signature initiative — work requirements. The creation of a maze of complex rules to ensure that people don’t get health care when they need it will drive up administrative costs and discriminate against parents with young children who will find it nearly impossible to pass the many tests presented in the state’s demonstration.

Interestingly, the state’s companion and dangerous Section 1332 proposal, which was expected to be approved at the same time, has still not been approved. CMS has said it is working with the state to “finalize the terms and conditions for approval.”

The state’s Medicaid approach is the kitchen sink of bad ideas that have been bumping around for years and found a home together in Georgia’s misguided approach. Administrator Verma and Governor Kemp’s mutual antipathy toward the Affordable Care Act has led to this misguided approach under the facade of “expanding” coverage. The state’s proposal will not qualify for the ACA’s enhanced 90% match, so,  as a consequence, the state will receive its regular match rate of 67% (currently enhanced by 6.2% during the public health emergency) for those individuals who do get coverage after navigating an extremely difficult set of barriers including work reporting requirements.

Currently, Georgia is one of 12 states that has not expanded Medicaid and has some of the highest uninsured rates in the nation for both children and adults. The state also has significant health disparities, yet only provides Medicaid coverage to adults who are parents and deep in poverty — below 35 percent of the federal poverty level ($634 per month for a family of three).

Georgia’s approach severely limits access to health insurance during a pandemic, conditions it on having work hours during a recession with high unemployment (especially in certain industries), and asks state taxpayers to pick up more of the tab at a time when state budgets are under considerable strain.

Let’s look at more of the specifics of what got approved.

Under the approved demonstration, adults between ages 19 and 64 with incomes under 100 percent of the federal poverty level (FPL) must meet a requirement of 80 hours of work or “qualifying activities” (i.e. work hours or “community engagement”) per month  to be eligible for Medicaid coverage. Once enrolled, these individuals must complete and report 80 hours of work or qualifying activities every month to maintain their health coverage. People with incomes between 50 percent ($905 per month for a family of three) and 100 percent FPL ($1,810 per month) are also required to pay a monthly premium to maintain coverage. It will not only be very difficult for individuals to break through these enrollment barriers, but it will also be arduous for them to maintain coverage.  Individuals will have their benefits suspended, and will eventually be disenrolled from Medicaid, if they fail to meet the work requirements or pay their monthly premiums

If that wasn’t enough, CMS also approved the elimination of 3-month retroactive coverage, non-emergency medical transportation (NEMT) services, and hospital presumptive eligibility (the first state to receive approval to do so). Other approved elements include cost-sharing and copayments for non-emergency use of the emergency department.

The entire demonstration was approved under (a)(2) expenditure authority, which our colleague Andy Schneider has written about as part of Administrator Verma’s new litigation strategy to impose work requirements and other restrictions without being stopped by the courts. For a demonstration that claims to expand coverage, almost all of the provisions actually limit benefits and put low-income beneficiaries’ health coverage at risk.

The per person cost of the demonstration is high and few would get coverage — especially when compared to the number of people who would be covered under a standard Medicaid expansion. Over the five-year demonstration period, the state estimates approximately 64,300 individuals will be covered (pg. 17 of cover letter). There are no meaningful budget neutrality estimates provided to show the estimated number of beneficiaries enrolled by year, or the total cost of the demonstration, nor does the state provide any hard estimates of the administrative costs that would result from such a complex system of rules.[1] Because of the kitchen sink of approved policies with proven disenrollment effects, the state likely won’t come close to its predicted enrollment.

The state previously estimated that if Georgia fully expanded Medicaid without the work requirements and other barriers to coverage, between 486,500 and 598,300 adults would be covered once the program reached full enrollment. This means at full enrollment, which is unlikely given all of the red tape, Georgia’s waiver will only cover 11% to-13 % of the potential expansion population with the state paying a greater share of the per-person cost, bringing far fewer federal dollars into the state, and incurring much higher administrative costs.

Further underscoring the absurdity of the demonstration, this approval comes at the height of a pandemic, when unemployment is the highest it has been in years. Though the state’s proposed implementation date is July 2021, the Congressional Budget Office has projected the public health emergency will remain in place through early 2022. Georgia’s unemployment is twice as high as this time last year (3.2 in September 2019 and 6.4 in September 2020[2]). Yet, Georgia conditions Medicaid eligibility for the demonstration population on meeting a work requirement at the time of application. This was already a troubling provision, but at a time when finding work is much harder and health coverage is needed more than ever, this is unconscionable.

Of the 12 work requirement approvals, Georgia’s is one of the harshest we have seen for parents. Because meeting the work requirement is a condition of eligibility, the demonstration provides no exemptions for individuals who may not be able to meet the work requirement because they are taking care of children. Every other state work requirement includes an exemption for parents or caregivers with dependent children, at least until age 6.

As a result of these restrictions, parents will be the least likely to gain coverage. There are no accommodations made for parents who may need child care – child care is not a qualifying activity for meeting the requirement nor are there any flexibilities for parents of children with disabilities. Child care is unaffordable for many low-income families, creating a barrier for parents to be able to meet the work requirement.

Parent’s inability to gain or maintain coverage is especially concerning since ample research has shown that when parents are insured, children are more likely to be insured. Our recent report on the state of children’s coverage found that Georgia had one of the highest numbers (197,000) and rates (7.4%) of uninsured children in the nation. This proposal will do nothing to ameliorate that and could very likely exacerbate it.

The state’s restrictive and harsh proposal only covers individuals that the state deems “hard-working” and leaves hundreds of thousands without health in coverage in the middle of a pandemic. And state taxpayers will be funding a plan that provides far less coverage than Medicaid expansion and results in far fewer federal dollars flowing into the state – which is of particular importance during an economic downtown when the state needs all the revenues it can get. Georgians would be better served by fully expanding Medicaid.

[1] The state does estimate a per member per month cost of $608 the first demonstration year which is predicted to increase to $684 by demonstration year 5 (pg. 33)

[2] September 2020 data is preliminary and therefore subject to change