Georgia Drops the Ball on Health Care, Again

Faced with an easy opportunity to dramatically improve the lives of Georgians, Georgia Governor Brian Kemp has snatched defeat from the jaws of victory. On January 21, 2022, instead of moving forward with a backup plan to help over 400,000 Georgians get health insurance, Governor Kemp decided to file a lawsuit. It’s not the first time Georgia has dropped the ball.

From 2014 to 2019, the administration of former Governor Nathan Deal failed to expand Medicaid, despite the numerous and well-documented benefits to the state, including as many as 567,000 people gaining health coverage and a stronger Georgia economy.

In 2019, when Governor Kemp took office, he had an opportunity to do the best thing for Georgia – simply take the billions of federal dollars available to fund health insurance for 567,000 Georgians. Instead of doing that, he proposed an anti-family partial expansion plan with at least two major drawbacks. First, it included requests for multiple waivers, including work requirements and premiums, that had already been struck down as unlawful when other states had tried them. Second, under his proposal, less than 1 in 11 expansion-eligible individuals actually would have gotten coverage.  As a partial expansion, only 408,000 out of the full 567,000 would have been eligible. Even worse, 358,000 of those individuals would have been blocked by barriers such as work requirements—leaving only 50,000 out of 567,000 with coverage.

As my colleagues pointed out in 2020, the Kemp proposal was severely anti-family. The proposal’s work requirements would have been expensive for the state to administer and would have created red tape for families just trying to get health insurance, at a time when the uninsurance rate for children and parents was high and jobs were scarce, due to a pandemic. In addition, unlike other work requirement proposals, Governor Kemp’s plan didn’t even include exemptions for parents providing child care. Many low-income parents would have been unable to afford child care and would be denied health care if they took care of their children. This is bad for parents, and kids too – kids are less likely to be enrolled in coverage if their parents are uninsured.

Despite all of this, the Trump administration issued an approval in 2020.

In early 2021, President Biden’s Medicaid agency gave Georgia immediate notice that the Trump approval was being reviewed, and at the end of 2021, the Biden administration rescinded two specific policies: work requirements and premiums. The state had not yet implemented the demonstration, so no transition was even needed. The Biden administration left intact the rest of the state’s demonstration approval, including a number of other waivers, enabling the state to move forward with the partial expansion demonstration.

However, instead of moving forward and increasing coverage in Georgia, Governor Kemp has sued the Biden administration. You heard right: instead of providing coverage to 408,000 Georgians, the Kemp administration has sued the Biden administration for refusing to approve policies that federal courts have repeatedly ruled unlawful in just the last few years.

The Georgia lawsuit claims that CMS should not be allowed to retract the waivers because the state is a victim of a “bait and switch” and that the state did not “voluntarily and knowingly” agree to the expansion. Never mind that the Biden administration did not approve the original demonstration—any “baiting” here was done by the Trump administration. So, it appears that Governor Kemp is arguing that Trump and Biden conspired to trick the state?

More importantly, the lawsuit misrepresents reality. Georgia is not obligated to run the demonstration. Section 1115 demonstrations require two tango partners: the state must choose to do the demonstration and CMS must choose to authorize it. Either partner can back out as long as they follow the right steps. Georgia is not required to continue with the demonstration—a fact the state itself acknowledges in the lawsuit, saying it will in fact terminate the demonstration.

Likewise, CMS is not required to authorize demonstrations. Nonetheless, Georgia makes the implausible argument that CMS lacks the authority to stop waivers. The section 1115 statute says “the Secretary [of HHS] may waive compliance with [Medicaid requirements] to the extent and for the period he finds necessary to enable” the state’s demonstration. The great irony of Georgia’s position is that the state claims that CMS has far-reaching discretion to approve waivers that contradict the statute, like work requirements and premiums, yet CMS cannot exercise authority, plainly described in the statute, to stop a waiver once approved. Of course, Governor Kemp’s interpretation of the law is disingenuous and self-serving: he claims the state is free to back out of the deal, but CMS cannot.

While Georgia clearly can drop the approved demonstration, it would be yet another mistake to do so. The state’s original plan to only cover 50,000 was never sound to begin with. For example, the state’s lawsuit notes that it will cost the state $1,309 per person to do a 50,000 person expansion in the first year, while the expansion to 408,000 people would only cost $582 per person. The small-scale demonstration would be extraordinarily inefficient compared to what CMS has approved – more than twice as expensive per capita. And if Georgia was truly worried about cost, it would propose a full expansion and capture the 90% federal matching rate and additional funding currently available to a new expansion state. Georgia’s decisions have consistently prioritized partisan politics over fiscal responsibility and the Georgia economy – not to mention the well-being of Georgians.

The Biden administration had no choice – it had to rescind two waivers that are unlawful and terrible health policy. But Georgia does have a choice. The state can implement a full expansion any time it wants. Or, it can now at least move forward with the legal partial expansion demonstration it has gotten approved. But the state appears determined to drop the ball, again.