By Matthew B. Lawrence and Haley Gintis
Georgia has applied to the U.S. Department of Health and Human Services (HHS) for a waiver under the Affordable Care Act that would allow it to reshape its private health insurance marketplace.
HHS is accepting comments on the application through September 23, 2020. Commenters so far have raised various issues, including concerns about how the waiver would, if granted, impact access to treatment for mental illness and behavioral health conditions such as substance use disorder.
This blog post summarizes the revised waiver in Part I, changes from the original in Part II, and recent comments about its desirability in Part III.
I. Georgia’s Revised 1332 Waiver Application
In November 2019, Governor Brian Kemp announced the 1332 Reinsurance Program and Georgia Access Waiver (“Waiver”), which was authorized with the passage of the Patients First Act in March 2019. The current, revised Georgia 1332 Waiver consists of two phases.
In Phase I (Reinsurance), Georgia seeks federal pass-through dollars for a reinsurance program similar to such programs setup in several other states. Georgia’s Reinsurance Program is a claim-based, attachment-point model with a three-tiered coinsurance rate based on the overall health care costs of the region. For lower-cost regions, the program will reimburse claims of $20,000 through $500,000 at a 15% rate; for middle-cost regions the program will reimburse these claims at a 45% rate; and for high-cost regions the program will reimburse these claims at an 80% rate. The goal of the program is to make premiums more affordable by off-setting high-cost individual health insurance claims and incentivizing carriers to offer plans in more regions across the state.
In Phase II (Georgia Access Model), Georgia requests waiver of multiple provisions that relate to the ACA’s Exchanges. If approved, the Georgia Access Model would make three significant changes to the status quo.
First, it would eliminate the use of HealthCare.gov and replace it with the new Georgia Access Model, allowing private insurers to provide the front-end consumer shopping experience.
Second, Georgia Access would allow private insurers to sell Qualified Health Plans (QHP) alongside non-QHPs. QHPs must provide essential health benefits, such as mental health and substance use disorder services. QHPs also must comply with the Mental Health Parity and Addiction Equity Act (MHPAEA) passed in 2008, which requires plans to cover mental health and substance abuse treatment at the same level as physical health treatment. Georgia thus requests waiver of Section 1311 of the ACA (requiring each state to have a marketplace to facilitate enrollment into QHPs) to permit it to privatize enrollment so that individuals can shop for both QHPs and non-QHPs in the same way.
Third, Georgia Access would make the determination of whether an individual qualifies for state-based subsidies or Medicaid primarily the state’s responsibility (the federal government currently does this through HealthCare.gov).
While 13 states have implemented programs similar to the Reinsurance Program in Phase I, no state has implemented a program like Phase II’s Georgia Access Model that decentralizes enrollment and permits plans that do not comply with ACA requirements to be sold alongside QHPs.
II. Concerns Regarding Mental Health and Substance Use Disorder Treatment in Prior Versions and Georgia’s Response
Governor Kemp released an official notice of the 1332 Reinsurance Program and Georgia Access Waiver application on Nov. 4, 2019. The notice was followed by a 30-day state public comment period, ending on Dec. 3, 2019. The state received a total of 611 comments during the public comment period. Comments can be found on Georgia’s Patients First Act website.
Comments regarding the Reinsurance Program expressed support for the tiered coinsurance rate system to bring down premiums in high-cost regions of the state; concern that the program would benefit insurance carriers rather than consumers; and suggestions that the state should use funding to expand Medicaid to 138% of the federal poverty line instead of to establish this program. Georgia responded to the comments but did not propose any changes to the Reinsurance Program.
Comments regarding the Georgia Access Model expressed concerns that it would be more difficult for consumers to navigate than the current HealthCare.gov system, particularly putting a burden on individuals whose first language is not English; concerns that health insurance carriers would put biased information on their sites, which could lead to individuals choosing plans that are not best for them; and concerns that ACA-compliant QHPs will no longer be available. Additionally, many in the mental and behavioral health field expressed concerns that the program would place a substantial burden on individuals seeking access to mental health and substance use disorder treatment.
Mental Health America of Georgia (MHA of GA) commented that the original 1332 Waiver would allow tax credits to be used to purchase substandard health plans that exclude coverage for essential health benefits, such as prescription drugs, maternity care, or mental health and substance use care. MHA of GA concluded that the proposal failed to meet Section 1332(b)(1) of the ACA, which requires that ACA waivers cover as many people with affordable and comprehensive coverage as without the waiver. MHA of GA further noted that health plans’ inequitable coverage of mental health and addiction has profound economic costs that are eventually paid by taxpayers, as mental health conditions are the leading cause of disability in the United States. Georgia has since modified the Georgia Access Model to not allow state subsidies for non-QHPs. However, the program still allows these health plans on the market and to be sold alongside QHPs.
The American College of Physicians (ACP) expressed concern with the plan rolling back previously covered essential benefits and that allowing such “bare bones” coverage exempts plans from meeting federal mental health parity requirements. ACP further commented that incentivizing more non-QHPs may appear to be more cost effective early on, but that such gains will be eliminated as diminished access and reduced medical efficacy set in. The American Academy of Pediatrics and Georgia Legal Services expressed a similar concern that individuals may mistakenly enroll in non-QHPs, only to discover that mental health services are completely omitted from coverage when such services are critically needed.
Georgia responded to the comments and made changes to Georgia Access including: adding state-imposed requirements for the non-QHPs and not allowing state subsidies for such programs; adding requirements for individualized insurers marketing their plans, such as requiring clear language on whether their plans are ACA-compliant or subsidy-eligible; and clarifying that the state will run a website to provide consumers with information on health care coverage options and how to enroll.
Following the State’s comment period, in December 2019, Governor Kemp submitted the 1332 Waiver to HHS. Centers for Medicare & Medicaid Services (CMS) deemed Phase I complete in February, but Georgia modified its Waiver application for Phase II in July, partly to account for the COVID-19 landscape. In August, CMS notified Georgia that its entire application was complete.
III. Concerns Regarding Revised Application
On Aug. 17, CMS started their comment period on Georgia’s revised Waiver. (The statute requires both a state comment period and a federal comment period.) CMS has posted all Georgia 1332 Waiver comments received through Friday, Sept. 11, and will continue accepting comments through September 23. The comments overwhelmingly show support for the Phase I Reinsurance Program based on evidence that the program will lower premiums.
While some comments support Phase II, more comments raise doubts about Georgia Access. Experts have surveyed various concerns with the revised version of Georgia Access, and many of the comments repeat these concerns.
Specifically: Christen Linke Young and Jason Levitis at the Brookings Institution explain their view that the program would likely cause tens of thousands of Georgia residents to lose their health insurance coverage and therefore is not compliant with the requirement that the waiver not decrease the number of people with health insurance coverage, among other problems.
The Center on Budget and Policy Priorities explains its own view that Georgia’s proposal would leave many Georgians with less-comprehensive coverage and depress Medicaid enrollment, again among other problems.
Community Catalyst, a non-profit organization specializing in health care, has explained its view that Georgia’s proposal violates the statutory guardrails due to the opaqueness of the health selection process with which enrollees would be left without HealthCare.gov.
And on Sept. 16, the bicameral Democratic Health committee leaders submitted a letter to HHS urging the rejection of Georgia’s 1332 Waiver on the grounds that it is unlawful because it will “significantly reduce access and enrollment in comprehensive health insurance and will expose consumers to greater financial risk by encouraging enrollment in junk plans.”
That said, some coverage has articulated support for the Georgia Access Waiver. Specifically, writing on this blog, Abe Sutton suggests that Georgia Access “should be given a chance” both because of doubts he expressed about criticisms and because of inherent benefits of state experimentation.
One additional theme of the comments submitted to date has been the implications of the revised Georgia Access for mental and behavioral health treatment, including treatment for substance use disorder. A concern repeated in numerous comments is that Georgia Access would put access to mental health treatment at risk by replacing HealthCare.gov with a variety of private brokers as the means through which potential enrollees discover their eligibility and enroll in plans.
These comments articulate three distinct concerns. First, they worry that private entities working under a profit motive will not advance the interests of enrollees with mental illness as well as the government-run site, and the privately-designed plans into which Georgia Access could steer enrollees would not address the needs of those with mental illness as well as plans subject to ACA requirements. Second, they worry that the loss of a one-stop shopping place for ACA-compliant plans will be particularly burdensome for those suffering chronic disease such as mental illness, who would have to devote time and energy they do not have to comparison shopping through different brokers. Third, they express the concern that the State of Georgia will not further the interests of enrollees as well as the Federally-operated HealthCare.gov does, either for lack of experience or for lack of interest in advancing the goals of the ACA.
After the comment period is concluded, the next step in the administrative process will be for HHS to consider the Waiver and relevant comments submitted on it, such as those surveyed above. The agency must ultimately determine whether the Waiver satisfies statutory guardrails that changes not reduce affordability, comprehensiveness, or enrollment, and explain its decision.
We cannot help but notice the similarity between the discussion of the desirability of Georgia Access and the debate surrounding “short-term, limited duration plans,” another means of diverting consumers from ACA-compliant plans that has been endorsed by HHS in recent years. In light of that similarity, it may be reasonable to predict that HHS will approve the Georgia Access Waiver, although the statutory guardrails on approval of an ACA waiver application, and the distinctive issues raised by the Georgia Access application make any prediction necessarily uncertain.
Additional comments can be submitted through September 23 to stateinnovationwaivers@cms.hhs.gov with “Georgia Section 1332 Waiver Comments” in the subject heading.