On Nov. 22 at the Kennesaw public hearing held by the Georgia Department of Community Health, GBPI Senior Health Policy Analyst Laura Harker offered public comments on the state’s 1115 waiver proposal. Below are her full comments presented at that hearing.
The Georgia Budget and Policy Institute shares the goals of increasing access to health care and increasing the number of people employed and making higher wages, but the proposed 1115 waiver, even when paired with the 1332 waiver, falls short of achieving those goals. In addition, it includes costly provisions that push people off coverage and won’t do enough to meet the needs of rural Georgians and Georgia health care providers.
One of our concerns is that a very limited number of people are expected to gain coverage under this waiver. Although state leaders say that over 400,000 Georgians could gain health coverage based on the income parameters, they project that only about 50,000 of those Georgians—just 13 percent of those with eligible incomes —are expected to get coverage in 2022 under this 1115 waiver proposal.
Full Medicaid Expansion Covers Significantly More Georgians and Is the More Cost-Effective Option
There is still another option on the table that would cover many more Georgians at a similar cost to the state as both proposed waivers. If the state fully expanded Medicaid eligibility instead of the partial Medicaid expansion this plan proposes, about 486,000 Georgians could gain coverage in 2022 on the low end of the state auditor’s estimates in a 2019 fiscal note. This would come at a net state cost (on the highest end) of $213 million in the year 2022. In comparison, both the proposed 1115 waiver and the 1332 waiver would only cover 80,000 more people in 2022 and for a similar cost as fully expanding Medicaid.
Additionally, based on 2018 uninsured population data from the Census Bureau, the proposed waivers combined would drop the state’s uninsured rate from 13.7 percent to 12.9 percent, while full Medicaid expansion would drop the state’s uninsured rate from 13.7 percent to 9 percent. Georgia has the third highest uninsured rate, and the proposed waivers would not significantly reduce the high rate of uninsured.
We can still cover hundreds of thousands more Georgians at a better price by extending Medicaid eligibility to 138 percent of the poverty line and receiving the 90 percent federal match, instead of the 67 percent match upon which this proposal’s calculations are based.
The 1115 Waiver Will Neither Increase Long-Term Employment Nor Long-Term Wages
Another goal of this waiver is to increase the number of people employed or engaged in employment-related activities and to increase wages among the employed. However, requiring enrollees to report their work or volunteer hours to get and keep their health coverage would not promote long-term growth in employment and wages. In fact, multiple studies on work reporting requirements in other public benefit programs found modest increases in employment in the first two years, but these gains faded by the fifth year.[1] Also, most people who did gain employment in those first two years did not earn enough to get out of poverty.
1115 Waiver Requirements Are Costly, Burdensome, and Will Lead to Lost Coverage
Work reporting requirements are a financial burden on the state, largely because administering work reporting requirements often necessitates additional staff and updates to information technology systems. The Government Accountability Office reported that Arkansas spent $26 million and Indiana spent $35 million to administer these work reporting requirements in their Medicaid programs.
Work reporting requirements are also a burden to people. Working people may face difficulties in reporting hours due to lack of reliable internet access or having seasonal work schedules. Furthermore, some people are not able to work because they are caregivers, students, have a chronic illness, are in a substance abuse or mental health treatment program, have a disability but do not qualify for disability benefits or other reasons. People who are unable to work or volunteer are often not able to get or maintain health coverage when there are work reporting requirements. Because of the many challenges these reporting requirements present, tens of thousands of people subjected to them in states like Arkansas lost their health coverage.[2]
Requiring premiums and co-payments under this waiver presents another burden to enrollees and could also lead to significant drops in coverage. Cost-sharing requirements can lead to fewer eligible people enrolling in coverage and fewer enrolled people keeping their coverage. In a study of public health insurance programs in multiple states, premiums as low as one percent of the enrollee’s income reduced participation by about 15 percent.[3] Even in Wisconsin, where premiums were charged for adults with incomes above the poverty line, there was a 24 percent reduction in enrollment because of nonpayment of premiums.[4]
Also, the cost-sharing requirements will be different for some enrollees in this proposed waiver. Some participants in this waiver plan would be receiving premium and cost-sharing assistance to enroll in their employer’s health coverage plan. But these participants would likely face coinsurance and deductibles that could make those plans cost-prohibitive for people making below the poverty line.
There are also likely administrative costs associated with managing the member rewards accounts that some enrollees would have under the proposed waiver. The Georgia Department of Audits and Accounts published a fiscal note in 2016 that estimated a health savings account pilot program for a partial Medicaid expansion population would cost the state $4.6 to $5.9 million in the first year and up to $7.5 to $9.8 million in the third year. The expense of this proposed waiver is likely to be higher than stated because these additional costs are not included.
The 1115 Waiver Falls Short in Helping Rural Georgians and Georgia Care Providers
We are also concerned that the proposed waiver seeks to waive some parts of the benefit package for newly eligible enrollees. The traditional Medicaid benefits are designed to improve health outcomes among vulnerable residents in low-income and rural areas. The state’s application seeks a waiver for both non-emergency medical transportation and certain vision and dental services for 19- and 20-year-old enrollees. Reducing vision and dental services would reduce access to care for transitional age youth.
Cutting out transportation is not likely to significantly reduce state costs but would deeply impact rural Georgians who may live farther away from health facilities. Non-emergency medical transportation is less than two percent of traditional Medicaid spending in Georgia according to GBPI’s budget calculations. This investment in increasing access to preventative care could help avoid emergency room visits that are much more costly than routine transportation.
Two other aspects of the 1115 waiver would reduce payments to Georgia health care providers by waiving two key policies—retroactive coverage and hospital presumptive eligibility. The three months of required retroactive coverage in Medicaid helps hospitals get paid for more of the services they already provided and gives them an opportunity to get eligible people enrolled. Presumptive eligibility gives those hospitals an expedited way of enrolling eligible patients.
The 1115 Waiver Will Not Substantially Increase Health Care Access and Is Comparatively Expensive
Overall, this waiver plan covers only a fraction of eligible Georgians and is likely to cost the state more than outlined in this application when accounting for potentially higher enrollment and administrative costs. It does not do enough to increase access to health care, increase employment and wages, help rural Georgians, or significantly increase payments to health care providers.
[1] Gayle Hamilton et al., “National Evaluation of Welfare-to-Work Strategies: How Effective Are Different Welfare-to-Work Approaches? Five-Year Adult and Child Impacts for Eleven Programs.” MDRC, December 2001.
[2] Benjamin Sommers et. al. ”Medicaid Work Requirements – Results from the First Year in Arkansas.” New England Journal of Medicine, September 2019.
[3] Machledt D. and Perkins J., “Medicaid Premiums and Cost Sharing.” National Health Law Program, March 2014.
[4] Dague L. “The effect of Medicaid premiums on enrollment: A regression discontinuity approach”. Journal of Health Economics, September 2014.
