From its first days to its last, the Trump administration sought to undermine the Affordable Care Act (ACA) and promote insurance arrangements that discriminate against people with preexisting conditions. To these ends, in 2018, the administration issued guidance rolling back consumer safeguards governing the ACA’s “state innovation” waiver program and encouraging states to seek waivers that flout federal law. Though for a time, this legally dubious guidance served only to deter states from using waivers to support progressive reforms, the administration eventually found, in Georgia, state officials willing to pursue an ACA end-run.
While more than a dozen states have used ACA waivers to improve the affordability of comprehensive individual market health insurance, Georgia took a different approach. Relying on the administration’s guidance, Georgia’s leaders decided to eliminate the state’s health insurance marketplace. Their plan, developed prior to COVID-19 and doggedly pursued as the pandemic raged, will fragment Georgia’s individual market and almost certainly make it harder for residents to find and enroll in affordable, comprehensive coverage.
If it takes effect. Days before the inauguration, two Georgia health centers sued the federal government, seeking to block the waiver’s implementation. Meanwhile, the Biden administration — which inherits the defense of the new lawsuit — may begin the time-consuming process of suspending or terminating the state’s legally deficient plan.
What Are Section 1332 Waivers?
- Section 1332 of the ACA allows states to apply to waive certain provisions of the health law to implement their own programs to improve health insurance coverage.
- States can waive rules governing the ACA’s marketplaces, premium and cost sharing subsidies, and essential health benefits, among others.
- States may not waive ACA protections for people with preexisting conditions, prohibitions on health status and gender rating, and nondiscrimination rules.
- States can access federal funding under the program. If a state’s waiver plan is forecast to reduce federal spending on coverage subsidies, the federal government will pass through those savings to the state for the purpose of implementing its waiver.
- The program does not give states carte blanche to waive federal law. A waiver cannot be approved unless it complies with statutory “guardrails” that disallow any proposal likely to undermine comprehensive, affordable coverage, cover fewer people, or impose additional costs on the federal government.
- States must have statutory authority to submit the waiver application to the federal government and implement the waiver program.
Georgia’s Innovation Waiver
The core of the state’s waiver, designed to take effect in 2023, is called “Georgia Access.”[1] Its name notwithstanding, the waiver will prohibit Georgians from accessing the federal marketplace, HealthCare.gov. The waiver will not replace HealthCare.gov with a state-run marketplace. Instead, Georgians who need individual market coverage must consult a broker or an insurance company representative (or the company’s website).
Where’s the Innovation?
Georgia’s waiver doesn’t offer anything new to the roughly 450,000 residents with marketplace coverage, and it doesn’t broaden options for uninsured people. Brokers and insurers already sell health coverage in Georgia — at least 16 web brokers were operating in the state in 2020. About 20 percent of current marketplace enrollments occur via private entities. The state does not need a waiver to promote these services, and Georgians do not need a waiver to access them.
Walling Off HealthCare.gov
What the waiver does do is enable the state to take enrollment options away. While Georgians are now free to use private enrollment entities, starting in 2023, they won’t have any other choice. The waiver’s sole “innovation” is to forbid residents from using the most-popular platform for obtaining comprehensive individual market coverage, one on which hundreds of thousands of Georgians now rely.
In so doing, it jeopardizes continuity of coverage and care. Shuttering HealthCare.gov requires moving hundreds of thousands of residents into the state’s decentralized system. A new version of the waiver plan — not seen by the public prior to its approval nor subject to public comment — asserts the state will try to auto-reenroll current HealthCare.gov enrollees during the transition period. However, the experiences of other states suggest many Georgians are likely to fall through the cracks.
Less Competition, More Confusion
If implemented, Georgia’s waiver is also likely to undermine market competition and consumer decision-making. By eliminating the only neutral public resource that displays the same information for all comprehensive plans, Georgia will make it harder for residents to compare coverage based on cost, provider networks, and quality. This, in turn, will reduce the incentive for insurers to compete. As the state makes it more difficult to distinguish among insurance options, consumer confusion is likely to increase, as will the danger that Georgians will be steered to products that don’t fit their needs or expectations.
Indeed, an explicit objective of the waiver is to increase residents’ exposure to short-term and other limited-benefit insurance products. The state concedes that brokers are paid more to sell short-term products than comprehensive coverage. But the waiver dismisses the risk that these financial incentives could harm consumers and promises that private “direct-enrollment” entities will have to meet minimum standards akin to what the Trump administration has required. That’s not saying much. Federal direct enrollment standards have suffered from spotty compliance and haven’t mitigated financial conflicts of interest or prevented private entities from providing misinformation or steering consumers to substandard plans.
Looking Forward
Approved in haste — in time to hold a celebratory signing ceremony with federal officials at the height of the presidential and senate campaigns but not in time for the public to see the plan — Georgia’s waiver still has hurdles to overcome. For one, the waiver is contingent on state compliance with numerous terms and conditions, including adherence to federal consumer protections and requirements governing the transition from HealthCare.gov. For another, it must now survive a lawsuit challenging the Trump administration’s approval. In addition, it may be subject to revocation via the Congressional Review Act.
In recent days, the outgoing administration scrambled to embed the waiver guidance in regulation to make it more time-consuming to undo. These dilatory efforts add to the heavy workload facing the Biden administration. But they likely only delay the reversal of policies at odds with federal law and squarely in conflict with the new president’s pledge to build on the Affordable Care Act.
[1] Georgia also received approval to establish a waiver-funded reinsurance program, akin to those now operating in other states.
