The various ills of 2020 have dominated our attention, but one of the bigger — and better — stories from last year might soon make a comeback.
In 2019, Gov. Brian Kemp spent much of his first year in office seeking a way for Georgia to escape some of the more onerous strictures of the Affordable Care Act (ACA). His administration filed a “waiver” proposal with the federal government in December, then submitted an amended version at the end of July that is nearing the end of its review. (A separate, complementary waiver proposal for Medicaid is also progressing.)
With approval appearing more likely, now is a good time to review how much could change for the better.
The ACA waiver has two parts. The first is a “reinsurance” program to help subsidize care for Georgians with the largest medical expenses. Several other states have similar programs. Georgia’s would devote more money to the regions with the highest health care costs, leading the average premium on the individual insurance market to fall by an estimated 10%. The state would cover most of the cost by redirecting existing federal funding.
The second element is more innovative. Georgians would no longer visit the federal marketplace at HealthCare.gov to purchase insurance plans with ACA subsidies. Instead, they would be able to use the subsidies on an array of approved, private websites run by brokers and insurance carriers.
This is the more controversial change, even though the original proposal to let people use the subsidies on non-ACA-compliant plans has been discarded. But opponents don’t like to talk about how badly HealthCare.gov has performed.
Since peaking in 2016 with almost 588,000 Georgia enrollees, HealthCare.gov has seen a steady decline. In 2019, the last full year for which we have data, enrollment from Georgia fell below 459,000. That’s a drop of about 129,000 people, or 22%.
The actions of those eligible for financial assistance are even more telling, considering HealthCare.gov is the only place people can use ACA subsidies. Last year, just under 338,000 Georgians used subsidies to enroll in plans via HealthCare.gov. Yet, the Kaiser Family Foundation estimates some 922,000 Georgians were eligible for financial assistance.
That means about 584,000 Georgians could have bought subsidized plans on HealthCare.gov but, for whatever reason, did not. State officials believe that number is closer to 715,000. Either way, less than 40% of those eligible for subsidies bought plans on HealthCare.gov.
And we’re supposed to believe not using that website is the problem?
On the contrary, private operators will solve a key problem of HealthCare.gov.
Because only plans meeting all of the ACA’s benefit requirements are listed on HealthCare.gov, shoppers see a limited slice of what’s available. They might not know a different plan without coverages they don’t need — think of the 50-year-old, single man forced to buy maternity coverage — might be cheaper than the subsidized plans on the federal marketplace. They don’t know, because HealthCare.gov won’t show them that plan.
In fact, the subsidies are the only reason HealthCare.gov plans seem cheaper for some people. The unsubsidized premiums have been rising; state officials say the average premium for a “bronze” plan rose 27% between 2017 and 2019. And that’s before accounting for out-of-pocket costs such as coinsurance and deductibles. If you don’t qualify for large subsidies, this “affordable” care isn’t so affordable.
What’s more, the cost of marketing plans and online marketplaces will no longer fall to the taxpayer. Private brokers and exchange operators will have an incentive to attract shoppers. Those who claim enrollment declines owe to poor promotion by the Trump administration will have to find a new excuse.
The real shame is that Georgia still has 1.4 million uninsured people, 10 years after the passage of the ACA. Lowering prices and increasing choices are the best ways for Georgia to lower the uninsured rate.
It might be different if the ACA were working. It’s not. Georgians need a better way.