The CMS-Georgia waiver battle

Georgia Gov. Brian Kemp has been engaged in a multi-year back-and-forth with federal officials over the state’s Medicaid and insurance market waiver programs, as reflected in the following timeline of the most notable steps taken by both sides. A final resolution of the standoff is not yet in sight, or even under development, and it is possible that the nation’s courts will be forced to step in and settle the matter.

 

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  • January 2019: Kemp, a Republican, signals his intention in his first “state of the state” address to pursue two waivers. The first would expand Medicaid but under rules that diverge from the norms established in the Affordable Care Act (ACA). The second would implement adjustments to the operation of the marketplace for private plans available to households receiving premium subsidies under the ACA.

 

  • March 2019: The Georgia legislature approves SB 106, which gave the governor the authority to develop the waiver plans’ details, and to submit them to the relevant federal agencies. The law specified that the Medicaid waiver could request expansion of eligibility to households with incomes up to 100 percent of the federal poverty line (FPL), which is below the ACA’s statutory standard of 138 percent of the FPL. In addition, the governor was authorized to develop and submit a waiver plan under section 1332 of the ACA, which gives states latitude to experiment with alternative insurance market policies (within certain “guardrails” promulgated in federal regulations).

 

  • December 2019: Gov. Kemp, submits the first iteration of the waivers to the federal government. The Medicaid waiver includes a “community engagement” requirement for participants of 80 hours per month, to encourage work or activities that could lead to employment. The Trump administration encouraged states to go down this path, and several did (including Arkansas, Michigan, and New Hampshire), although federal courts, when asked, have mostly frowned on the legality of imposing such rules. Georgia’s plan is broadly similar to the plans other states had been pursuing during the Trump era.

The Georgia Medicaid waiver also went further and sought the authority to collect premiums of $7 to $23 per month (depending on income, household size, and tobacco use) from the population that would be newly eligible for enrollment. It also called for mandatory participation in job-based insurance for applicants eligible for such coverage, with Medicaid providing a financial contribution.

For the ACA market, the state sought permission to establish a reinsurance program that would lower premiums for the affected coverage, and thus also lower federal subsidies provided to eligible households. The waiver would redirect the federal savings toward offsetting the costs of the reinsurance payments to insurers. Overall, because premiums per enrollee would fall, take-up of insurance was expected to increase. States had begun receiving approval for reinsurance waivers during the Obama administration, with both Democratic and Republican governors embracing the concept.

Beyond reinsurance, Georgia also wanted permission to use a different administrative mechanism for matching consumers with available insurance plans. Instead of the single, federally-run portal deployed in most states (healthcare.gov), or the alternative of a fully state-administered website, Georgia wanted its citizens to use commercial insurance brokers and privately-run websites to find and sign-up with available insurance plans.

 

  • October 2020: The Centers for Medicare and Medicaid Services (CMS) approves the Georgia Medicaid waiver after having received from the state certain modifications during the preceding months. The approved waiver retained the key features of the Governor’s original request, including its work requirement.

 

  • November 2020: Just two days before the presidential election, the Trump administration approves Georgia’s 1332 waiver plan.

 

  • February 2021: Three weeks after President Biden’s inauguration, the acting administrator of CMS sends Georgia a letter warning that the new administration will be pulling back its approval of the Medicaid waiver plan, then scheduled to go into effect in July 2021.

 

  • July 2021: A Georgia state government official sends CMS a letter indicating that the state planned to delay implementation of the Medicaid waiver provisions to 2022.

 

  • July 2021: HHS and the Treasury Department request updated actuarial data from Georgia related to its 1332 waiver program.

 

  • August 2021: Georgia informs the federal government that it will not be providing the request data related to the 1332 waiver and will proceed with implementing its provisions in 2023.

 

  • November 2021: CMS informs the state that it will conduct a new 60-day comment period on the 1332 waiver, to gather information about whether the waiver is in compliance with federal guardrails for such waivers, particularly in view of the changes in coverage policies enacted by Congress in its March 2021 COVID relief bill. CMS also indicates it may invoke provisions in the terms of the waiver that allow it to pull back approval in the event the state falls out of compliance with its requirements.

 

  • December 2021: CMS officially withdraws its approval of the community engagement and premium payment provisions of the Georgia Medicaid waiver.

 

  • January 2022: Georgia files a lawsuit in a U.S. district court alleging the federal government violated the law by pulling back on previously-approved provisions of the state’s Medicaid waiver program.

 

In recent years, federal oversight of state waiver plans has become a mechanism for advancing the preferred policies of the sitting president. A change of party identification in the White House can lead to an abrupt shift in which state-sponsored reforms are received well, or poorly, at CMS and Treasury. In Georgia’s battle with federal officials, neither side seems inclined to compromise, which means litigation, and many more months of uncertainty, are almost inevitable.

James C. Capretta is a columnist for State of Reform and a senior fellow at the American Enterprise Institute.