Online shopping cart Georgiaofficials say the initiative would help drive down insurance costsby providing more choices, permitting cheaper plans to be offeredand capping financial assistance to consumers. (Photo:Shutterstock)

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The Trump administration announced Thursday it was putting onhold Georgia's proposal to significantly alter how that state'sAffordable Care Act insurance marketplace operates but suggested itis eager to help the state get it done.

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"CMS is committed to working with states to provide theflexibility they need to increase choices for their citizens,promote market stability, and more affordable coverage," aspokesperson for the Centers for Medicare & Medicaid Services,who declined to be identified, wrote in an email to KHN. "We arepleased to see states like Georgia take the lead in health carereform by creating innovative state based solutions."

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Related: Idaho's bid to skirt Obamacare rejected by Trumpadministration

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Federal officials in recent weeks had requested additionalinformation from Georgia, and Republican Gov. Brian Kemp onWednesday asked for a delay in the evaluation of a large portion ofthe proposal.

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The state's plan, which has drawn opposition from ACAsupporters, proposes to jettison consumer access to the federalinsurance enrollment website — healthcare.gov — and instead sendpeople buying individual policies to private companies to choosecoverage.

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It would also cap how much is spent on premium subsidies, whichcould mean some consumers would be put on a wait list if theyneeded financial help to buy a plan. ACA subsidies are not cappedin any state now.

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The state's proposal is the boldest yet under new guidelines theTrump administration issued in 2018 and 2019. Those guidelineswiden the opportunity for states to try different approaches toexpanding coverage and lowering costs for consumers who buyinsurance themselves because they don't get it through their job ora government program.

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Georgia officials say the initiative would help drive downinsurance costs — for the state and consumers — by providing morechoices, permitting cheaper plans to be offered and cappingfinancial assistance to consumers.

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Last year, 450,000 Georgians enrolled in a health plan throughthe ACA, 88 percent of whom received a federal subsidy tohelp pay their premium.

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Nationwide, 11 million people got health insurance through themarketplaces in 2019.

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Ryan Loke, who handles special projects for Gov. Kemp, saidstate officials expected that the federal government would needmore details as it reviewed the proposal. Georgia's request "is afirst in the nation approach to reforming the individualmarketplace, and given the novelty to the approach — we expectedthat supplemental information would be required, and have workedwith our federal partners to begin putting together the necessaryinformation for their review."

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But critics in Georgia and two detailed analyses released inlate January have slammed the proposal, initially submitted forfederal review Dec. 23.

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"If CMS were to approve this waiver in its current form, I wouldexpect lawsuits on behalf of Georgia consumers and families," saidLaura Colbert, executivedirector at Georgians for a Healthy Future, a consumer groupbased in Atlanta that has called the proposal "terriblefor Georgians." "The proposal would encourage enrollment insubstandard plans and likely cause many Georgians to lose coverage.People with preexisting health conditions would be put atrisk."

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Such a lawsuit would add to the mountain of litigationsurrounding the ACA, including two cases before the Supreme Court and an appeals courtdecision in December that threatens the entire law.

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A decision favoring Georgia's proposal would also add to thecontinuing high-profile political debate over the fate of theACA.

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"This is the first time a state has tried to take advantage ofthe Trump administration's new approach to waivers, to implementsome of the ideas the administration's been pushing," said JustinGiovannelli, a health policy expert at Georgetown University inWashington, D.C. "Other states and a lot of lawyers are watchingclosely."

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Georgia is making the request for new marketplace rules under aprocedure known as a 1332 waiver. Under the law, states using sucha waiver must still hew to strict rules set by the ACA.

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For example, a state experiment can't cost the federalgovernment more money (for premium subsidies), raise costs forconsumers on average, or result in fewer people gaining coveragethan would be the case without the experiment.

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Georgia's proposal is in two parts. The first part seeks toestablish a reinsurance program that picks up the tab for the careof high-cost patients using both state and federal funds. Thatallows insurers to keep costs down so they can offer lower premiumsto consumers. The program, if approved, would go into effect inJanuary 2021.

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CMS says it will evaluate that part separately, with an eyetoward swift evaluation and approval after a 30-day comment period.Final approval would make Georgia the 13th state to gain permission to use a reinsurance program.

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Kemp has dubbed Georgia's proposal for more far-reachingchanges, starting in January 2022, the "Georgia Access Model."

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Instead of using the federal marketplace, Georgia would requireconsumers to enroll in coverage directly through insurancecompanies, brokers or private-sector websites.

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At the same time, Georgia proposes to take over theadministration of subsidies and cap the amount each year.

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Insurers would also be allowed to sell plans that don't complywith ACA requirements, under Georgia's request. For example, oneproposed type of plan could cover just half of a consumer's costsfor care, as opposed to the 80 percent to90 percent levels of ACA's silver and gold plans. Such aplan would have lower premiums but sharply higher out-of-pocketcosts (such as deductibles and copays) if extensive care wasneeded.

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Insurers and brokers would also be allowed to promote cheaperplans that don't cover all the benefits required of current ACAplans.

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Two studies released late last month concluded that Georgia'sproposal does not meet the guidelines for marketplace experimentsset out in the ACA.

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"There are very clear errors in Georgia's proposal," saidChristen Linke Young, co-author of one of the reports and a fellow at the Brookings Institution inWashington, D.C. "The numbers don't add up, and the proposaldoesn't meet the standards the ACA established. The plan would harmconsumers if approved, and we don't believe it can or should beapproved."

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The second study, by the left-leaning Center for Budget and PolicyPriorities (CBPP), also in Washington, concluded that Georgia'sproposal would "cause thousands of Georgians to lose coverage and …likely also leave many with less affordable or less comprehensivecoverage than they would otherwise have."

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If premiums or enrollment rose by 10 percent, forexample, CBPP calculates that Georgia would have to deny subsidiesto between 15,000 and 34,000 people under the proposed cap.

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Kaiser HealthNews (KHN) is a national health policy news service. It is aneditorially independent program of the Henry J. Kaiser Family Foundation whichis not affiliated with Kaiser Permanente.

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