Much of President Obama’s signature domestic legislation, the Patient Protection and Affordable Care Act (ACA), officially took into effect January 1st of this year. One of the most significant reforms of the ACA includes the expansion of Medicaid eligibility to individuals and families with incomes up to 138% of the Federal Poverty Level, a critical step to providing access to healthcare for the country’s poorest and most vulnerable populations. Yet as reported last legislative session, Georgia, along with 22 other states, has chosen to opt out of receiving the federal funds to implement the expansion and appears no closer to changing its position. For most of these states, the main concern in carrying out the Medicaid expansion provision lies in the costs incurred for individual states after the initial three years of implementation, during which the federal government will begin tapering its funding of the program from 100% to 90% after 2021. Even so, due to increased scrutiny from healthcare and consumer advocacy groups, several states are employing plans that would enable them to accept federal Medicaid funds on their own terms, including Arkansas, Michigan, Pennsylvania, Iowa and Utah.
At the heart of these individualized state plans is the push for a premium assistance model, in which states could utilize federal Medicaid funds to pay premiums for qualifying individuals to purchase private, “cost effective” coverage plans. Through these “cost effective” plans, individuals would have additional options to seek private Marketplace Qualified Health Plans (QHPs) provided that the costs of Medicaid premiums paid to private insurers and any supplemental services and cost-sharing assistance is comparable to existing Medicaid payments for similar services. Moreover, while the model gives individuals access to participate in the private Marketplace, states must ensure that such plans have a “wrap-around” benefits apparatus in the case that certain private options’ benefits are lower and cost-sharing requirements are greater than those provisioned in Medicaid. For many states that are wary of fully signing on to the ACA’s Medicaid expansion reform, the premium assistance model affords states’ the opportunity to not lose out on billions of federal dollars (Georgia is set to forgo $2.9 billion alone) while implementing an initiative that incorporates millions of uninsured Americans in the private Marketplace. Meanwhile, during the initial three-year period of Medicaid expansion, in which the program remains fully federally funded, states have the time to genuinely evaluate the social and economic impacts of the expansion and whether its continuation merits the additional contributions states would need to guarantee beginning in 2017.
A Closer Look into the Premium Assistance Model: The Iowa Plan
One state that has reversed its previous stance on Medicaid expansion is Iowa, which passed legislation approving the expansion under a premium assistance coverage plan in 2013. The pronouncement came less than a year after Governor Terry Branstad had vehemently opposed Medicaid expansion when the Supreme Court made extending coverage a state option. In an interview days after the Supreme Court decision, Branstad stated, “We’re opposed to it and we’re not going to have any part of it…We want to put our own effort together to be the healthiest state, and we’re willing to help people who are willing to help themselves. But we’re certainly not going to buy into this federal effort. We’re going to fight it in every way we can.”
Nevertheless, by the end of the 2013 Iowa state legislative session, Branstad had seemingly changed his mind on the issue, working with a politically divided state legislature to create a Medicaid expansion plan that would have required individuals who failed to participate in healthful activities to pay small monthly premiums (a stipulation that has since been revised by the federal government to include only those beneficiaries above the federal poverty line). Furthermore, the monthly premiums would be limited to 2% of income or approximately $19 per month for an individual at the Federal Poverty Line. Along with instilling behavior-based premiums, the Iowa Plan also requires beneficiaries to choose between at least two Silver QHP level plans and any available Silver plans in the region or be subject to automatic coverage assignment. The plan represents the combined values of expanding access to healthcare under the Affordable Care Act and Iowan concerns for personal accountability and fiscal pragmatism. For the Obama bshinholseristration and Iowa state government, the Iowa Plan ultimately serves as a positive example of the flexibility of the ACA’s Medicaid component and the role of state-federal compromise in ensuring vulnerable individuals see the benefits of the Affordable Care Act’s implementation.
A Premium Assistance Plan for Georgia?
The success of the Iowa plan suggests the feasibility of enacting an adapted Medicaid expansion program in a majority conservative state, a promising option for Georgians who would benefit from increased access to affordable healthcare. According to the group Cover Georgia, 650,000 Georgians could qualify for Medicaid under a state expansion, most of which are low-income childless adults who do not receive health insurance through an employer. In addition, according to the Commonwealth Fund, Georgia is set to experience the third highest financial net loss amongst states not expanding Medicaid, behind Texas and Florida, respectively. This finding, along with the fact that federally funded Medicaid programs receive support from revenue raised from all states regardless of expansion status illustrates the substantial fiscal burden Georgians will have to undergo without any demonstrated benefits to claim. Such troubling predictions beg, at the very least, attention to the issue and consideration of a Medicaid expansion plan that would truly work for Georgia.