Biden suspends Georgia ACA waiver, putting the future of waivers at risk

Today, the Biden administration suspended Georgia’s State Innovation Waiver, less than three months before it was set to go live. This action invites a legal fight and could potentially change the character of federal and state health care program partnerships permanently.

The Affordable Care Act (ACA) allows states to waive certain requirements of the health law to innovate new state health care programs. This is similar to how Medicaid allows states to waive various requirements. In fact, the text of the ACA includes provisions on coordinating these two types of waivers.

Once a Medicaid waiver is approved, the federal government has traditionally followed through with partnering with the state to ensure its success. Unfortunately, the Biden administration took immediate action to rescind several Medicaid waivers approved under the Trump administration.

In a commentary late last year, former Vice President Mike Pence and Centers for Medicare & Medicaid Services (CMS) Administrator Seema Verma explained how “These strong-arm tactics represent an unprecedented move in the 40 years in which Medicaid waivers have been widely used. No other administration has canceled a standing waiver.”

“In the case of Texas,” they noted, “the move jeopardizes millions of dollars that hospitals were counting on to care for their patients, even as the COVID-19 pandemic continues.” 

Texas sued and earlier this year the Biden administration agreed to drop out of the litigation and continue cooperating with Texas. As Politico reports, the administration made this decision, “saying the yearlong court fight has overtaxed the federal government’s resources.”

While Texas may have prevailed, most of the other state Medicaid waivers remain rescinded.

Beyond these assaults on Medicaid waivers, the Biden administration has now moved to undermine Georgia’s State Innovation Waiver. This waiver allows Georgia to move from the enrollment platform to an innovative new health insurance delivery mechanism called the Georgia Access Model. This approach takes advantage of private market resources to expand consumer access and enrollment by delivering a better consumer experience.

The Trump administration approved this waiver in the fall of 2020 after the state successfully navigated a rigorous approval process. This process included regular meetings with CMS, the submission of an actuarial analysis, a lengthy application, and several public comment periods.

Upon approval, the federal government and the state agreed to a set of Specific Terms and Conditions (STCs), which establishes a contract governing the waiver.

Last year the Biden administration demanded that the state provide additional actuarial and economic analyses in light of changes to federal law and policy. However, as an American Experiment report established, the administration had no legal authority under the STCs or federal regulation to make this request. In effect, the administration was trying to use these federal changes as a pretext to reopen the waiver application.

The state of Georgia also concluded the Biden administration lacked authority to make the request and never provided any updated analyses. Since then, CMS and Georgia exchanged several letters, CMS held an impermissible public comment period, CMS published their own flawed economic analysis, and used the report as the basis to suspend the waiver unless Georgia delivered a corrective action plan or a challenge.

Less than two weeks ago, Georgia sent CMS a very strong challenge letter. On the same day, American Experiment also published a report outlining several flaws with the economic analysis CMS used to threaten the suspension.   

With the suspension letter the Biden administration sent today, litigation appears to be the only alternative if Georgia wants to save their waiver for 2023.

The Biden administration has persisted in making impermissible demands on Georgia for over a year and, as a result, given the state no choice but to sue. This sets yet another terrible precedent for waivers.

Ultimately, if they hadn’t already, the Biden administration has now made waivers entirely partisan and, unless something changes, this will put any approved waiver at risk any time a new administration takes over.