Report exposes Biden admin’s bad faith effort to undermine health reform in Georgia

American Experiment released a report today that exposes the flawed legal and economic analyses that the Biden administration is using to justify their efforts to stop the state of Georgia from implementing innovative health reforms.

For over a year, the Biden administration has engaged in a series of delay tactics to stall and hamstring the state of Georgia’s efforts to launch the Georgia Access Model. This health reform would transition Georgia from relying on to an innovative new health insurance delivery mechanism that takes advantage of private market resources to expand consumer access and enrollment by delivering a better consumer experience.

The Georgia Access Model uses a federal waiver from Affordable Care Act (ACA) requirements referred to as a section 1332 State Innovation Waiver. This allows the Georgia to waive the ACA’s requirement that states implement a health insurance exchange. The law allows these waivers so long as the waiver meets specific criteria, often called “guardrails,” to help ensure a comparable number of people retain access to coverage that is as comprehensive and affordable as would have occurred without the waiver.

As the state’s waiver application explained, Georgia is pursuing this reform to address serious challenges the state’s individual market is facing, including “drastic premium increases, low carrier participation in several counties across the state, and declining enrollment.”

The Trump administration approved Georgia’s waiver in the Fall of 2020 and the state then moved forward in good faith with the Centers for Medicare & Medicaid Services (CMS) to implement the waiver.

As expected, the transition from the Trump administration to the Biden administration brought a substantial shift in policies and priorities. Under President Biden’s Executive Order 14009, CMS began reviewing all agency actions, including Georgia’s section 1332 waiver.

Citing this order, CMS sent a letter to Georgia Governor Brian Kemp on June 3, 2021 requesting updated actuarial and economic analyses of the waiver by July 3, 2021—just 30 days from the date of the letter. This letter set off a series of letters and actions by CMS that, taken together, expose a pattern of bad faith engagement on the part of the Biden administration.

In the latest letter from CMS, dated April 29, 2022, the agency demanded that Georgia provide a “corrective action plan.” This demand is based on the Biden administration’s determination that the state’s waiver no longer complies with the statutory “guardrails” governing section 1332 waivers. Specifically, the CMS letter alleges the waiver will not meet the statutory requirement for a waiver to provide coverage to at least a “comparable” number of residents as would be provided such coverage without the waiver. The state may file a written challenge to this CMS action. If the state fails to respond before July 28, the Biden administration says it will suspend implementation of the waiver.

The American Experiment report explains why there is no legal basis for the Biden administration to demand a corrective action plan for a waiver that has not yet been implemented. This legal analysis draws from a report American Experiment published last year  that explained why CMS lacked the legal authority to make the initial demand for updated actuarial and economic analyses from Georgia.

This new American Experiment report adds a critical analysis of the economic report CMS commissioned from a vendor and relied on to demand a corrective action plan. This analysis shows the agency failed to offer any substantive evidence showing the state’s waiver would no longer comply with the guardrails. More specifically, it shows how the CMS vendor’s report cherry picked its assumptions and relied on a single, potentially flawed study as the basis for its results.

It is critically important to ensure the federal government honors this approved section 1332 waiver. These types of waivers are one of the few tools available to states to develop innovative solutions to fix ongoing problems with state health care programs and insurance markets. If approved waivers are subject to the whims of shifting presidential administrations, states will be far less likely to invest in future waivers.

The Biden administration has not yet made any final decision to suspend or revoke the Georgia Access Model. So, there remains hope that the Biden administration will allow the waiver to go forward in good faith and work with the state to ensure the successful implementation of the Georgia Access Model. But that will depend on how the state and CMS work through the agency’s latest demand letter.