Skip Navigation

Georgia Will Decide ‘Private Option’ Medicaid Expansion in 2017 Session

August 2, 2016

The chair of the Georgia Senate Health and Human Services Committee indicates she will reconsider Medicaid expansion and meets resistance from free-market health care reformers.

Georgia lawmakers are considering a form of Medicaid expansion similar to a so-called hybrid “private option” Arkansas adopted in September 2013. 

State Sen. Renee Unterman (R-Buford), who chairs the Senate Health and Human Services Committee, has suggested petitioning the Centers for Medicare and Medicaid Services (CMS) for a waiver to develop Georgia’s own version of the program, reported WABE, an Atlanta-based National Public Radio affiliate, on June 7.

“We have to open that box and look just a little bit and see what’s available,” Unterman told WABE.

Unterman “appears [to be] forming alliances with the Georgia Chamber of Commerce to push for a Medicaid expansion model similar to that which was implemented in the state of Arkansas called the ‘Private Option,’” state Rep. Jason Spencer (R-Woodbine) wrote in an op-ed for Georgia Health News on June 28.

Instead of adding newly eligible enrollees to the traditional Medicaid program, a private option would combine state funds with federal funds distributed under the Affordable Care Act (ACA) to help recipients purchase private insurance plans on the state health insurance exchange.

Arkansas’ Medicaid expansion program limits enrollees’ cost-sharing to 5 percent of a family’s income, with the state typically paying the relevant deductible as wraparound coverage.

Unterman and several Republican lawmakers have previously criticized Medicaid expansion, which would require the General Assembly’s approval. Unlike governors in Louisiana and Ohio, Georgia Gov. Nathan Deal (R) signed a law in 2014 prohibiting the executive branch from unilaterally expanding Medicaid.

‘Do No Harm’

Georgia is one of 19 states to reject Medicaid expansion under ACA.

Kelly McCutchen, president and CEO of the Georgia Public Policy Foundation, says Medicaid expansion would enroll more people in a system already failing to provide Georgians with access to primary care.

I don’t think you can expand [Medicaid] to able-bodied citizens without unintended consequences,” McCutchen said. “We already have a hard time with our Medicaid population finding primary care physicians, so they go to the emergency room, winding up sicker. I think the first rule is do no harm to the existing population.”

Emulating Arkansas’ Medicaid expansion would do little to increase patient access or solve hospitals’ financial problems, McCutchen says.

“Two of the key issues that we have with this population are getting them access to primary care and addressing the plight of some of our mostly rural hospitals here in Georgia,” McCutchen said. “Our Medicaid expansion program [would] not do either one.”

Four rural hospitals have closed in Georgia since 2013.

More Patients Per Doctor

McCutchen says Medicaid expansion would increase demand for health care without increasing the supply of providers who accept Medicaid’s partial reimbursements.

“We’re not adding any new doctors, but we [would be] adding 565,000 new people to the system,” McCutchen said. “The providers are still not going to get fully reimbursed.”

Medicaid expansion in Georgia would cost $7,000 per newly eligible recipient, compared to $3,022 per recipient currently enrolled, McCutchen says. The total would far exceed the cost of reimbursing hospitals for uncompensated care, he says.

“We’re talking about spending $3 billion to $4 billion in Georgia, when our uncompensated care costs are $1.5 billion, if you believe the hospitals,” McCutchen said. “We need a patient-centered plan, not a hospital-centered plan.”

Far Costlier Than Promised

Spencer says Arkansas’ experience with Medicaid expansion is a cautionary tale of cost overruns and expanding government.

“As a result of lax accountability and transparency, the Arkansas private option expansion waiver was approved in direct violation of the [Health and Human Services] Department’s requirement that Medicaid expansion under the waiver process be budget-neutral,” Spencer said. “It has certainly not been budget-neutral.”

One year after Arkansas’ expansion, the U.S. Government Accountability Office found expanding Medicaid using the traditional method could have cost the state $778 million less than the private option.

“The [private option’s] proponents really try to tout the ‘skin-in-the-game’ argument, but 77 percent of the enrollees in the Arkansas model would not have to pay any cost-sharing requirement, according to the Urban Institute,” Spencer said.

Calls for Transparency, Deregulation

Replacing restrictive regulations and government dependence with free-market reforms would better serve the state’s poorest, Spencer said.

“We need to address health care price inflation by making health care prices transparent in Georgia,” Spencer said. “I do not know of any other business that does not let their consumers know how much their services are worth. Price obscurity and price inflation are the main problem with health care, which Obamacare does not even address.”

Easing restrictions on nurse practitioners, eliminating certificate of need laws, and incentivizing medical students to gravitate toward opening direct primary care practices would “address the health care provider scarcity problem,” Spencer said.

McCutchen said transitioning Medicaid recipients to direct primary care, a membership model in which patients directly pay doctors monthly fees in exchange for preventive care services, tests, and check-ups, would eliminate physicians’ compliance costs and “almost pay for itself.”

In 2015, 1.8 million Georgians were enrolled in state Medicaid programs, at a cost of $8.9 billion, according to the Georgia Department of Community Health’s annual report.

Georgia’s General Assembly reconvenes on January 9, 2017.

Ben Johnson (therightswriter@gmail.com) writes from Stockport, Ohio.

Internet Info:

Matthew Glans, “Georgia Should Continue to Oppose Medicaid Expansion,” Research & Commentary, The Heartland Institute, June 29, 2016.

Michael Hamilton, “Post-Op Policy Debrief: ‘Nontraditional’ Medicaid Expansion,” Health Care News, The Heartland Institute, April 2016.

Jonathan Ingram and Nicholas Horton, “Arkansas’ Failed Medicaid Experiment: Not a Model for Nebraska,” Platte Institute for Economic Research, January 2016.

Jenni White, “Georgia Lawmakers Cross Out CON Repeal on ‘Crossover Day,’” Health Care News, The Heartland Institute, May 2016.

This article has been updated.

Author
Ben Johnson (therightswriter@gmail.com) writes from Stockport, Ohio.

Related Podcast