Georgia has prepared a complex 1332 waiver for their individual market. It has two parts.
The first part is a reinsurance waiver that varies the pay-out by county and degree of rurality. The objective is to bring down premiums for unsubsidized buyers. This part of the waiver would go into effect for January 1, 2021.
The other part of the waiver is an attempt to operationalize Ted Cruz’s amendment during Repeal and Replace.
Here is how Vox described the Cruz Amendment:
If an insurance company offers at least one plan in the state that is compliant with the (Obamacare) mandates, that company can also sell any additional plan that consumers desire.
What that does is it maintains the existing protections, but it gives consumers additional new options above and beyond of what they can purchase today….
That is true. But outside experts argued that the costs to the federal government could be unsustainable. As the Obamacare markets turned into high-risk pools, premiums would increase, driving the cost of the tax subsidies higher and higher.
“Keeping the ACA tax credits would, in theory, protect subsidized consumers,” Larry Levitt, senior vice president at the Kaiser Family Foundation, told me. “But the cost of those tax credits would quickly skyrocket, because healthy people would flock to non-complaint plans, which could cherry pick them with inexpensive premiums.”
Cruz acknowledged that his plan would depend on taxpayer subsidization of people with high medical costs. But, he argued, it was better for the federal government to pick up the tab than requiring health plans to charge sick people and healthy people the same premiums, increasing costs for the latter.
The second stage of the Georgia 1332 proposal would do a few things.
- Redirect all federal subsidy money to a Georgia state government account
- Maintain full Essential Health Benefit plans that set subsidies levels
- Allow insurers to offer subsidy eligible plans that don’t offer all 10 Essential Health Benefits
- Inject state funding to pay for extra subsidies for the new enrollees
The critical thing from a legal standpoint is the last point: the state is bringing in a lot of new money so that the seriously ill won’t be worse off if they purchase the benchmark silver plan which will be more than sufficient to meet guardrails.
The concept of operations is that insurers will offer a limited portfolio of full benefit plans and a bunch of much cheaper limited benefit plans.
Georgia is trying to operationalize Cruz AmendmentPost + Comments (11)