Cruzing out of Georgia

Last November, Georgia submitted a complex, multi-part Section 1332 waiver to reshape their individual health insurance market to the Center for Medicare and Medicaid Services (CMS). Georgia’s waiver proposal had two elements. The first element is a complex geographically varied reinsurance waiver that takes several already approved waivers to 11. The second part is an attempt to figure out how to implement the Cruz Amendment where anything could go and be subsidized as long as insurers offered at least one guaranteed issued, community rated product.

CMS is cool with the reinsurance portion of the waiver request. Georgia is asking for review of the second phase to be paused:

GA 1332 news: Yesterday the state asked the federal gov't to "pause" review. Today CMS declared the problematic parts of the waiver incomplete. Good to see state and feds recognize this waiver is unapprovable. They must reach the same conclusion if it reaches their desk again.

— Christen Linke Young (@clinkeyoung) February 6, 2020

I’ve changed my mind on that part of the waiver. If it was adequately funded, I think it is intriguing, but the level of funding that Georgia proposes for the entire waiver is grossly insufficient.

So Georgia now will have a reinsurance waiver that will give insurers very strong incentives to move people across county lines to get $50,000 or $100,000 swings in reimbursement from the reinsurance pool depending on the address of the beneficiary. That will give the health economists a cool set of regression discontinuity studies as well as crushing any on-exchange subsidized premium spreads.