Comment letter on the Georgia 1332 Waiver

The Centers for Medicare and Medicaid Services (CMS) recently asked the public for further comments on the Georgia 1332 waiver application for the Georgia Access Model (GAM) portion of the waiver. Georgia wants to shut down Healthcare.gov in the state and not replace it with a state based marketplace. Instead, private entities will be responsible for outreach, assistance and advertising while the state handles income verification and subsidy determination. The state believes that this will increase enrollment. The GAM waiver was approved in November 2020 but CMS is concerned that the underlying realities of the without waiver baseline have significantly changed so that the with waiver application will not meet the relevant guardrails.

Commenting is an act of active citizenship. Federal agencies seek public input all the time. Most of the time it is to fulfil the notice and comment requirements of the Administrative Procedures Act where the agency needs to build a paper trail that the decisions that they are making are neither arbitrary nor capricious. Other times, it is to gain insight on pressing matters of import. Regulations.gov is usually the central repository of ongoing federal requests and responses to comments during the rule-making process. Most comments that are vaguely responsive come from small groups of very interested in the outcome stakeholders who are willing to argue vehemently over punctuation as a comma instead of a semi-colon might be worth tens of millions of dollars. Public comments from the public that is well informed, specific and relevant adds different views into the rule-making process.

I, along with Drs. Rebecca Myerson of the University of Wisconsin and Dr. Coleman Drake of the University of Pittsburgh, writing in our personal capacities submitted the comment below regarding the Georgia 1332 Waiver last night. We outlined some of our current research and other relevant and reasonably recent research that may shed some insight on the questions that HHS and CMS are asking about.

January 6, 2022

The Honorable Xavier Becerra
Secretary of Health and Human Services
200 Independence Ave, SW Washington, DC 20201

Re: Georgia Access Model Request for Comment

Dear Secretary Becerra,

We are health policy scholars writing in response to the November 9, 2021 Request for Comment on the Georgia Access Model Section 1332 waiver proposal to share timely research that is relevant to your decision-making regarding this waiver proposal. Our statements here do not speak for our employers, funders, or any other entity, organization or individual. We address the current literature on the following subjects:

• The impact of changes in federal law and policy on the Georgia Access Model’s compliance with Section 1332’s statutory coverage guardrail given the impact of inertia, zero-premium plan availability, and extended open enrollment periods for plan effectuation.
• The impact of changes in federal funding for the navigators in the federally facilitated exchanges; specifically, new data indicate cuts to the navigator program affect reductions in coverage.
• The lack of substitutability between public vs. private sector forms of outreach. Several studies suggest that private entities such as insurers do not fill gaps in key means of outreach and assistance, such as television ads, when there is reduced public sector activity.

Inertia, Zero-premium Plan Availability and Extended Open Enrollment Periods

We believe that baseline without waiver enrollment levels from Georgia’s waiver application are materially different for Plan Year 2022 (PY2022), the last pre-waiver year, than the application assumed. While Georgia’s waiver would not go into effect until Plan Year 2023, this difference will significantly alter the calculations needed to satisfy the federal deficit neutrality and coverage guardrails. Many 2022 enrollees will re-enroll in 2023, even as subsidies decrease with the sunsetting of American Rescue Plan Marketplace subsidies.

Georgia, in its October 9, 2020 waiver application (Table 4.1), estimated that PY2022 would have a total enrollment of 386,792 in all QHP market segments. For PY2020, the Summary Report on Permanent Risk Adjustment Summary Report – HHS Risk Adjustment Program-State Specific Data, Appendix A, indicates that there were 437,475 member years between the individual and catastrophic market. For PY2021, CMS reports, via the OEP State Level Public Use File, that 517,113 individuals effectuated coverage during the 2021 Open Enrollment Period, including 379,105 returning subscribers on the Marketplace. More individuals enrolled off-exchange.

The 2022 Open Enrollment Period is ongoing. The presence of enhanced premium subsidies provided through the passage of the American Rescue Plan (ARP), increased navigator funding and increased federal advertising support, and the COVID pandemic likely will lead to enrollment levels that are greater than 2021 Open Enrollment Period enrollment in Georgia. Premiums net of subsidies (i.e., net premiums) are highly important to households deciding whether to enroll for the first time. Since 2018, net premiums for the least expensive plans have dramatically declined due to states’ decisions, including Georgia’s, to “silver load” the value of Cost-Sharing Reduction benefits into silver plans’ premiums (1).The net premium for the least expensive plan available to subsidized buyers significantly decreased, especially in low competition and rural markets, even as the net premium for the least expensive plan available to non-subsidized buyers increased (2).

At this time, Georgia’s enrollment for the 2022 OEP is 653,590, 69% higher than the waiver projected (3).These data suggest Marketplace enrollment is growing rapidly in Georgia under the new policy regime affected by the Biden Administration and Congress (4). Higher levels of without-waiver enrollment are thus likely to alter calculations regarding the impact of Georgia’s proposed waiver on budget neutrality and coverage, calling Georgia’s original assumptions and analysis into question.

The ARP has increased both the scale and scope of premium tax credits. The applicable percentage that households must pay each month for the benchmark plan has temporarily decreased such that: (1) households earning under 150% Federal Poverty Level (FPL) have a choice between two zero-premium silver plans with CSR benefits; and (2) households earning over 400% FPL only need to pay 8.5% of their Modified Adjusted Gross Income (MAGI) for a benchmark plan.

Georgia, in their August 26, 2021 response letter states that these “provisions of the ARP cited by the Departments are also irrelevant to the Georgia Access Model’s compliance with statutory guardrails and STCS because the cited ARP provisions expire before the Georgia Access Model even goes into operation in 2023.”

This statement assumes that individuals and households actively choose to purchase or not purchase health insurance each and every year. This is incorrect.

The current, without-waiver enrollment environment is highly supportive. Researchers have also found that the presence of zero-premium plans substantially increases re-enrollment(5). Furthermore, the recent Executive Order issued on December 13, 2021 directing agencies to further reduce administrative burden—the costs, barriers, and frictions required of individuals to enroll and maintain eligibility for benefits—will, once implemented, likely sustain and increase enrollment as administrative frictions have been shown reduce enrollment and decrease health plan choice quality(6). Finally, the extended open enrollment period through January 15, 2022 will likely lead to many individuals who had wanted to enroll in insurance with a January 1, 2022 start date but had not been able to do so having a second opportunity to enroll with a February 1, 2022 start date. Research using the Colorado state based marketplace has found that this population is notable in its size and comparatively lower income(7).

The individual’s decision to enroll in a Qualified Health Plan is complex. Political identification, elite messaging, advertising, administrative burdens including time and hassle costs to enroll, affordability and quality of benefits all contribute to whether a household enrolls in a Qualified Health Plan(8–10). Changing the structure of health insurance enrollment as specified in the with-waiver modeling, for Georgia Marketplace enrollees may thereby decrease overall enrollment by creating a new system for enrollees to learn and navigate. This decrease will likely be magnified unless it is accompanied by robust advertising and outreach to assist returning enrollees. Prior evidence discussed below suggest that private insurers will not step in to fill gaps in public outreach that will likely be necessary to accommodate the transition away from the Marketplace (see below).

These behavioral frictions in the context of high enrollment are likely to lead to high, persistent enrollment in a without-waiver universe under current law.

Navigators
Federal funding for the public sector navigator program in Georgia increased from $700,000 in 2020 to more than $2.5 million in 2021. The 2021 funding constituted the first 12 months of a 36-month period of performance, so that level of funding for the current navigator grantees is expected to continue through August 26, 2024. Access to these funds for the navigator program would be lost under the Georgia Access Model.

Navigator programs were designed to facilitate enrollment in qualified health plans by providing consumers with fair, accurate, and impartial information about health insurance, the health insurance marketplaces, and insurance affordability programs such as subsidies in the marketplaces (11). Many navigator grantees proposed to target their services to specific underserved populations in their statements to CMS. In 2017, for example, the Georgia Association for Primary Health Care targeted rural consumers, veterans, Latino consumers and other minoritized racial or ethnic groups, the self-employed, and women with children, and the Georgia Refugee Health and Mental Health targeted refugee and international/limited English speaking populations (12).

Matching these stated goals, the navigator program has been linked with improvements in the coverage rate for underserved populations. A recent study examined changes in coverage before vs. after the 80% cut in funding for the navigator program under the Trump administration, comparing across counties in federally facilitated marketplace states that had more vs. fewer navigator programs prior to the cuts. Cuts to the navigator program were associated with drops in the coverage rate among lower-income adults, adults under age 45, Hispanic adults, and adults who speak a language other than English at home (13).

There is also the possibility that cuts to the navigator program could affect affordability of coverage, although data on this question are sparser. Data from California also suggested that consumers assisted by private sector insurance agents or insurer-employed enrollers overpaid for their coverage – e.g., enrolled in a marketplace plan that provided less coverage at a similar or higher price than another available plan – at slightly higher rates than consumers assisted by public sector assisters, although it is not clear whether this difference is statistically significant (14).

Television Advertising and Navigators
Individuals and households need information to make significant financial choices. Many individuals have low health insurance literacy and are unable to identify and differentiate key insurance concepts like “premium” and “deductible” (15–17). Information can be provided to consumers through a variety of channels including broadcast advertising through federal, state, and private channels and navigators.

Government sponsored television advertising has been positively associated with increases in the proportion of people who report looking into purchasing marketplace coverage or ultimately enrolling in marketplace coverage (18). Consumer engagement with the marketplace (e.g., views of the marketplace website and calls to the call center) significantly declined in Kentucky when government sponsored advertising was abruptly decreased after the governorship of the Commonwealth changed parties (19). The association between advertisements and marketplace enrollment outcomes can vary based on the advertisement sponsor (20). Aizawa and Kim found that private sponsored marketplace advertisements differed from government advertisements in the content included and geographic areas targeted, consistent with the possibility that privately sponsored advertisements were designed to achieve a different objective from publicly sponsored advertisements (21). Private insurers profit when they are able to insure individuals whose net of risk adjustment costs are lower than their net of risk adjustment premiums (22); profit maximization informs advertising strategy, e.g., targeting of individuals with low disease severity relative to their risk adjustment score (23).

Privately sponsored television advertising is not a substitute for the absence of navigator funding that is proposed by the Georgia waiver application. A current working paper has found no relationship between changes in navigator funding and privately sponsored advertising volume for private insurance (24). This null finding was robust to multiple specifications and placebo tests.

Overall, private insurers and related entities with financial incentives—such as web-brokers, agents, and brokers—have a fundamentally different set of goals than federal and state governments. In the context of the Georgia Access Model, the assumption that private outreach will either replace or substitute for publicly funded outreach to marginalized populations is unlikely to be accurate. We are especially concerned that, based on the evidence noted above, reliance on solely private outreach could result in less outreach and marketing to people with chronic conditions, people who are low-income, and other marginalized populations.

Sincerely,

David Anderson MSPPM
Department of Population Health Sciences
Duke University

Dr. Rebecca Myerson PhD
Assistant Professor
Department of Population Health Sciences
University of Wisconsin-Madison

Dr. Coleman Drake PhD
Assistant Professor
Department of Health Policy and Management
University of Pittsburgh

References
1. Anderson D, Abraham JM, Drake C. Rural-Urban Differences In Individual-Market Health Plan Affordability After Subsidy Payment Cuts. Health Aff (Millwood). 2019 Dec 1;38(12):2032–40.
2. Drake C, Abraham JM. Individual market health plan affordability after cost-sharing reduction subsidy cuts. Health Serv Res. 2019;54(4):730–8.
3. Marketplace Weekly Enrollment Snapshot: Week 6 | CMS [Internet]. 2021 [cited 2022 Jan 6]. Available from: https://www.cms.gov/newsroom/fact-sheets/marketplace-weekly-enrollment-snapshot-week-6
4. Anderson DM, Griffith KN. Increasing Insurance Choices In The Affordable Care Act Marketplaces, 2018–21. Health Aff (Millwood) [Internet]. 2021 Nov 1 [cited 2021 Nov 21];40(11):1706–12. Available from: https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2020.02058
5. McIntyre AL, Shepard M, Wagner M. Can Automatic Retention Improve Health Insurance Market Outcomes? [Internet]. National Bureau of Economic Research; 2021 Apr [cited 2021 Jun 21]. Report No.: w28630. Available from: https://www.nber.org/papers/w28630
6. Ericson K, Layton T, McIntyre A, Sacarny A. Frictions vs. Premiums Impeding Take-up of Subsidized Health Insurance Coverage: Evidence from a Field Experiment. In Preparation;
7. Drake C, Cai S-T, Anderson D, Sacks DW. Financial Transaction Costs Reduce Benefit Take-Up: Evidence from Zero-Premium Health Plans in Colorado [Internet]. Rochester, NY: Social Science Research Network; 2021 Mar [cited 2021 Apr 7]. Report No.: ID 3743009. Available from: https://papers.ssrn.com/abstract=3743009
8. Anderson D, Shafer P. The Trump Effect: Postinauguration Changes in Marketplace Enrollment. J Health Polit Policy Law [Internet]. 2019 [cited 2019 Jul 9]; Available from: https://read.dukeupress.edu/jhppl/article/doi/10.1215/03616878-7611623/139047/The-Trump-Effect-Postinauguration-Changes-in
9. Trachtman S. Polarization, Participation, and Premiums: How Political Behavior Helps Explain Where the ACA Works, and Where It Doesn’t. J Health Polit Policy Law [Internet]. 2019 Dec 1 [cited 2019 Dec 11];44(6):855–84. Available from: https://read.dukeupress.edu/jhppl/article/44/6/855/139739/Polarization-Participation-and-Premiums-How
10. Herd P, Moynihan DP. Administrative Burden: Policymaking by Other Means. New York: Russell Sage Foundation; 2018. 360 p.
11. Department of Health and Human Services. Patient Protection and Affordable Care Act; Exchange Functions: Standards for Navigators and Non-Navigator Assistance Personnel [Internet]. 45 CFR Part 155 2013. Available from: https://www.govinfo.gov/content/pkg/FR-2013-04-05/pdf/2013-07951.pdf
12. Centers for Medicare and Medicaid Services. In-Person Assistance in the Health Insurance Marketplaces: Navigator Grant Recipients [Internet]. 2019 [cited 2021 Apr 30]. Available from: https://www.cms.gov/CCIIO/Programs-and-Initiatives/Health-Insurance-Marketplaces/assistance
13. Myerson R, Li H. Information Gaps and Health Insurance Enrollment: Evidence from the Affordable Care Act Navigator Programs [Internet]. Social Sciences Research Network; 2021 Nov. Available from: http://dx.doi.org/10.2139/ssrn.3966511
14. Rasmussen P, Anderson D. When All That Glitters Is Gold: Dominated Plan Choice on Covered California for the 2018 Plan Year. Milbank Q [Internet]. 2021 Jul; Available from: https://onlinelibrary.wiley.com/doi/abs/10.1111/1468-0009.12518
15. Kim J, Braun B, Williams AD. Understanding Health Insurance Literacy: A Literature Review. Fam Consum Sci Res J [Internet]. 2013 [cited 2019 Jul 24];42(1):3–13. Available from: https://onlinelibrary.wiley.com/doi/abs/10.1111/fcsr.12034
16. Tipirneni R, Politi MC, Kullgren JT, Kieffer EC, Goold SD, Scherer AM. Association Between Health Insurance Literacy and Avoidance of Health Care Services Owing to Cost. JAMA Netw Open [Internet]. 2018 Nov 16 [cited 2021 Apr 6];1(7):e184796–e184796. Available from: https://doi.org/10.1001/jamanetworkopen.2018.4796
17. Yagi BF, Luster JE, Scherer AM, Farron MR, Smith JE, Tipirneni R. Association of Health Insurance Literacy with Health Care Utilization: a Systematic Review. J Gen Intern Med [Internet]. 2021 May 23 [cited 2021 May 25]; Available from: https://doi.org/10.1007/s11606-021-06819-0
18. Gollust SE, Wilcock A, Fowler EF, Barry CL, Niederdeppe J, Baum L, et al. TV Advertising Volumes Were Associated With Insurance Marketplace Shopping And Enrollment In 2014. Health Aff (Millwood) [Internet]. 2018 Jun 1 [cited 2021 Oct 11];37(6):956–63. Available from: https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2017.1507
19. Shafer P, Franklin Fowler E, Baum L, Gollust S. Television Advertising and Health Insurance Marketplace Consumer Engagement in Kentucky: A Natural Experiment. J Med Internet Res. 2018 Oct 25;
20. Shafer PR, Anderson DM, Aquino SM, Baum LM, Fowler EF, Gollust SE. Competing Public and Private Television Advertising Campaigns and Marketplace Enrollment for 2015 to 2018. RSF Russell Sage Found J Soc Sci [Internet]. 2020 Jul 1 [cited 2020 Dec 28];6(2):85–112. Available from: https://www.rsfjournal.org/content/6/2/85
21. Aizawa N, Kim YS. Public and Private Provision of Information in Market-Based Public Programs: Evidence from Advertising in Health Insurance Marketplaces [Internet]. Rochester, NY: Social Science Research Network; 2020 Aug [cited 2021 Oct 11]. Report No.: ID 3675247. Available from: https://papers.ssrn.com/abstract=3675247
22. Geruso M, Layton T, Prinz D. Screening in Contract Design: Evidence from the ACA Health Insurance Exchanges. Am Econ J Econ Policy. 2019 May;11(2):64–107.
23. Aizawa N, Kim YS. Advertising and Risk Selection in Health Insurance Markets. Am Econ Rev [Internet]. 2018 Mar 1 [cited 2021 Oct 22];108(3):828–67. Available from: https://pubs.aeaweb.org/doi/10.1257/aer.20151485
24. Myerson R, Anderson D, Baum L, Franklin Fowler E, Gollust S, Shafer P. Cuts to navigator funding were not associated with changes to private sector advertising in the ACA marketplaces [Internet]. University of Wisconsin-Madison working paper; 2021 Dec. Available from: https://drive.google.com/file/d/1uoQt0PeplBjNrxrtBS2OFGoGHpzYhajs/view