Georgia wanted to shut down Healthcare.gov. It did not want to replace Healthcare.gov with a State Based Marketplace like how California or Idaho, for example, implement their ACA individual market. Instead, Georgia had a waiver, called the Georgia Access Model, approved during the end of the Trump Administration that would place all of the outreach, assistance, plan display and enrollment activity in the hands of profit seeking entities including insurance agents and insurance companies. Georgia contended that the profit motive would be sufficient to drive enrollment up in plans that are at least as good in terms of benefits and premiums at no greater cost to the federal government. The Trump Administration bought this argument. The Biden Administration thought it was suspect, so after the passage of the American Rescue Plan, the Center for Medicare and Medicaid Services (CMS) asked for more information and had an extended public comment period. I wrote and submitted a very long comment. I also referenced a working paper that my colleagues and I had written that was relevant to the request for comments.
CMS sent a notice to Georgia suspending the waiver while requesting more data in April 2022. Georgia responded at the end of July without any new analysis. Last week, CMS suspended the implementation of the Georgia Access Model for 2023.
the Departments are upholding their determinations that: (1) the State materially failed to comply with the STCs by repeatedly refusing to provide the Departments with the information requested as part of the Departments’ monitoring and oversight authority;8 and (2) the State has not demonstrated that the Georgia waiver, with the Georgia Access Model in place and absent corrective action, meets the statutory coverage guardrail in light of changes in federal law, policy, and other circumstances that materially affect the without-waiver baseline scenario. In addition to these findings, the Departments have also determined, based on readiness reviews conducted to date, that Georgia has not satisfied certain operational readiness requirements for a novel state program such as the Georgia Access Model. Nor has the State provided an adequate outreach and communications plan. These operational and planning deficiencies are an additional basis for suspending implementation of the Georgia Access Model under the applicable STCs. For all of these reasons, suspension of the implementation of the Georgia Access Model will go into effect August 9, 2022.
Now, I get to read some interesting, to me and a few co-authors, analysis by CMS on Georgia’s argument about advertising starting on Page 8:
The State also claims that Acumen’s analysis makes erroneous assumptions about advertising. First, the State disagrees with the assumption that private entities will not change their marketing and outreach in response to the Georgia Access Model. The State asserts that the Acumen analysis ignores the Departments’ previous conclusion that private brokers will have a “greater incentive to invest in marketing and outreach in order to retain existing enrollees and attract new consumers to the individual market….”
Further, the advertising assumptions in the Acumen analysis are reasonable and supportable based on consideration of available literature on how public- vs. private-sponsored advertising levels change in response to market share. Recent research that has been published since initial approval of the waiver highlights that reductions in federal spending on advertising and outreach are not necessarily offset by increases in private spending on advertising.31,32
And now let’s look at the footnotes here:
31 Myerson et al. (2022) find that funding cuts to the Navigator program between 2017 and 2019 were not associated with changes in the number of private sector TV advertisements aired targeting marketplace health insurance. The authors conclude that private sector entities did not increase their advertising to compensate for reductions in federal spending on Navigator activity. See Myerson R, Anderson D, Baum L, et al. Association of funding cuts to the Patient Protection and Affordable Care Act Navigator Program with Privately Sponsored Television Advertising. JAMA Network Open. 2022;5(8):e2224651. https://jamanetwork.com/journals/jamanetworkopen/fullarticle/2794812. For the pre-publication version see: https://drive.google.com/file/d/1uoQt0PeplBjNrxrtBS2OFGoGHpzYhajs/view. 32 Shafer et al. (2021) find that Marketplace insurers generally do not replace 1-for-1 the decline in federalsponsored advertising. The authors concluded that insurers instead behave in ways that benefit themselves strategically, advertising more when becoming a monopolist but not filling the gap left by former competitors. See Shafer P, Anderson D, Baum L, et al. Changes in Marketplace Competition and Television Advertising by Insurers. American Journal of Managed Care. 2021;27(8):323-328. https://www.ajmc.com/view/changes-in-marketplacecompetition-and-television-advertising-by-insurers. 33 See Aizawa N and Kim YS. Public and Private Provision of Information in Market-Based Public Programs: Evidence from Advertising in Health Insurance Marketplaces. Cambridge: National Bureau of Economic Research (NBER). Revised April 2021. https://www.nber.org/papers/w27695. 34 See Shafer P, Anderson D, Aquino S, et al. Competing public and private television advertising campaigns and Marketplace enrollment for 2015 to 2018. RSF. 2020;6(2):85-112. https://www.rsfjournal.org/content/6/2/85.
Three papers that I’ve co-authored with a great set of colleagues are being used here. The oldest paper, published in the Russell Sage Foundation Journal of the Social Sciences attempts to estimate the enrollment effect of various forms of advertising. We found slight increases in enrollment with state funded advertising but nothing regarding federal or privately funded advertising. This paper has significant endogeneity concerns.
The next paper came out in the American Journal of Managed Care as we asked the question of how do insurers change advertising when insurers face different competitive environments? We used the same data set as the Russell Sage paper. We thought that insurers in counties that became less competitive could plausibly increase advertising to grow enrollment or decrease advertising to contain costs while insurers in regions that had an introduction of more competition could plausibly advertise more to defend market share. We found that a sole surviving insurer from a previously competitive region increased advertising while all other transitions saw a drop in advertising.
Finally, our most recent work led by Dr. Rebecca Myerson and published by JAMA Network Open asked if insurers substituted more advertising for less federally funded navigator support. We found robust null results in all primary and alternative specifications. Insurers had no advertising reaction to a loss of navigator funding.
This line of research has shown that insurers are not particularly policy sensitive in their advertising decisions and that privately sponsored advertising is more likely focused on market share rather than market size. The first two papers were conceived well before Georgia filed its first waiver. The most recent paper had a slow origin. In Fall 2020, I sat in on a presentation at a virtual conference (APPAM) by Dr. Myerson on some of her other ongoing work on ACA navigators. Her team found that counties with a lot of navigators were able to enroll more marginalized populations than counties with few navigators. I was fascinated by how they did their identification and causal inference strategy and filed the nugget in my head for the next six months when I next chatted with Dr. Shafer. We routinely work and write together and one project was coming to an end. We were brainstorming for new ideas and something about advertising and enrollment and navigators kept on coming up, so I suggested that we take Myerson’s right hand side and replace her left hand side with advertising. And this paper emerged from that round of beers. And now these papers are having national policy impact.
That counts as a WOW!