CMS tells Georgia to stop getting out over its skis; partially approves SBM but state will remain on this fall after all

Back in February, I wrote about how the state of Georgia, in an eyebrow-raising move, announced that they were moving from the federal ACA exchange (HealthCare.Gov) onto their own state-based ACA exchange.

While numerous other states have already done the same thing (and several more are in the process of doing so as well), Georgia's move to their own enrollment platform was especially noteworthy for two reasons:

First, because it represents as complete 180-degree policy turn from their prior attempts (over the course of several years) to eliminate any formal ACA exchange (federal or state-based) in favor of outsourcing it to private insurance carriers & 3rd-party web brokers.

Secondly, because of the timeframe involved:

The State conducted an analysis to determine the gaps between the Georgia Access Model as originally designed under the 1332 Waiver and the federal regulatory requirements for SBEs. The analysis concluded that the original Georgia Access Model under the 1332 Waiver met nearly all federal regulations for SBEs either as designed or with minor modifications. There are four program areas that were not part of the original Georgia Access design that are new requirements for an SBE: a state consumer portal, a Navigator program, a Certified Application Counselor (CAC) program, and a Small Business Health Option Program (SHOP). The State is committed to expediting the standup of these programs and is confident it can successfully implement for PY 2024.

"PY" is "Plan Year." In other words, Georgia is saying that not only do they now want to transition over to a fully state-based ACA exchange platform, they want to do it starting this fall.

As I noted:

If they're really that far along (and assuming the plan is approved by CMS), Georgia will be moved directly from HealthCare.Gov onto their own technical platform this fall. I believe every other state which has made the move from the federal exchange to a state-based exchange (Pennsylvania, New Jersey, Maine, etc.) has taken at least two years to do so (the first year operating as a "federally-facilitated" SBM).

While several activities are still in progress, many of those activities are almost complete. The State is making significant progress toward meeting all SBE requirements and is confident it can implement an SBE for a go-live date of November 1, 2023.

I've been skeptical all along that Georgia would be able to pull off all of the complexities required to successfully transition from the federal exchange to their own full state-based ACA exchange in just 8-9 months...but without having any knowledge of the behind-the-scenes developments, I've tried to keep my doubts in check.

In addition to this, as GA Senator Raphael Warnock & Rep. Lucy McBath noted in March, there are several other reasons to be concerned about making such a significant move in such a short time period...especially right now:

Dear Administrator Brooks-LaSure,

We write to request that you not approve Georgia’s plan to operate its own state-based health insurance exchange for plan year 2024 if the Centers for Medicare and Medicaid Services (CMS) has reason to believe this approval could result in coverage losses for Georgia families. Approving this request may not comply with federal rules, which require a state seeking to set up a state-based exchange to submit an Exchange Blueprint at least 15 months before the state-based exchange’s first open enrollment period and to have an approved or conditionally approved Blueprint and operational readiness assessment at least 14 months prior to launching. We are concerned that an exception for Georgia at this time would put Georgians at higher risk of coverage loss.

This fall and in early 2024 when Georgia proposes to launch its exchange, the unwinding of the Medicaid “continuous coverage” provision will be well underway. Georgia will be in the midst of reviewing the eligibility of millions of enrollees and terminating Medicaid coverage for those who are no longer eligible, or who are eligible but do not complete paperwork requirements or are otherwise unable document their eligibility. Many Georgians could be eligible for health coverage through the federal insurance exchange, and we are concerned that a new, state-based exchange in Georgia would only add to the confusion and complexity for people who are terminated from Medicaid coverage and who will become uninsured unless they take action to transition to an exchange plan.

This summer, the state is also planning to implement a new section 1115 waiver program that will require certain low-income adults to meet a work-reporting requirement in order to obtain and keep Medicaid, further complicating the coverage landscape in Georgia and straining the state’s operations during unwinding. Maintaining the federally-run exchange in Georgia, which successfully provides coverage to more than 800,000 people today, will create greater stability and consistency for Georgians.

Even without major changes to the state’s exchange, coverage losses during this tumultuous period are predicted to be significant. National projections show that children, young adults, and communities of color are likely to be hardest hit. According to the U.S. Department of Health and Human Services’ own analysis, nearly 15 percent of those projected to lose coverage during unwinding are Black and one-third are Latino.

Nevertheless, the Kemp Administration seemed insistent on proceeding; in fact, as Amy Lotven reported in June, they even hired a CEO to operate the new "Georgia Access" exchange.

As of yesterday, however, it looks like they're gonna have to cool their heels for another year after all. Via CMS:

Dear Director Gardner:

Thank you for submitting an Exchange Declaration of Intent on February 13, 2023 and Blueprint Application on February 14, 2023, seeking approval for the State of Georgia (“Georgia” or “the State”) to establish and operate a State-based Exchange (“SBE”) within Georgia’s Office of Commissioner of Insurance and Safety Fire (“OCI”). This letter conditionally approves Georgia’s Blueprint Application to operate an SBE for plan year (“PY”) 2025, and to operate a State-Based Exchange on the Federal Platform (SBE-FP) for PY 2024.

In other words, Georgia is gonna have to follow the 2-step procedure for moving to their own full ACA exchange just like the other 18 states which have previously done so: For 2024 they'll operate as a separate legal entity (with their own board of directors, marketing team/budget, advisory board and so forth), but will still utilize the federal technical platform (HealthCare.Gov) for Open Enrollment and off-season enrollment for the 2024 calendar year. Then, assuming CMS is satisfied that the state-based exchange has complied with all of the other regulatory requirements, they'll be allowed to move to their own enrollment platform ( starting in November 2025.

The Centers for Medicare & Medicaid Services (“CMS”) is committed to working with state partners, like Georgia, to ensure access to high-quality, affordable, comprehensive health coverage. CMS’s decision to conditionally approve Georgia’s establishment of an SBE-FP for PY 2024 and an SBE for PY 2025 is a recognition of the successful work and partnership that Georgia has already conducted toward implementation of an SBE. Specifically, CMS is approving Georgia’s establishment of an SBE-FP for PY 2024, subject to the below conditions, based on Georgia’s progress in meeting two core and complex components of an SBE-FP - the Navigator and assister program, and Qualified Health Plan (“QHP”) certification - as follows:

  • Navigator and assister program: Georgia published a Navigator funding application on May 12, 2023 and submitted Navigator and assister training plans to CMS on June 12, 2023. Georgia is on track to award Navigator grants by Open Enrollment and have Navigators and assisters in place during Open Enrollment.
  • Plan Management: Georgia successfully undertook plan certification responsibilities for PY 2024. Georgia reported on June 8, 2023 that QHP application submissions by issuers were completed. Conditional approval for Georgia to implement an SBE-FP for PY 2024 is contingent upon the State, by August 4, 2023, notifying CMS of its intent to operate an SBE-FP for PY 2024 and submitting a revised Blueprint Application attesting that it will implement the required functions of an SBE-FP under 45 C.F.R. § 155.200(f).1 August 4, 2023 is the final date CMS can prepare the applicable systems to support a new SBE-FP in time for PY 2024 Open Enrollment.

Conditional approval for Georgia to implement an SBE-FP for PY 2024 and an SBE for PY 2025 is also contingent upon the following conditions: 1. Continued demonstration of the ability to perform required Exchange activities consistent with the attestations Georgia has made in its State-based Exchange Blueprint Application submission and any items listed as described in this letter; and 2. Continued compliance with federal regulations and completion of remaining progress milestones by Georgia. CMS will work with Georgia to develop a list of remaining Exchange activity milestones and expected timeline, depending on Georgia’s decision regarding its Exchange operations for PY 2024 and PY 2025. We look forward to working with the State to support these transitions.

Georgia’s Blueprint Application requested that its transition from a Federally-facilitated Exchange (“FFE”) to an SBE begin for PY 2024, or November 1, 2023. CMS expressed concerns to Georgia about the State’s ability to implement the required functions of an SBE under 45 C.F.R. § 155.105(b) within this proposed timeframe, particularly as Georgia had not transitioned first to an SBE-FP (as other SBEs have done prior), planned to implement additional functionality through Enhanced Direct Enrollment (“EDE”), and would make the transition during Georgia’s Medicaid unwinding and other program implementation work. CMS is not approving Georgia’s establishment of an SBE for PY 2024 for the following reasons:

  • Georgia did not submit its Blueprint Application within the required regulatory timeframe to implement an SBE for plan year 2024. Pursuant to 45 C.F.R. § 155.106(a)(2), states that seek to operate an SBE must submit a Blueprint Application to the Department of Health and Human Services (“HHS”) for approval at least 15 months prior to the beginning of an SBE’s first open enrollment (November 1 prior to the plan year).2 Georgia submitted its Blueprint Application on February 14, 2023, which is less than nine months prior to the start of open enrollment for PY 2024 (November 1, 2023), and thus six months later than the required 15-month regulatory deadline. Missing the regulatory deadline presents particular concerns where, as here, the State is seeking to transition from a FFE directly to an SBE, and not an SBE-FP. A transition from a FFE to an SBE is more complex given the Exchange responsibilities than a transition from a FFE to SBE-FP or SBE-FP to SBE, and the 15-month regulatory deadline is necessary for CMS to ensure a state’s operational readiness. Further, Georgia’s February 14, 2023 submission date of its Blueprint Application meets the regulatory deadline requirements for implementation of an SBEFP for PY 2024 and SBE for PY 2025.CMS will work with Georgia on making any necessary updates to its Blueprint Application, contingent on Georgia’s decision regarding Exchange operations for PY 2024 and PY 2025.
  • Georgia was delayed in receiving its state legislative authority to operate an SBE, which impacted its ability to meet its hiring plan benchmarks, a key indicator of a state’s ability to meet the functional requirements for an Exchange as specified in 45 C.F.R. § 155.105(b). As noted in Georgia’s Exchange Declaration of Intent and Blueprint Application, Georgia required passage of authorizing legislation to establish and operate an SBE, which was expected to be enacted by March 30, 2023. Without this authority, Georgia was not able to hire staff dedicated to Exchange implementation and operations. The required legislative authority to operate as an SBE was not enacted until May 2, 2023. While Georgia was able to hire an Executive Director on May 9, 2023, it has remained significantly behind in meeting the hiring plan benchmarks that the State provided CMS on May 5. As of July 25, Georgia hired six of the estimated 17 full-time employees (“FTEs”) which the State had originally expected to fill by July 3, 2023 (out of a total estimated 38-48 FTEs expected to hire by early August). CMS will work with Georgia to develop an agreed-upon staffing plan that will fully staff its SBE-FP and SBE operations, contingent on Georgia’s decision regarding Exchange operations for PY 2024 and PY 2025.
  • Georgia has not fully demonstrated its capability, within a compressed timeline, to implement consumer-facing outreach and education strategies required under 45 C.F.R. § 155.105(b) and 45 C.F.R. § 155.205(b) and (e). Due to the delay in obtaining the Exchange’s authority to operate and hire dedicated staff, Georgia has not provided CMS with the necessary assurances of its readiness to implement a satisfactory internet Web site and robust consumer outreach and education program. As part of the operational readiness review, Georgia provided CMS with its intended consumer facing SBE website content, including its consumer portal landing page. CMS provided Georgia with substantive feedback regarding consumer usability, comprehension, and navigation of the presented website. Georgia’s consumer outreach and education program, including plans for outreach to consumers regarding the transition to an SBE and consumer-facing content to be used by its assisters and new call center, is still being developed. Georgia has also only recently hired its Engagement Director, who will begin on August 1, 2023.

Additionally, Georgia is the first state to propose utilizing EDE partners as part of its SBE implementation and operations. This functionality requires additional time for Georgia, its EDE partners, and stakeholders to work in coordination to develop consumer communications and engage with consumers, to ensure that the transition of consumers from the FFE to the SBE does not result in significant consumer confusion or unnecessary losses in coverage. Additional implementation time will provide Georgia with the opportunity to conduct additional critical consumer testing, continue work on consumer and partner communications, and hold further implementation discussions with issuers, EDE partners, consumer groups, and other stakeholders.

All of these factors are even more critical given the backdrop of historic volumes of Medicaid redeterminations currently underway. Georgia estimates that there could be as many as 650,000 Medicaid disenrollments during the unwinding process and that 40 percent to 60 percent of these consumers will be eligible for enrollment in an Exchange QHP. CMS and Georgia have a joint interest in ensuring these individuals can obtain affordable, comprehensive coverage which, based on CMS’s experience to date, requires an advanced level of coordination between Medicaid and an Exchange, and a significant dedication of resources (including staff) to consumer outreach. The coordination effort between Georgia’s Medicaid and Exchange staff may be further strained by Georgia Medicaid’s concurrent implementation of its new Section 1115 Pathways to Coverage program, which began on July 1.

CMS will work with Georgia to update Georgia’s consumer outreach and education milestones as necessary, depending on Georgia’s decision regarding Exchange operations for PY 2024 and PY 2025.

CMS believes that Georgia‘s establishment of an SBE-FP in PY 2024 will only strengthen Georgia’s transition to an SBE in PY 2025 by allowing Georgia to gain critical experience in Exchange operations, particularly with regard to conducting outreach activities. As noted, due to the need to prepare the applicable systems in time for Open Enrollment, Georgia has until August 4th to notify CMS that it will pursue the transition to an SBE-FP for PY 2024, and to submit its revised Blueprint Application. If Georgia does not provide CMS with this notice by August 4th, CMS will continue to operate an FFE in Georgia for PY 2024. CMS encourages Georgia to consider undertaking this approach if it intends to fully transition to an SBE for PY 2025. Since PY 2020, all states that transitioned to an SBE first operated as an SBE-FP. Further, this approach allows Georgia an opportunity to establish its own SBE-FP user fee, enabling the State to support the financial sustainability of its future SBE operations.

CMS remains committed to working with Georgia on activities to implement a successful SBE and providing technical assistance and recognizes the State’s and its staff’s progress thus far toward establishment of an SBE. We look forward to working with you as we continue to ensure the residents of Georgia have access to quality, affordable health care coverage.

Sincerely, Ellen Montz, Ph.D.
Director, Center for Consumer Information & Insurance Oversight Deputy Administrator,
Centers for Medicare & Medicaid Services