Georgia: Republicans may go the Arkansas "private option" route to save face on Medicaid expansion?

A couple of weeks ago, Ariel Hart of the Atlanta Journal-Constitution reported that after over a decade of refusing to consider ACA Medicaid expansion for over 400,000 state residents, Georgia's Republican-controlled legislature may finally be warming up to the idea of embracing full expansion of the program:

For the first time in a decade, high-ranking Georgia GOP legislators on Thursday convened a meeting to hear testimony on full Medicaid expansion to all the state’s poor people.

At the hearing Thursday, the idea was floated over whether to expand Medicaid in exchange for a political deal to roll back regulations that restrict who can open a new health care business. Those regulations are called Certificate of Need, or CON.

The "Certificate of Need" situation was explained in a different article from August in the Georgia Recorder by Jill Nolin:

Both chambers have set up study committees to examine Georgia’s certificate of need program during the legislative off-season after Lt. Gov. Burt Jones came up short in his push to ease restrictions during his first session presiding over the state Senate.

A bill that would have exempted most rural hospitals from the certificate of need process cleared the Senate earlier this year with a 42-13 vote but stalled in the House. It remains alive for next session, which begins in January.

The obscure sounding regulatory program controls the number of health care services in a geographic area by requiring health care providers that want to open or expand to show there is a demand for more services. A rival provider can challenge an application if they are within 35 miles of the proposed project.

Supporters of the program argue the rules help protect fragile rural hospitals from start-ups that might pop up and poach patients seeking profitable services. Critics say it’s an antiquated system that limits access to care and hasn’t stopped rural hospitals from closing their doors.

Apparently, this would be similar to the compromise agreed to in North Carolina to push ACA Medicaid expansion through there as well.

Well, today Ms. Hart and her colleague Greg Bluestein report that the Expansion/CON deal is looking more likely, although there may be an additional twist included to push it through:

Could Georgia adopt an Arkansas-style Medicaid plan?

Senior Republicans see an opening for a health care overhaul

Key Republicans say they’re open to legislation that would add hundreds of thousands of poor Georgians to the state’s Medicaid rolls — and bring in billions of federal dollars to subsidize it — as part of a compromise to roll back hospital regulations.

Some are giving a fresh look to a program adopted in Republican-led Arkansas, where 250,000 additional residents are eligible for Medicaid coverage under a long-running initiative that health care analysts have dubbed the “private option.”

And senior officials say a tradeoff could involve changes to certificate of need rules sought by Lt. Gov. Burt Jones and his allies that could clear the way for new hospitals, particularly in rural parts of the state, and for-profit medical offices.

Unfortunately the full article is behind a paywall, but the Arkansas-style "private Medicaid option" part seems to be the major addition to the arrangement.

I already had a basic understanding of how the Arkansas program (dubbed "AR Home) works, but David Ramsey of Arkansas Times helped me with some of the details. Essentially:

  • Instead of enrolling the Medicaid expansion population into Medicaid itself, the state instead enrolls them into traditional Medicaid for the first month only but then moves them into ACA-compliant Qualified Health Plans instead, and then provide "wraparound funding" for cost sharing (deductibles, co-pays, etc) to bring overall coverage up to roughly what it would be under actual Medicaid.
  • A portion of the enrollees deemed "medically frail" or "inactive" (ie, those who almost never actually utilize their coverage) are instead routed into traditional Medicaid after all.
  • The federal government still pays 90% of the cost for both populations, with the state picking up the other 10%.

On the surface, this may sound perfectly fine: The same people are still getting the same level of comprehensive healthcare coverage at no (or virtually no) cost to them, so what's the problem?

Well, the catch is that a full price private QHP policy costs a lot more than Medicaid does. According to the Arkansas HHS Dept., QHPs for the ARHome population costs an average of around $759/month per enrollee, while traditional Medicaid only averages around $596/month. That $596 average isn't broken out into populations (children, seniors, etc) and there's some other factors not included in this report, but you get the idea.

The federal government covers 90% of the cost of the ARHome population ($683/mo) vs 72% of the traditional Medicaid population. Under a traditional Medicaid expansion arrangement, the feds would still be covering 90% of the cost, but that cost would apparently only be around $536/mo.

Essentially the feds are paying Arkansas insurance carriers as much as an extra $147/month ($1,764/year) to cover the exact same population for virtually identical coverage! For ~337,000 people (as of's dropped somewhat since then via the Unwinding process), that's a stunning $50 million extra per month pouring into the Arkansas economy than would otherwise be if they had simply gone the traditional Medicaid expansion route.

On the flip side, the state is paying 10%...around $76/mo per enrollee vs. around $60/mo. They have to chip in around $5.4 million per month, or $65 million more per year...but they presumably make up for that by state taxes on the insurance carriers who are receiving that extra ~$600 million per year.

No, none of it makes any sense, yet here we are...and it sounds like Georgia may end up going down a similar road. It's stupid and inefficient, but if this is what it takes to finally provide healthcare coverage for another 400,000 people, I'll take it, I suppose.