On Georgia's version of Medicaid expansion, get to know the 'hidden factors'

This is a commentary by Kyle Wingfield, president and CEO of the Georgia Public Policy Foundation, a libertarian-leaning think tank based in Atlanta.

It seems no Georgia legislative session is complete without a debate over Medicaid expansion. Only this year, there's another idea that isn't just being proposed, but implemented.

Georgia is months away from launching one of Gov. Brian Kemp's signature policies to expand health coverage. Kemp's Georgia Pathways "waiver" allows low-income workers – who typically make too much to qualify for Medicaid, but too little to afford commercial insurance, including the Affordable Care Act's subsidies – to gain coverage.

The Trump administration approved Kemp's plan in 2020, only for the Biden administration to rescind the agreement. A federal judge rebuked that decision last August, opening the door for Georgia Pathways to take effect. Kemp's second waiver, modifying how the ACA works in Georgia, is still working its way through the courts.

Critics of Kemp's plan maintain the state would be better off with a broader expansion of Medicaid, as the ACA envisioned. They claim it would cover more people for the same or less money. But they leave out some pertinent facts.

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What to know about Georgia Pathways?

The first point is that a broader Medicaid expansion wouldn't be limited to the uninsured. A study last year by the Urban Institute found that about 448,000 uninsured Georgians would gain coverage under a full Medicaid expansion – but so would 291,000 Georgians already covered through their employer.

That means almost 40% of the new enrollees would have already been insured. It also means that more than two-thirds of uninsured Georgians – almost 1 million people – would still lack coverage.

How does it make sense to replace the coverage of hundreds of thousands of people, while leaving almost a million people uninsured? The added cost of covering those already-covered Georgians pushes the price tag of Medicaid expansion far higher than proponents usually allow.

It's true that Kemp's plan would cover far fewer people, about 50,000 at any given time. But that doesn't account for people who would be eligible for a time and then rise out of eligibility by earning more money, meaning a larger number of people would be covered over time.

The second thing proponents usually omit is that Georgians pay federal taxes, too – meaning there is no "free" money involved in Medicaid expansion. The total bill for full expansion, including federal dollars and all of those people who already had coverage anyway, comes to nearly $4 billion per year. The Kemp plan would cost a fraction of that – perhaps 10% – even including federal dollars.

If you pay state and federal taxes, then it doesn't matter which bureaucrat takes the money. It's still your money. And to the extent that the money would be borrowed, it would be $4 billion per year plus interest – which is exacting an ever heavier toll.

The third thing proponents fail to mention is that Medicaid isn't a particularly good kind of insurance to have. In fact, if you actually want to use it to see a doctor, it's probably the worst kind to have, because it is accepted by the fewest doctors. That's because it reimburses doctors less than other insurance for the services they provide. So, you might receive health insurance, but it doesn't necessarily mean you will have access to health care.

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That not only is bad news for patients. It also is bad for taxpayers, because the next demand after expansion will be to increase Medicaid's reimbursement rates so that more doctors will accept Medicaid. That can't be done only for new enrollees, so it will cost Georgia taxpayers billions of dollars more per year – a hidden cost of expansion.Kemp's plan is better on both counts because many new enrollees will use the funds to join their employer's plan.

That should mean better access to care and lower financial risk for taxpayers.

These points are often overlooked because proponents of Medicaid expansion are ultimately trying to build toward government-run health care for all. The rest of us, who think there is a better way to ensure everyone gets the health care they need, must understand these hidden factors.

Contact Wingfield through the Georgia Public Policy Foundation website at georgiapolicy.org.