Georgia’s 1332 waiver, navigators and ads

Yesterday, I briefly discussed a new working paper that I’m co-first authoring with Rebecca Myerson.  We wonder if ACA market insurers changed their television advertising in response to decreases in navigator funding.  Our hypothesis going into the project was that we should see advertising increase as navigator funding decreased as we thought these two information channels may be substitutes for each other.

We were wrong.

Right now, we’re finding strong, consistent null results no matter what we do to the data.  We did event studies — nada.  We did difference in difference with 2015 as the start of the run — nada.  We did difference in difference with 2016 as the start of the run — nada.  We dropped each state from the analysis one by one to see if there was a single state warping everything — and we got nothing.


Why does this matter?

It matters because of Georgia.

Georgia has filed and received approval for a two part Section 1332 waiver for the ACA. A 1332 waiver allows a state to make significant changes to the ACA health insurance markets as long as guardrails of coverage, access, affordability to consumers and federal costs are met. The first part is — an interesting only to health economists — a reinsurance program that has some really fascinating within state and year county level payment variation. The Centers for Medicare and Medicaid Services has and will approve similar waivers for reinsurance from other states. As a general reminder, there is often a thin line between “exceedingly clever” and “fraud” when dealing with weird boundary condition rules.

The second part of the Georgia waiver is called the “Georgia Access Model.” The state proposes to shut down and not replace it with a state based marketplace. Instead, private entities would do all of the outreach, assistance and marketing while the state would verify incomes and assign subsidies. This part of the waiver was approved in November 2020. The current CMS leadership believes that changing legislative and policy circumstances could lead to the Georgia Access Model failing to meet one or more of the guardrails.

Georgia has argued that the private sector will be more efficient and effective at assisting and enrolling people than a government run website and/or navigator program. The forthcoming work at the American Journal of Health Economics by Myerson and Li show that enrollment of marginalized populations declined when counties experienced larger navigator funding cuts while our current working paper shows that insurers are not responding to the decline in navigator funding by increasing advertising as an information channel compensatory buff.

Insurers have a different set of objectives than the government when it comes to enrollment. Insurers want to enroll people who are highly likely to be profitable. The government wants to enroll people who are highly likely to need insurance and who may or may not be profitable after risk adjustment.

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