Ralph Hudgens

State insurance chief asks Congress to allow more local control

Georgia’s insurance commissioner wants Republicans in Congress to allow states more flexibility in setting their own health insurance rules.

Ralph Hudgens, who has long opposed the Affordable Care Act, also says that when it is repealed, as is likely, the federal government should fund state “high-risk’’ insurance pools for people with pre-existing health conditions.


And Hudgens supports insurers selling policies across state lines, even though a Georgia law allowing such sales has not led to any takers.

He makes the comments in a Jan. 13 letter to U.S. House Majority Leader Kevin McCarthy (R-Calif.), who, along with other House leaders, wrote to governors and insurance commissioners asking for their views on health care changes under the new Congress.

“I welcome any action by the federal government that truly shifts authority away from Washington, D.C., and returns it to Georgia and allows our state to set policy in areas so important to the lives of our citizens,’’ Hudgens writes.

The Republican-led Congress is poised to pass legislation to repeal the ACA and develop a replacement plan. Their previous efforts to do so went nowhere, but now they have an ally in the White House. New President Donald Trump has made scrapping the health law a priority.

Georgia Gov. Nathan Deal, like other governors, was among the recipients of the letter from McCarthy and House leaders. A spokeswoman for Deal told GHN last week that his staff was reviewing it.

The spokeswoman, Jen Ryan, could not be reached Monday on whether Deal had sent his reply.

Ralph Hudgens

Deal in the past has called for more state flexibility on Medicaid, which in Georgia covers nearly 2 million people, most of them children.

Deal told GHN in 2014 that he has “often discussed the advantages of a block grant. States need more flexibility in order to make their program work for their unique population rather than a one-size-fits-all Washington mandate.’’

On Sunday, in fact, a top adviser to Trump said the president’s plan to replace the ACA will propose a block grant —  giving states a fixed amount of federal money to run their Medicaid programs.

A block grant, said Kellyanne Conway, would ensure that “those who are closest to the people in need will be administering’’ Medicaid.

Some skeptical reactions

But some ACA advocates say that a block grant would disadvantage Georgia, which has a per-beneficiary spending in Medicaid much lower than most states.

“Proposing that block grants give states flexibility really means flexibility to cut services and restrict eligibility,’’ Laura Harker, policy analyst at the Georgia Budget and Policy Institute, said Monday.

The current Medicaid structure allows federal funding to adjust every year based on need, Harker said. “For example, the amount of federal funds grows during an economic downturn when more people need the program,’’ she said. “A block grant would reduce federal funding over the next decade and shift more costs to the state.”


Block grants are typically based on historical spending, Harker said. “This would mean less money to cover enrollees in Georgia’s Medicaid program compared to other states, because Georgia ranks 49th among states in Medicaid spending per enrollee.”

Meanwhile, it’s not clear what will happen to Medicaid in the 31 states that expanded the program under the ACA. Republican governors such as John Kasich of Ohio have called for expansion to continue under the new GOP health plan.

Kasich, who ran unsuccessfully for president in 2016 and frequently clashed with Trump, has recommended that Medicaid expansion not be repealed, while indicating he’s open to some changes, such as in income eligibility, NPR reported Monday.

An idea some say has failed

In his letter to Majority Leader McCarthy, Hudgens calls the ACA a “failed overhaul of the health insurance industry.”

Many lawmakers, in their plans to change health care, have pushed high-risk pools for people with pre-existing conditions.

Prior to the ACA, Georgia had created the legal mechanism for a high-risk pool, but never funded it. Other states found that high-risk pools had financial difficulties, and some had limitations on coverage, the New York Times reported.

President Obama signing the ACA into law.
President Obama signing the ACA into law.

The ACA, passed in 2010, allowed the creation of a pre-existing insurance pool as a stopgap until the law was fully implemented in 2014. By February 2012, the number of Georgians in the state’s high-risk pool for people with pre-existing health conditions nearly tripled in less than a year, to 1,476.

Hudgens says in his letter that the ACA’s requirement for most people to have insurance or be penalized did not work in resolving the pre-existing condition problem, leading to what he called significant cost increases.

A high-risk pool for high-cost individuals, funded by the feds and run by states, would allow the risk pool for other people “to function normally,” said Hudgens.


His call for insurance sales across state lines comes despite the failure of a similar Georgia law.

The state Legislature in 2011 passed a bill letting insurers sell any policies in Georgia that they offer in other states. The law is still in effect. But since it was passed, no health insurer has taken advantage of it, GHN reported in December.

The legislation was praised by supporters and business groups as a way to skirt the state’s required benefit coverages – such as screenings for cervical, prostate and colorectal cancer, along with mammograms – and thus lower the sticker price of insurance.

Harker said Monday that insurers did not end up offering out-of-state plans in Georgia “largely because of lack of demand and difficulty building a local network of providers.”

But Hudgens, in his letter, argues that the ACA, by requiring minimum essential benefits plans, “effectively pre-empted’’ the Georgia law.