Georgia’s healthcare sector and broader economy are bracing for a massive financial hit, potentially in the billions, if enhanced federal subsidies for Affordable Care Act (ACA) marketplace plans are allowed to expire. A new analysis from the Urban Institute projects that Georgia’s healthcare providers alone stand to lose a staggering $3.7 billion in revenue by 2026, marking one of the largest projected losses in the nation.
The looming expiration of these subsidies, which significantly reduce monthly insurance premiums for millions nationwide, poses a unique and severe threat to Georgia due to its policy landscape and high reliance on federal assistance for health coverage.
How Georgia Stands to Lose Billions:
The financial consequences for Georgia are multifaceted and far-reaching:
Increased Uncompensated Care Costs: When hundreds of thousands of Georgians inevitably lose their health coverage due to unaffordable premiums, they won’t stop needing medical care. Hospitals and other providers will be forced to absorb the cost of this care, known as uncompensated care, which is expected to surge dramatically.
Reduced Health Spending: The loss of federal subsidies is projected to cause overall health spending on non-elderly Georgians to drop by 4.8%. This significant contraction in spending will strain the budgets of healthcare providers across the state.
Shrinking State Reinsurance Funds: Georgia operates a state-run reinsurance program, partially funded by federal “pass-through” money, which helps lower premiums by covering a portion of expensive claims. If enhanced federal subsidies end, this crucial federal funding will likely decrease, requiring the state to allocate more of its own money to maintain the program or risk seeing premiums climb even higher.
Strain on Hospitals, Especially Rural Ones: Many rural hospitals in Georgia are already operating on extremely thin margins. A rise in uninsured patients and the corresponding increase in uncompensated care could push these vulnerable institutions past their breaking point, potentially forcing closures or severe service cuts. Such closures would not only limit access to care but also have devastating ripple effects on employment and local economies in those communities.
Decreased State and Local Tax Revenue: A previous analysis estimated that repealing the ACA would result in Georgia losing over $1 billion in state and local tax revenue, and that the state’s gross product would decline. The expiration of subsidies and the resulting economic contraction are expected to similarly reduce tax income, further straining state and local budgets.
Georgia’s Unique Vulnerability:
Several factors exacerbate Georgia’s financial exposure to the expiration of these subsidies:
No Medicaid Expansion: Georgia remains one of the states that has not fully expanded its Medicaid program. This means that if ACA marketplace coverage becomes unaffordable, hundreds of thousands of low-income Georgians – who earn too much to qualify for traditional Medicaid but too little to afford private insurance without robust subsidies – will have no affordable alternative for health coverage. This creates a significant “coverage gap” that leaves many uninsured.
High Reliance on Subsidies: A vast majority of the 1.5 million Georgians currently enrolled in the state’s ACA marketplace, known as Georgia Access, rely heavily on the enhanced premium tax credits to afford their health insurance. The state’s recent success in boosting enrollment and reducing its uninsured rate is largely dependent on this critical federal financial assistance.
Significant Premium Increases: Without the enhanced subsidies, premiums in Georgia are projected to rise by an average of a staggering 75% for many marketplace enrollees. These steep increases are expected to price hundreds of thousands of people out of the market, leading to a substantial increase in the state’s uninsured population.
With the expiration of enhanced ACA subsidies looming, Georgia faces a critical juncture. The decisions made regarding these federal payments will have profound and lasting impacts on the health, financial well-being, and economic stability of the state and its residents.
Comments