Chris Denson, director of policy and research at the conservative Georgia Public Policy Foundation, which supports Pathways, said the low enrollment numbers are “just part of the ramping up.”

The program was intended to start in July 2021 but was delayed two years due to legal wrangling. In December 2022, Georgia officials told the federal Centers for Medicare & Medicaid Services that it would cost at least $51 million over two years to design, develop, and implement an eligibility system, funds that would largely be channeled to Deloitte Consulting, according to the documents KFF Health News obtained.

About 45% of Pathways applications were still waiting to be processed, based on the state’s most recent monthly reports, said Leah Chan, director of health justice at the Georgia Budget and Policy Institute, a nonprofit research organization that supports full Medicaid expansion.

The eligibility system, she said, “the thing that we’ve spent the most money on, is actually one of the things standing in the way of the program seeing higher enrollment.”

The state Department of Community Health reported $26.6 million in Pathways spending through Dec. 31, of which more than 80% was paid for using federal funds. Deloitte was paid $2.4 million to prepare and submit the application to the federal government. Just $2 million was paid to insurers to cover medical care. In the fourth quarter, administrative costs alone rose by more than $6 million.

The total costs do not include legal fees for defending the Pathways program. The state attorney general’s office said that as of Feb. 7 those costs surpass $230,000.

In striking contrast, North Carolina has enrolled 380,000 beneficiaries in its Medicaid expansion as of March 1, according to that state’s Department of Health and Human Services. North Carolina became the 40th state to expand Medicaid under the ACA on Dec. 1, a move that has prompted fresh debate over expansion in a handful of other Southern holdout states.

Georgia, which has one of the highest uninsured rates among states, is currently the only state that requires people in its Medicaid expansion population to prove they are working or doing other qualifying activities to gain health coverage.

A spokesperson for Kemp, Carter Chapman, told KFF Health News that the governor “remains committed to implementing Georgia Pathways, an innovative program expanding coverage to tens of thousands of otherwise ineligible, low-income Georgians, despite the Biden administration’s continued efforts to disrupt its rollout.”

In February, citing the delays in implementation, Georgia filed a suit against the federal government to ensure the work requirement program could continue running through 2028 instead of 2025, when it was originally scheduled to end. CMS refused to comment because of pending litigation.

Georgia’s cost estimates are in line with what other states anticipated for administrative spending for Medicaid work requirement programs, including Kentucky’s projected spending of $272 million, according to a 2019 report from the Government Accountability Office, a federal agency that recommended CMS consider administrative costs in such applications.

In Arkansas, administrative costs for the state’s work requirement program were nearly 30% higher than costs of running standard Medicaid in 2016, according to a report from the Arkansas Center for Health Improvement, a nonpartisan health policy group in the state. People struggled to prove they qualified because setting up online accounts was difficult and confusing and many had limited access to the internet, said Robin Rudowitz, a vice president at KFF and director of the Program on Medicaid and the Uninsured. Arkansas’ work requirement program ended in 2019 after a judge blocked it, but not before 18,000 people lost coverage. Unlike Arkansas, which placed a work requirement on a population already receiving Medicaid expansion benefits, Georgia is offering coverage to new people who qualify. But the program’s expense may not be worth sustaining it, Sommers said.

Typically, in Medicaid, administrative costs range from 12% to 16% of overall program spending, said Laura Colbert, executive director of the advocacy group Georgians for a Healthy Future, which supports full Medicaid expansion.

“It’s reasonable to expect that at least 80% of costs of a public or private health insurance plan to go toward health care and services,” she said.

©2024 KFF Health News. Distributed by Tribune Content Agency, LLC.