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Most of the tax dollars used to launch and implement the nation’s only Medicaid work requirement program have gone toward paying administrative costs rather than covering health care for Georgians, according to a new report by the Government Accountability Office, the nonpartisan agency that monitors federal programs and spending.
The government report examined administrative expenses for Georgia Pathways to Coverage, the state’s experiment with work requirements. It follows previous reporting by The Current and ProPublica showing that the program has cost federal and state taxpayers more than $86.9 million while enrolling a tiny fraction of those eligible for free health care.
The GAO analysis, which does not include all the Pathways administrative expenses detailed by the news outlets, shows that as of April the Georgia program had spent $54.2 million on administrative costs since 2021, compared to $26.1 million spent on health care costs. Nearly 90% of administrative expenditures came from the federal budget, the report concluded, meaning that Georgia’s experiment is being funded by taxpayers around the country. Federal spending will likely increase given that the Centers for Medicare and Medicaid Services has approved $6 million more in administrative costs not reflected in this report because it was published before the state submitted invoices.
The spending watchdog agency echoed its 2019 criticism of the Centers for Medicare and Medicaid Services for a lack of oversight of administrative costs associated with state initiatives approved in the name of Medicaid reform.
The September GAO report said the Medicaid agency never required Georgia to detail the costs of building and implementing the program. The federal approval process for states that want to experiment with their Medicaid systems “does not take into account the extent to which demonstrations will increase administrative costs,” the report said.
Georgia Gov. Brian Kemp, a Republican, promoted Pathways as an example of how fellow conservatives around the country could overhaul federal safety net benefits and end reliance on what critics deride as handouts to low-income Americans. Congressional Republicans cited Pathways as a model for the federal Medicaid work requirement law passed in July that will take effect in 2027. The Georgia Pathways program was slated to expire Oct. 1, but the state has requested that the federal government extend the experiment for five more years, which state health officials say the Trump administration is expected to approve in coming weeks.
The Georgia program was supposed to expand free health care to a group the state had previously deemed ineligible for Medicaid: adults under 65 years old who earn less than the federal poverty line of $15,650 a year. To qualify, Georgians had to prove that they work, study or volunteer at least 80 hours a month.
But enrollment in Georgia Pathways has remained low. The most recent state data shows that 9,175 of the nearly quarter-million low-income Georgians eligible for the program were enrolled as of Aug. 31. Previous reporting by The Current and ProPublica revealed that was due to glitches in the digital platform people must use to enroll, chronic understaffing in the state agency charged with enrollment help and a maze of bureaucratic red tape.
Georgia officials previously told The Current and ProPublica that Pathways was never designed to maximize enrollment. Carter Chapman, Kemp’s spokesperson, said Monday that the Kemp administration remains committed to Pathways and making refinements to meet the health care needs of Georgians.
In December Democratic senators critical of Medicaid work requirements, including Georgia’s Jon Ossoff and Raphael Warnock, had asked the GAO to report on the administrative costs of implementing Pathways and verifying that recipients are working, studying or volunteering.
“Administrative spending has outpaced spending for medical assistance (e.g., health care services)” for Georgia Pathways, the report said. “This was likely driven by the up-front administrative changes needed to implement the demonstration, the delayed start date for enrollment, and any duplication in administrative spending due to the delay.”
Georgia officials told the GAO that the administrative costs associated with Pathways increased by 20% to 30% because of a two-year delay caused by legal battles with the Biden administration, which tried to end all Medicaid work requirement programs that had been approved before the Democratic president took office in 2021. State officials said the delay resulted in having to duplicate some spending, including IT system changes, staff training and other implementation costs, the report said. The report did not provide evidence to support the state’s assertion.
“This report was requested by the same individuals who have no new or good ideas for addressing healthcare needs in Georgia,” Chapman said in a statement. “Now, as other states prepare to adopt our model and reject one-size-fits-none big government healthcare, Democrats like Senators Ossoff and Warnock are trying to rewrite history after four years of inaction and blame the State for costs associated with their own stonewalling.”
Warnock said the GAO’s findings reinforce his opposition to the Trump administration’s push to nationalize work requirements because of the amount of tax dollars going to expenses other than health care.
“Now the entire country can see what we in Georgia already know: Georgia’s Medicaid work reporting requirement program is the real waste, fraud, and abuse,” Warnock said in a statement. “This report shows that Pathways is incredibly effective at barring working people from health coverage and making corporate consultants richer.”
Ossoff called Georgia Pathways “a boondoggle that’s wasted tens of millions on pricey consultants while Georgia hospitals struggle and Georgians get sick without health insurance.”
The GAO report does not include the $27 million that Deloitte Consulting earned to market Pathways or the approximately $10 million that went toward additional consulting, including by other firms, and legal fees related to the state’s two-year court battle with the Biden administration.
Deloitte did not respond to a request for comment. The firm previously declined to answer questions about its Georgia Pathways work, referring requests for information to the state’s Department of Community Health. The agency did not respond to requests for comment but previously described Deloitte’s marketing and outreach work as “robust” and “comprehensive.”