Georgia spent $86M on failing Medicaid 'experiment' — most went in consultants' pockets

In January, standing before a cluster of television cameras on the steps of the state Capitol, Georgia Gov. Brian Kemp promoted his experiment in Medicaid reform as a showcase for fellow conservatives seeking to overhaul safety net benefits around the country.

“What we are doing is working,” Kemp boasted about Georgia Pathways to Coverage. The federally subsidized health insurance program is supposed to cover nearly a quarter-million low-income Georgians who can prove they are working, studying or volunteering.

What the governor did not disclose, however, was that his program is not achieving two primary goals: enrolling people in health care and getting them to work, according to an examination by The Current and ProPublica. The findings were confirmed recently by an independent evaluation commissioned by the state that has yet to be publicly released.

As of the end of 2024, the Pathways program has cost federal and state taxpayers more than $86.9 million, three-quarters of which has gone to consultants, The Current and ProPublica found. The state asserted that costs increased because of a two-year delay to the program’s launch.

A mere 6,500 participants have enrolled 18 months into the program, approximately 75% fewer than the state had estimated for Pathways’ first year. Thousands of others never finished applying, according to the state’s data, as reports of technical glitches mounted. The state also never hired enough people to help residents sign up or to verify that participants are actually working, as Georgia required, federal officials and state workers said.

As a result, the Kemp administration has quietly rolled back a core tenet it heralded when it launched Pathways as an alternative to government entitlement programs for poor people that many conservatives deride as handouts and the nanny state. Rather than verifying that people are working every month, Georgia is confirming that participants meet these requirements only at the time of enrollment and upon their annual renewal, the state said in January.

Georgia’s experience offers a warning for the nation as conservatives attempt to curtail federally subsidized health care for low-income Americans, as outlined by Project 2025, the playbook designed for a second Donald Trump presidency. Congressional Republicans are pushing for deep cuts to Medicaid along with requiring recipients to work. Right now, Georgia is the only state that imposes a work requirement for Medicaid coverage. But nearly a dozen largely Republican-led states are considering work requirements for Medicaid enrollees.

Federal and state officials who have worked on Pathways say a litany of bad decisions, some technical and some political, doomed the program from meeting Kemp’s original goals. Even some lawmakers in Kemp’s own party want to pull the plug on Pathways.

The quarter-million people eligible for Pathways would have had an easier road to coverage had the state simply chosen to expand Medicaid under the Affordable Care Act, the 2010 health reform law that extended insurance to tens of millions of Americans, said Joan Alker, executive director of the Center for Children and Families at Georgetown University McCourt School of Public Policy. Kemp is one of 10 Republican governors who refused federal government subsidies to expand Medicaid under the belief that entitlement programs encourage freeloaders and are a drag on federal and state budgets. Sixteen percent of working-age residents in Georgia lack health insurance, one of the highest uninsured rates in the nation.

In response to Pathways’ low enrollment numbers, Kemp’s spokesperson Garrison Douglas said the governor never thought it was realistic to enroll the entire pool of eligible Georgians in the program. Douglas said Kemp’s health care strategy for low-income Georgians is superior to Medicaid expansion because it saves the state money and funnels participants into private health insurance, rather than what the Kemp administration has described as overregulated government-mandated plans that reimburse hospitals and doctors at lower rates.

“As the governor has said repeatedly, those who continue to promote full Medicaid expansion are selling Georgians a bill of goods,” he said.

The Pathways program is slated to sunset this fall, but Georgia has filed a request with the Trump administration to extend the experiment for another five years with the less stringent verification rules, as independent evaluators recommended. The Trump administration did not respond to requests for comment about its support for Medicaid work requirements and its views on Georgia’s Pathways experiment.

State officials did not explain why Georgia has not been able to meet its own verification standards.

“The governor’s mandate for all state agencies is to continually seek ways to make government more efficient and accessible for hardworking Georgians,” Fiona Roberts, a Department of Community Health spokesperson, said in a written statement.

The state requires Pathways participants to work at least 80 hours a month or be enrolled in school, job training or volunteering — activities the governor’s office says it believes contribute to eventual “financial independence.” Health policy research shows that requiring low-income people to work for health insurance does not increase coverage or boost their economic circumstances because most of them already have jobs.

“If the goal truly is to increase health insurance for low-income Georgians, they are doing it wrong,” said Dr. Harry J. Heiman, a member of a state commission to study comprehensive health coverage and a professor at Georgia State University School of Public Health. “The one thing that Pathways seems to do well is waste taxpayer money on consultants and administrative costs.”

Plagued by Tech Glitches

Pathways was supposed to help a group of Georgians whom the state had previously deemed ineligible for Medicaid: adults between 18 and 64 years old earning less than $15,650 a year if they are single, or $32,150 for a family of four.

The state told the federal government in its application to experiment with Pathways that it hoped to enroll 25,000 of the 246,000 Georgians eligible for Pathways during the program’s first year.

But those seeking coverage faced technical hurdles right away, according to interviews with six applicants as well as federal officials and current and former state employees.

The enrollment portal crashed each of the three times Kelsey Williams tried to apply. The single mother had been kicked off Medicaid last spring, after her son turned 1, per state law allowing her to keep her coverage for a year after giving birth. She called the Pathways customer service hotline for help and was sent through a phone tree that ended in a voicemail asking callers to leave a message.

“You’d go from one robot voice to another,” said Williams, who worked irregular hours as a convenience store clerk outside Macon.

No one called back. She gave up after nearly a month of trying. “I got the feeling that they really didn’t want to help me,” she said.

State officials have paid Deloitte Consulting more than $50 million so far for a software application that often froze and wiped out personal information, forcing applicants to start over. The technology also proved hard to navigate for many of Pathways’ target clients who don’t own smartphones or have access to reliable high-speed internet.

As of January, the state’s own documents show that the program had a backlog of 16,000 applications awaiting processing, and in some months, upwards of 40% of people who started applications for Pathways gave up.

An independent evaluation from December, obtained by The Current and ProPublica, analyzed data gleaned from the first 13 months of the Pathways program and noted that applicants experienced administrative barriers to enrollment. People 50 and older had an especially difficult time proving they met the requirements, the evaluation said. The program requires applicants to provide paperwork that verifies their work status, including pay stubs and tax documents. That protocol contradicts Medicaid regulations that states should use available data to confirm most eligibility criteria, when possible, instead of making people provide documentation.

For Georgians who did manage to enroll, the technology problems persisted when they were required to verify each month that they had a job or were otherwise participating in a “qualifying activity.”

Paul Mikell lives in an area outside Atlanta without reliable internet service — and he doesn’t have the income for a phone plan with unlimited data. It takes him more than an hour each month to upload the employment documents necessary to reconfirm his eligibility, often using the free Wi-Fi at his public library.

Sometimes, Mikell said, the task has stretched days, even a whole week, because the Pathways verification portal freezes or crashes. One time, he said, he waited eight days for customer support to retrieve a password and restore his access.

The 49-year-old works part time for a hauling and trucking company in exchange for housing. He also picks up odd jobs to support his young son and elderly father. He does not receive traditional pay stubs that could be easily pulled by the state to verify his work status.

“It’s really, really difficult,” said Mikell, adding that stress over the possibility of losing coverage keeps him awake at night. “But it’s the only health care for someone like me.”

Mikell’s informal employment situation is typical for many low-income Americans who exist outside mainstream financial networks, and illustrates why verification can be an arduous process for programs with work requirements, said Jennifer Wagner, an expert in Medicaid enrollment technology at the Center on Budget and Policy Priorities, a Washington think tank. In Georgia, 65% of people eligible for Pathways are employed at least part time, while many of the rest are tethered to unpaid work such as caregiving that Pathways does not recognize, state data shows.

To help automate the application and verification processes, Georgia uses digital tools to collect wage and work histories of employees at large companies as well as those who are self-employed. But these tools are not comprehensive, and the task of verifying applicants’ eligibility for Pathways largely falls on a cadre of overburdened caseworkers.

In August 2023, a month after Pathways launched, the state was only able to verify that 39 of the 152 enrollees were indeed working or otherwise engaged in activities deemed acceptable by the state, according to state reports to the Centers for Medicare and Medicaid Services. Those reports attributed the low numbers to a lack of “functionality” and did not provide further explanation.

The state’s contracts with Deloitte, which The Current and ProPublica obtained through a public records request, were heavily redacted and reveal no detail about the technical design of Pathways’ digital platform or how it would be tested before launch.

Deloitte declined to comment and referred questions about the technical difficulties to Georgia officials. Roberts, the spokesperson for Georgia’s Medicaid agency, referred to Pathways as “both a policy and technical success” but said it had to work through issues “consistent with the launch of a new program of similar scale and complexity.”

“Based on feedback from customers and the community, the state continues to evolve the Pathways program and its processes,” Roberts said in a written statement.

The state still requires Pathways recipients to upload paperwork every month, but Georgia is only verifying it annually, Roberts said. The state also says it is not kicking anyone off the rolls.

An Overwhelmed Workforce

Loosening Pathways’ verification process does not change what federal and state officials say is another fundamental flaw in the program: Getting people enrolled would ultimately hinge on an understaffed department already struggling to keep up with processing applications for other safety net benefits.

About 30% of the staff at Georgia’s Division of Family and Children Services that oversees benefits enrollment and employment verification had turned over between 2017 and 2022, according to state data. Former agency managers attribute the unusually high churn to a workforce fed up with low pay and high stress, exacerbated by the coronavirus pandemic.

In 2023, the year Pathways launched, the agency was already swamped.

Caseworkers had started the time-intensive task of reenrolling the 2 million Georgians who had traditional Medicaid benefits, a process that happens every five years to ensure that participants still meet the requirements.

Federal officials were simultaneously scrutinizing the department for its backlog of 157,000 food stamp applications and ordered it to develop a “corrective plan” to process those benefits more quickly. Georgia was also slipping behind the 45-day standard for processing Medicaid applications, according to federal data.

Meanwhile, for approximately six months before Pathways started, caseworkers needed extensive training for the new program, further delaying reviews of food stamps and Medicaid applications, former managers said.

That spring, Kemp approved a temporary fix to the department’s workforce shortage: using federal grants to hire 300 additional caseworkers to handle the flood of Medicaid renewals. But state officials did not beef up staffing to handle Pathways applications, according to two federal employees and one former state manager, despite the fact that so much of Kemp’s political capital was riding on the program’s success.

The workload ballooned after Pathways’ launch in July 2023, according to three former caseworkers. “I’d go into work every day with piles and piles of files, and each of those files represented a real human being with real suffering,” said Deanna Matthews, who quit last year. “What people don’t realize is that some of us were processing food stamp applications and our families were struggling and needing food assistance as well.” (Starting salary for a caseworker who determines applicants’ eligibility for federal benefits is approximately $32,000 — the same as the federal poverty line for a family of four.)

In December 2023, the state agency overseeing DFCS moved 200 caseworkers who had been processing applications for Medicaid to tackle the backlog of food stamp applications.

In Pathways’ first six months, the department had enrolled just 2,300 people, according to state data.

In response to questions from The Current and ProPublica, Ellen Brown, a spokesperson for the Georgia Department of Human Services, said the state has committed enough people to administer Pathways but that it “can always use more caseworkers” and continues to hire.

At the state Capitol, Republican legislators representing rural counties, where large numbers of uninsured adults live, had begun questioning their governor’s push for Pathways. They sought advice from other Republican-led states that were expanding Medicaid without work requirements.

Arkansas had removed its work requirements after a federal judge ruled that such policies resulted in a significant number of people losing health coverage, which goes against Medicaid’s rules. The former head of North Carolina’s Medicaid agency testified to Georgia lawmakers that Medicaid expansion would boost local economies, rather than drag down state budgets, as many conservatives fear.

Last spring, a bipartisan group of Georgia lawmakers introduced bills in both the House and Senate to allow Medicaid expansion and let Pathways sink into oblivion.

“What we’re doing so far just hasn’t seemed to work. And so, at some point, we’ve got to be open to more ideas,” Georgia state Sen. Matt Brass, a Republican from Newnan and co-sponsor of the bill, said during a committee hearing at the time.

But the measure never made it to a full vote in either chamber.

Kemp quashed the rebellion after his allies in the Legislature argued that Pathways needed more time to prove itself. Georgia awarded Deloitte a $10.7 million advertising contract last summer to create television, radio and social media spots encouraging enrollment and to tout the program at community events around the state.

As a new legislative session is underway, no bill to abandon Pathways in favor of expanding Medicaid has emerged.

“We are focused on Pathways,” said state Rep. Lee Hawkins, a Republican dentist who represents the rural constituency of Gainesville. “We are going to build on what we’ve got and focus on making it better.”