Governor Announces Healthcare Reform to Insure More Georgians

1/30/08 Georgia Governor Sonny Perdue announced in a press conference today his support of health insurance reform legislation that will be filed by Senator Judson Hill and Representative Mickey Channell . The legislation will insure more Georgia citizens by expanding the availability and affordability of High Deductible Health Plans and Health Care Savings Accounts in Georgia.

“Insuring more Georgia citizens is our goal with this reform legislation,” said Governor Sonny Perdue. “More insured citizens means lower costs for all taxpayers, and preventative care means a healthier population. This legislation will incentivize small business owners to provide low cost health insurance to employees and their families.”

“This is a market-based solution focused on empowering individuals and rewarding them for making healthy choices. This plan will make affordable health insurance more accessible for the uninsured and working families,” said Senator Hill. “I have been working on this issue for years with various health care leaders, so I greatly appreciate the Governor's leadership that will make policy ideas a policy reality for our families.”

“This legislation makes a real difference for Georgia’s families and would make quality, affordable healthcare coverage affordable for nearly half a million Georgians,” said Representative Mickey Channell. “By harnessing the power of the free market, we’ll see more Georgians able to purchase and maintain their own healthcare coverage.”

A High Deductible Health Plan (HDHP) is a health insurance plan that offers consumers lower premiums and higher deductibles than a traditional health plan. A Health Savings Account (HSA) allows consumers to set aside funds for future qualified medical health expenses on a tax-free basis.

The health insurance reform legislation announced today has several provisions to make HDHPs paired with HSAs more affordable and available in the Georgia insurance market. The legislation will incentivize small businesses to provide HDHPs with HSAs. According to the Center for Health Transformation, approximately 500,000 Georgians could become insured if the reform legislation is passed through the 2008 Georgia General Assembly.

Provisions of the health insurance reform legislation include:

Insurance Regulation Changes:

Rebates for Behavior Modifications: Allows for rebates for consumers who have HDHPs with HSAs when they make behavior modifications, such as smoking cessation, weight loss or controlling diabetes and blood pressure. The rebate could be deposited into the consumer’s HSA or be demonstrated through a lower deductible.

Reduced Restrictions on Reimbursements to Non-Preferred Providers: Gives flexibility to insurance companies to reimburse at lower rates when a patient chooses an out-of-network provider. This flexibility allows the insurance company to offer lower premiums to the consumer.

Remove Restrictions on Health Reimbursement Arrangements (HRA): HRAs are arrangements that allow an employer to reimburse an employee for certain medical expenses. This legislation would allow companies that provide HRAs to reimburse employees using pre-tax dollars.

Premium Tax Exemption:

Currently HDHPs are subject to state and local premium taxes. This legislation would remove state and local premium taxes in Georgia, saving consumers $11.4 million in 2009 in state tax savings alone.

Income Tax Deduction:

Allows consumers to deduct HDHP premiums from state income taxes, if they are not already deducting premiums from federal income taxes. This would apply to consumers who purchase an HDHP insurance plan as an individual, or through an employer.

Small Business Tax Credit:

Allows employers with 50 employees or less to take a tax credit of $250 per employee that enrolls in a HDHP through a Section 125 plan.

In August 2007 Governor Perdue unveiled the Health Insurance Partnership (HIP), a program that incentivizes small businesses to provide health insurance to employees under 300 percent of the poverty level by sharing the costs between the employee, employer and the state and federal government. The regulatory and tax proposals announced today compliment the HIP program by stretching state and federal dollars further, resulting in more insured Georgia citizens.

Governor Perdue also recognized the efforts of Senator Hill and Representative Channell to bring together the Georgia Hospital Association, Medical Association of Georgia, Georgia Health Underwriters Association and the Center for Health Transformation to put together the ideas that he endorsed today.