In July 2012, the headline that throws the country into turmoil could just be, “Supreme Court Rules Against Health Reform; Now What?” If the 26-state lawsuit succeeds against the federal Patient Protection and Affordable Care Act, then what?
Part or all of the federal law will immediately be null and void. Insurance laws will revert to the inadequate state laws that existed before. Even before the new law, there was bipartisan agreement that health insurance needed reforms. In Georgia, those laws created 1.8 million uninsured Georgians; fewer than one in 4 Georgians working in small businesses were insured.
The battle cry is “repeal and replace” from federal politicians, but if the major responsibility for reform goes back to the states, are state officials prepared to implement needed legal and regulatory changes to improve the insurance market and lower the numbers of the uninsured?
To prepare for that scenario, the Georgia Public Policy Foundation (www.georgiapolicy.org) facilitated a multi-stakeholder, bipartisan, six-month discussion. The result is a detailed plan for comprehensive health insurance reform for Georgia based on free markets, personal responsibility, competition, choice, transparency and a level playing field for all. If legislators embrace these solutions, Georgia could become a national model for real health care reform that puts the individual, not government, in control.
The resulting recommendations include three major areas of reform to be pursued simultaneously: restructuring the insurance market to increase competition, transparency, access and portability; strengthening the free-market safety net to keep existing policyholders from losing coverage, and making health insurance more affordable for individuals and small businesses.
Restructuring the insurance Market
There are four crucial “pillars” of reform to restructure the insurance market. The state must facilitate competition by enabling a multistate regional insurance market with interstate reciprocity. A larger 24 million- to 50 million-person Southeast marketplace will bring Georgia lower cost products, more responsive wellness incentive programs and increased choices through competition. The state must promote transparency and consumer health literacy through the development of private health insurance information marketplaces. Meanwhile, a “Personal Responsibility” High Risk Pool will ensure affordable access to the market and a group conversion option will ensure portability and consistency across group insurance policies.
Strengthening the Free-Market Safety Net
There are several opportunities here. The state should equalize standards for pre-existing conditions for Georgians, whether insured or self-insured. It should allow parents to maintain coverage for children up to age 26 who are their tax dependents. Plans should be rescinded only for fraud and intentional misrepresentation. For the uninsured, the state should support and expand the Georgia Charity Care Network. COBRA options should be revised to include a lower-cost, HSA-eligible plan and the same continuation-of-coverage options for small group and larger group plans.
Making Heath Insurance More Affordable
Comprehensive Health Insurance Reform for Georgia would provide more than 30 specific opportunities to lower the cost of insurance for individuals and small businesses. Current laws add unnecessary costs, limit incentives and unfairly tax individual policies at higher levels than group plans.
The Foundation has helped draft a broadly accepted, Georgia-centric health insurance reform roadmap for the 2012 Georgia General Assembly. It provides a chance for the state to say “Yes” now to a positive agenda while awaiting the Supreme Court’s “No” to unnecessary federal intrusions on states.
Other states will have their own ideas and may need different reforms for their unique situations. That is what the outcome should be if the constitutional challenge to the federal health care law is upheld and states truly embrace the 10th Amendment. Ultimately, the ideas for Georgia are practical, free-market solutions to show our policy-makers are prepared to lead and positioned to help their own citizens. And in doing so, Georgia can lead the nation with ideas that could prove useful as more states confront their health insurance challenges.
(Ronald E. Bachman is a Senior Fellow at the Georgia Public Policy Foundation, the National Center for Policy Analysis and the Center for Health Transformation. He served on the Georgia Health Insurance Exchange Advisory Committee.)