Insure All Georgians

By Ronald E. Bachman and Nancy Desmond

If one of the major goals for Georgia is affordable health care coverage for all citizens, it is critical to achieve that goal within the framework of a “21st Century Intelligent Health System.”  

In a 21st Century Intelligent Health System, individuals would have accurate, timely, personalized knowledge about their health and treatment options, including information about cost and quality. They would be assured that their treatment is based on the most up-to-date, evidence-based medicine, and there would be a focus on preventive care and early intervention. The system would encourage and reward wise health-care purchasing decisions and offer more choices of higher quality at lower cost.  

A key test for any new health system is its ability to provide affordable access to quality care for the poorest and sickest among us. The elimination of health disparities is essential: No one can be left behind.  More than 450 people die every year in Georgia simply because they are uninsured, based on a report by the Institute of Medicine, which also found that uninsured adults have a 25 percent greater risk of dying than adults with insurance. Uninsured children are 70 percent more likely to go without care for common childhood conditions such as asthma, ear infections and sore throats.   

The uninsured are also 33 percent less likely to get a routine physical examination and 25 percent less likely to visit a doctor for an illness. Uninsured women are 36 percent less likely to get a pap smear and 60 percent less likely to get a mammogram; uninsured men are 40 percent less likely to get a prostate examination. 

The ripple effect of the uninsured is felt throughout society. Uninsured children are more likely to have impaired development and poor school performance. Uninsured adults have more absences from work and greater rates of disability.  A 2004 Kaiser Family Foundation national study found that the societal cost of the uninsured is $125 billion. Regardless of how one views the issue, the cost to society is high. Without insurance, the health, lives and financial security of families are at extreme risk. 

Eight out of 10 people who are uninsured are in working families. Even those covered through an employer are only a pink slip away from being uninsured, and more than 38 percent are worried or very worried about losing their insurance.   

One-hundred percent coverage is achievable, through market-based solutions, private and corporate efforts, tax incentives, direct public subsidies, strong community support and faith-based outreach programs. Personal responsibility, individual ownership, portability and health care consumerism are the hallmarks of such a system.  

Recent laws and regulations have created the foundation for transformation to this 21st Century Intelligent Health System. In 2002, the U.S. Treasury Department recognized Health Reimbursement Arrangements, sparking the consumerism movement, and in 2003 Congress approved Health Savings Accounts (HSAs). 

Small businesses and individuals are beginning to experience the benefits. Assurant Health reports that 43 percent of HSA applicants were previously uninsured and that 71 percent of those purchasing them paid premiums of $100 per month or less. And small businesses adopting HSAs have reported savings of up to 42 percent on their health care costs, according to the National Federation of Independent Businesses. 

History has proven that laws and regulations matter. Insurers can only operate and create affordable products within the legal and regulatory boundaries allowed.  The state needs to take several steps to facilitate the process: 

  • Eliminate existing state premium taxes on high-deductible health plans offered with HSAs.
  • Remove existing state law and regulatory conflicts to offering flexible and affordable HSAs.
  • Remove unnecessary mandates, outdated pricing restrictions and bureaucratic costs.
  • Approve state income-tax deductibility for individually paid high-deductible health plan premiums.
  • Expand the number of insurers offering HSAs in Georgia by removing financial and bureaucratic barriers to new market entrants.
  • Allow for cross-state purchasing of HSAs from health insurance carriers in good standing that are operating under laws and regulations of other states.
  • Pass high-risk insurance pool legislation to provide state and federally subsidized protection for those currently uninsurable.  
  • Support Medicaid waiver requests that create Medicaid Health Opportunity Accounts.
  • Provide for state HSA tax subsidies for those transitioning from Medicaid to private coverage.
  • Require hospitals receiving state funds to release information on death rates and complication rates, allowing them to apply fair risk adjustment to their data.

The private and public sectors both have a role in this transformation. Governor Sonny Perdue’s emphasis on lowering obesity and diabetes in Georgia is one example, and his work to bring personal responsibility and consumerism to the State Employee Health Plan and Georgia’s Medicaid program is to be applauded.  New state laws, however, will advance the picture of health. With a vision of what can be, the 2006 legislative session can begin to save hundreds of lives and billions of dollars annually. But Georgia must act now to succeed. 

Ronald E. Bachman is a Senior Fellow at the Georgia Public Policy Foundation and a Senior Fellow at the Center for Health Transformation, an organization founded by former U.S. House Speaker Newt Gingrich. Nancy Desmond is the President and CEO of the Center for Health Transformation. The Georgia Public Policy Foundation is an independent think tank that proposes practical, market-oriented approaches to public policy to improve the lives of Georgians. Nothing written here is to be construed as necessarily reflecting the views of the Georgia Public Policy Foundation or as an attempt to aid or hinder the passage of any bill before the U.S. Congress or the Georgia Legislature.

© Georgia Public Policy Foundation (January 13, 2006). Permission to reprint in whole or in part is hereby granted, provided the authors and their affiliations are cited.

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