Consumer groups say legislation rolling through the Georgia General Assembly, intended to make health insurance more affordable, would also hand insurers an expensive gift: $146 million in tax breaks over the next five years.

That benefit, they say, dwarfs the five-year tax savings to employers ($64.8 million) and individuals ($6.7 million) projected under the bill.

The financial analysis, by the Georgia Budget and Policy Institute, a critic of special-interest tax breaks, has been trumpeted by opponents trying to head off House Bill 977, currently working through the Senate. The proposal, through tax incentives, promotes the sale of high-deductible health plans coupled with special savings accounts. It passed the House 122-39.

"It's an enormous tax break that will add to the hole in the budget" by subtracting millions in revenues, said Linda Lowe, a consumer health advocate.

The insurers' tax breaks could be even bigger if a large number of these policies are sold, Lowe said.

But the bill's supporters counter that passage would spark competition among health insurers, thus making coverage easier to buy for the 1.7 million Georgians currently uninsured. They say it's a misnomer to refer to the insurance companies' incentives as tax breaks.

"There's no money that goes to insurance companies," state Sen. Judson Hill (R-Marietta) said. "Insurers will pass [the savings] along to consumers" with lower premiums.

The bill would exempt insurers from paying taxes on premiums in the sale of the high-deductible savings account plans. Georgia health insurers typically pay a tax of at least 2.5 percent on premiums.

Small employers under the bill would get a $250 tax credit per enrolled worker, and individuals buying them would earn a tax deduction.

The Georgia Association of Health Plans said the tax changes will lead to lower insurance prices.

The state has one of the highest premium taxes in the country, said Georgia Insurance Commissioner John Oxendine, who supports the bill. Gov. Sonny Perdue also has backed the insurance legislation.

Many Republicans have touted the combination of high-deductible policies and health savings accounts (HSAs) as the answer to lowering costs and covering the uninsured —- the two monster problems in health care.

HSA proponents in Georgia, aided by Newt Gingrich's Center for Health Transformation, said the legislation's goal is to cover 500,000 of the state's uninsured. Critics call that figure unrealistic.

The savings accounts, similar to a 401(k) account, are funded with pretax dollars. The money in an HSA grows tax-free. And it's tax-free when spent on health care. To be eligible for an HSA, though, an individual must have a high-deductible health plan, which have lower premiums than other policies.

Skeptics say the accounts target generally healthy people who have financial resources to salt away money to pay for later medical expenses. High deductibles are more troublesome for lower-income people, the bill's opponents say.

AARP and the American Cancer Society are among opponents of the legislation. "If we are really going to do something about the uninsured . . . look at ways to expand PeachCare," the government insurance program for uninsured children, said Kathy Floyd, advocacy director for AARP.

Few uninsured Georgians would buy the policies, Lowe says. Much of the benefit, she said, would go to already insured consumers who then would switch to the high-deductible, HSA plans. In addition, insurers would pick up tax breaks not just for new policies, but also ones already sold, Lowe said.

Each uninsured resident costs the state about $3,850, including free medical care and lost productivity, Hill said, so Georgia will save with each person gaining coverage.

The Georgia Association of Health Underwriters, which represents insurance agents and brokers, says the bill may prevent the state's uninsured figure from growing still higher.

"Without some kind of relief, millions of Georgians face prospect of losing coverage altogether," says Michael Wardrip of the underwriters association.

HOW THEY WORK

COVERAGE: HSA policyholders pay medical costs up to the deductible at discounted rates negotiated by an insurer. After the deductible is met, the policy works like traditional insurance, paying a percentage of the medical costs up to an out-of-pocket spending limit. Some policies pay 100 percent after the deductible.

ACCOUNTS: HSA members can put tax-exempt money into a 401(k)-type account. Many employers contribute to the accounts. The policyholder can use the tax-free funds to pay medical costs, including some not typically covered by insurance, such as orthodontia and eyeglasses. Unspent money can be rolled over year after year —- there's no use-it-or-lose-it provision.

PRICE: A consumer buys health insurance, either individually or through an employer, with a deductible of at least $1,100 for an individual and $2,200 for a family. Usually high-deductible policies have lower premiums.

OTHER FEATURES: The accounts can be invested. HSA members can use a debit card or a check for medical spending. Any money used for nonmedical spending is subject to income tax and a 10 percent penalty. The accounts are portable, so they can be taken from one job to another. At age 65, an account holder can use HSA funds by paying income tax on withdrawals for nonmedical expenses.