State lawmakers took their first official step Monday toward complying with federal health care reform by designing an insurance marketplace that will change the way many Georgians get health coverage.
A House subcommittee unanimously approved a bill (HB 476) that would create the Georgia Health Exchange Authority, an arm of state government that would run a state-based insurance exchange -- a central part of the nation's new health care law.
The exchange would serve as a host for private companies who want to sell insurance and who are willing to follow guidelines drawn up by both the state and the federal government. Consumers who don't get coverage at work will probably shop on the exchange through a website. They will submit information about their income and their family, and then they will be presented with options for coverage from private companies. The exchange would also determine whether someone qualifies for Medicaid, the government plan to cover low-income Americans.
"To anyone who doesn't get health insurance through their employer, this is going to be the new face of health insurance -- this will be their starting point," said Cindy Zeldin, director of Georgians for a Healthy Future, a non-profit health policy organization that advocated for federal health care reform.
Small business owners could go to a separate exchange to shop for a plan to cover their employees. Along with presenting choices for coverage, an online interface would let consumers know whether they qualify for a federal tax credit to help pay for their insurance.
The exchange would open for business in 2014, the year that most Americans will be required by law to have health coverage.
Georgia is moving forward with plans for a state-run exchange while it is also vigorously contesting the constitutionality of the Patient Protection and Affordable Care Act. State legislators know that if the law stands and Georgia doesn't set up its own health insurance exchange, then the federal government would design and run Georgia's marketplace.
"We would much rather see the governor and the legislators here decide what is best for Georgia versus taking a one size fits all exchange from the (U.S.) Department of Health and Human Services," said Kyle M. Jackson, Georgia director of the National Federation of Independent Business.
States have latitude when it comes to setting up an exchange. While some stakeholders will push for an exchange that takes a free-market approach, others will push for more substantial consumer protections and guides to help consumers make choices.
"If it's done well you can really focus the consumer's attention on the most important elements of the health insurance policy, which is very different from where we are today," Zeldin said.
The insurance industry, which supports the bill, wants as much freedom as possible to operate.
"The more you box us in and limit us and do not allow us to innovate I think at the end of the day the Georgia consumer loses," said Graham Thompson, a lobbyist for Georgia insurance companies.
The bill does not make any policy decisions about a Georgia exchange. Instead, it calls for the creation of an authority that would be governed by a nine-member board of directors appointed by the governor. The bill would also establish an advisory committee to pull together a slate of detailed recommendations for the exchange. The board will use those recommendations to craft a proposal for legislation the Georgia General Assembly would take up when it convenes next year.
The bill, which is scheduled to be considered by the House Insurance committee Tuesday, would not allow board members to work for insurers or health care providers. However, those with a direct stake could serve on the advisory committee.
Some industry representatives questioned the conflict of interest provision, but those working on the legislation said consumer advocates, hospitals, doctors, insurance companies and brokers will all have a seat at the table.
"The advisory committee will have people who know the industry well and will work with the board to deliver a report," said Ryan Teague, an attorney in Gov. Nathan Deal's office.
The legislation charges the advisory committee to craft a plan that will help extend quality coverage, build competition in the marketplace and make Georgia "small business friendly." The bill also instructs the committee to support the ability of providers to stay in business and find ways to promote customer service and the use of brokers.
The General Assembly will have to approve a detailed plan for its exchange next year if it is going to meet federal deadlines. While the exchange would not open for business until 2014, states must have their systems ready to go by 2013.
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