2012 Georgia Health Insurance Reform

1. 2012 Georgia Health Insurance Reform

2. State Health Insurance ReformsThe Need” State Insurance Reforms Will Be Needed if: PPACA is found unconstitutional, or PPACA is altered by Congressional defunding of Exchange subsidies, or States are given blanket waivers from PPACA by a Presidential Executive Order, or PPACA regulations are indefinitely delayed, or PPACA is repealed through the political process. The question was never “If..” or “Why Health Reform?”, but “Who?”, “How?”, and “What” to reform.

3. Governor Deal’s Health Insurance Reform Goals • More Affordable Insurance for Employers (especially small employer groups of fewer then 25) • Increased Access, Better Options & Affordable Coverage for Individuals (lower the number of uninsureds) • Improve Economic Viability for Creating and/or Expanding Small Business (healthy population, productive workforce, lower operating costs)

4. Basic Principles for Georgia’s Health Insurance Reforms • Free Markets • Personal Responsibility • Competition • Choice, Multiple Options • Transparency • Level Playing Fields

5. Georgia Insurance Laws Needed Reform • Key Indicators of Weakness in • Pre-PPACA Georgia: • 1.8 Million Uninsureds and Growing • Georgia has only 2.2M of 9.6M covered by Fully Insured Group (1.8M) and Individual (.4M) Insurance • Only 1 in 4 Georgian’s working for Small Companies (under 25 employees) are insured.

6. Three Simultaneous Health Insurance Reform Initiatives • Restructure the Insurance Market • Increase Competition, Transparency, Health Literacy, Access and Portability • Strengthen the Free-Market Safety Net • Keep policyholders from losing coverage • Make insurance more affordable • Individual Policies & Small Groups

7. Input to Georgia’s Health Insurance Reform Plan Committee Ideas Key Provider Stakeholder Issues Legislators Input National Free Market Reform Ideas Citizen Groups Ideas PPACA Other State Health Reforms Current Ga. Health Regs & Legislation Ga. 2008 HSA Legislation

8. Restructuring for a Creative Free Market: “Four Pillars” for Health Reform • Regional Health Insurance Coalition * Competition thru interstate reciprocity 2. Private Health Insurance Marketplace(s) * Transparency/Health Literacy • “Personal Responsibility” High Risk Pool (PRHRP) * Access to coverage for all • Group Conversion Policies * Portability and consistency of coverage and services

9. 1. Regional Health Insurance Coalition(Increases Competition) Single State Marketplace 7.1 Million Regional Marketplace 24 Million Expand on 2010 Legislation From “1-Way” Policy Approvals to a “Multi-State” Regional Coalition with Reciprocity

10. Regional Health Insurance Coalition 24.0M 2. Georgia Health Insurance Marketplace(s): GHIM (Improves Transparency, Health Literacy, & Efficiency of Private Market Distribution System) GHIM: Health Insurance Marketplace(s) Private Company Examples currently developing HIMs: Ceridian, Benefit Focus, Concentra, eBix, Benefit Mall, BCBS Georgia Population 9.6M Complete Consumer Information & Transparency of Services GHIM Potential Impact 1.2M The GHIM can increase Privately Insured Georgians from 2.2M to 3.2M Private Ins 1.0M Indiv.Ins. .3M Gov’t Ins .2 M Medicare Group Ins. .4M COBRA .1M C of C .1M Conv .1M Triage to Gov’t or Private Agent Medicaid Triage to Private Agent/Broker Other The GHIM can increase Publicly Insured Georgians from 2.1M to 2.3M Insurance Application Program Enrollment

11. 3. “Personal Responsibility” High Risk Pool(Voluntary Access for All Without an Individual Mandate) Insurance Applications Companies Rejecting Lives May not get back the same lives who are NOT uninsureable Competitive Private Insurance Market Private Carrier Underwriting Standards Set by Insurers Company A (Indiv & <10 life groups) Accepted Applications Company B (Indiv & <10 life groups) Accepted Applications Company C (Indiv & <10 life groups) Accepted Applications Rejected Apps Rejected Lives Reviewed by GUA to determine if Uninsurable Rejected Apps Rejected Apps Self-sustaining Public/Private entity Georgia Underwriting Authority (GUA) Personal Responsibility High Risk Pool Less Than 3% of Population

12. 4. Group Conversion Policies(Provides Portability of Coverage Delinked from Employment) Individual Conversion Policy Group Conversion Plan New Individual Services Consistent Group Services Plan Designs Provider Networks Wellness Disease Management Decision Support Tools Incentive Programs

13. Increasing Insured Lives In Georgia by 1.2 Million (Reducing Georgia’s Uninsured Population)

14. Strengthening the Free Market Safety Net COBRA Continuation of Coverage Conversion Policies Uninsureds

15. Strengthening the Free-Market Safety Net Level The Playing Field between Small & Larger Groups • Continuation of Coverage equal to COBRA for small groups under 20 lives 2. HSA eligible plan COBRA option for all fully insured group plans. • HSA eligible plan COBRA option for all Georgia residents under self-insured group plans. 4. Continuation of coverage for those losing their coverage above age 55 until they are eligible for other coverage (e.g. through another employer) or until eligible for Medicare.

16. Strengthening the Free-Market Safety Net 1. Offer Group Conversion Policies for fully insured plans after federal COBRA or Continuation of Coverage 2. Offer Group Conversion Policy before exhausting time standards for continuation or COBRA benefits. 3. Offer “Group Conversion Policy” with an HSA eligible plan option

17. Strengthening the Free Market Safety Net& Improving Access to Health Insurance Rescissions Uninsurables Dependent Children Pre-existing Conditions

18. Strengthening the Free Market Safety Net & Improving Access to Health Insurance Adopt ERISA Pre-X Conditions (Equalize Insured and Self-Insured) 1. Require Insured Group Pre-X to be the no more restrictive than ERISA for out-of-network benefits • Eliminate Pre-X requirements for Insured Group in-network benefits Dependent Child Coverage (Similar but Better than PPACA) • Allow tax dependents to remain under parent health plans until age 26 (eliminate fulltime student requirement).

19. Strengthening the Free Market Safety Net & Improving Access to Health Insurance Uninsurables (Georgia Unique Concept) 4. Eliminate the Georgia Assignment Pool and replace it with a “Personal Responsibility” High Risk Pool (PRHRP). 5. Offer PRHRP before exhausting time standards for continuation or COBRA benefits. Rescissions (Same as PPACA) 6. Allow policy rescissions only for fraud and intentional material misrepresentation.

20. Strengthening the Free Market Safety Net & Access to Charity Clinics Primary Care for Uninsureds There are over 100 clinics in Georgia who serve the uninsured. Free clinics provide $200 to $400 million dollars' worth of care annually in Georgia. The State Auditor estimates that 10-20% of all uninsured care (over 90,000 Georgians) occurred within free clinics in 2000.

21. Access to Free Clinics & Primary Care for Uninsured • Allow a Georgia Charity Care Network state tax credit fund (e.g. The Georgia Private School Tax Credit) of up to $2M per year (for 3 years) for planning, development and expansion of the Georgia Charitable Care Clinics. 2. Allow the Georgia Charity Care Clinics collaboration and use of Georgia’s Public Health Facilities

22. More Affordable Health Insurance (Individual & Small Group) Min. 50% OON Health Status BioMetrics List Billing Individual Premium Tax Deductible on Ga. Returns EPO’s (Equalize w/ staff HMOs) Reduced Premium Taxes (Equalize w/ Self-Ins) Section 125 Plans Health Reimbursement Only Rewards & Incentives Defined Contribution HSA Eligible Plans Expanded, Creative, Competitive Insurance Market

23. Create More Affordable Individual Policies Expand on Existing 2008 HSA Eligible Plan Laws 1. Allow Defined Contribution Plans (use “HRA Only) for tax advantaged employer funding of individual policies* • Allow Sec. 125 salary deductions for tax advantaged ee Defined Contribution funding of Indiv. policies • Allow List Billing of Individual policies • Allow Exclusive Provider Organizations (in-network only PPOs) 5. Allow state income tax deductibility of individual health premiums*

24. More Affordable Individual & Small Group Plans Expand on Existing 2008 HSA Eligible Plan Laws • Allow financial rewards for using health risk appraisals, health management, or disease management programs* • Allow 30% coinsurance differential limit for non-preferred providers (if least 50%) • Allow “Any Willing Providers” into networks 4. Reduce high state and other municipal premium taxes *

25. Create More Affordable Small Group Plans Expand on Existing 2008 HSA Eligible Plan Laws • Allow employers with fewer than 10 employees, a $250 tax credit per employee enrolled in HSA eligible plans* 2. Allow a graduated sales tax submittal offset for the first four business years for small businesses of fewer than 10 fulltime equivalent employees, if they provide Comprehensive Medical coverage to employees and pay at least 50% of the cost of employee coverage.

26. Healthcare is Good Business in Georgia

27. Economic Development (The Business and Impact of Healthcare) There are 174 GHA member hospitals and health systems – most of them tax-exempt nonprofits; 31 of them are for-profit. Healthy Population Investment Capital Purchasing Power By 2020, the economic activity of private practice physicians will increase to nearly 270,000 jobs, $17.8 billion in wages and more than $32 billion in total economic output. New Business Economic Development More Agents, Brokers Increased Hiring State and local governments will collect $2.8 B in revenue as a result of the economic activity of private practice physicians. More Providers Sound Hospitals

28. Insurance Reform,Access, Health, and Productivity Tying It All Together Better Health Means More Productive Workforce Insurance Means Better Access to Care Better Access to Care Means Better Treatments Better Treatments Means Better Health Health Insurance Reform Economic Development Improved Health

29. Summary of Recommendations for A Georgia Alternative Health Reform Plan • Unique “Georgia Solutions”, • Four Major Restructuring “Game Changing” Market-based Solutions, • More than 30+ Supporting Recommendations • Specific Detailed Insurance & Regulatory Improvements, and • Recommendations that Meet the Free Market Guiding Principles.

30. Building A Better Future for Georgia Increased Competition Affordable Insurance NO MAGIC BULLETS Improved Access to Care Personal Responsibility High Risk Pool Reformed Private Insurance Increase Access to Public Insurance Defined Contributions BUT A DARN GOOD START Expanded Free Clinics Small Group Products Improved Safety Net Individual Products

31. Supporting Organizations • Georgia Public Policy Foundation • Center for Health Transformation • Physicians for Patient Care • Georgia Tea Party Patriots • NFIB • MAG • Alliant Health • Georgia Charity Care Clinics Briefed & Input to Plan: GHA Gov Deal’s Staff GSMC Ross Mason Ga CoC Gerry Purcell Ga DOI GAHU Legislators: Mickey Channell Josh Clark Sharon Cooper Greg Goggins Judson Hill 2010 House Frosh