Georgia’s new Gov. Nathan Deal has a big health care decision to make. It involves the concept of an insurance exchange, a requirement under...

Georgia’s new Gov. Nathan Deal has a big health care decision to make.

It involves the concept of an insurance exchange, a requirement under federal health care reform. The exchanges are envisioned as insurance marketplaces, where individuals and small businesses can shop for health coverage.

All states are considering the exchange concept – even the 28 states (including Georgia) that are fighting the reform law in the courts. There’s a reason why Republican-leaning state governments, which mostly oppose the law, are going through the process. If the Affordable Care Act survives legal and congressional challenges, each state will have to launch an exchange by 2014 or have the federal government do it.

With a $1 million planning grant, Georgia has set up an advisory group to study the exchange concept.

The theory behind exchanges is based on buying power. Small firms purchasing coverage on their own get socked with huge premium increases year after year. Individuals often get shut out of the health insurance game because of limited choices and steep prices.

But pooling small businesses and individuals together – and allowing consumers to compare a variety of health plans – would potentially improve today’s often harsh insurance marketplace.

Georgia will have options on the exchange issue. One is to do nothing and have the feds run an insurance marketplace here. Or the state could create an exchange to Georgia’s own liking, and there are numerous ways that could be done.

The state’s advisory group on exchanges met Friday to discuss other states’ progress.

“Every state is in a different place,’’ said Cindy Gillespie, a managing director of McKenna Long & Aldridge, which, with the University of Georgia, is working on an exchange feasibility study. “It’s developing differently all over the country.’’

Massachusetts and Utah already had established such marketplaces prior to the passage of the Affordable Care Act in early 2010. But those two states’ models are very different from each other. Massachusetts’ Connector has more government control, including a requirement for individuals to buy insurance. Utah runs more of a free-market system.

Gillespie said that among other states:

*Indiana, acting on an executive order from Gov. Mitch Daniels, will establish a base structure that could include health savings accounts as a featured element.

*Vermont is creating a model that is ‘’single-payer,’’ with government fully in control.

*Mississippi is moving toward establishing an exchange run entirely by private entities.

So Georgia has a lot of models to study, Gillespie said.

Insurance expert Bill Custer, part of a Georgia State University team working on the exchange study, says he expects the information-gathering phase to be completed by Feb. 1.

When it comes to moving ahead on the exchange issue, Georgia is doing roughly as well as many other states, Custer said. “We’re not lagging behind most states in the process,’’ he said. “There’s a great deal of work to do, however you’re going to do this.’’

The health reform law “creates a great deal of flexibility in how these things are set up,’’ Custer said.

Georgia could have separate exchanges for individuals and small businesses, or combine them. The state could operate separate  exchanges in different regions. Or Georgia could partner with other states in running one large exchange.

The state’s political leadership will soon face major decisions that could transform how insurance is sold for years to come.

“It’s really the heart and soul of how we’re reorganizing how we purchase health insurance,’’ said Cindy Zeldin, executive director of the consumer group Georgians for a Healthy Future. “Getting this right is critical.’’


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Andy Miller

Andy Miller is editor and CEO of Georgia Health News

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