Georgia faces 2012 deadlines for exchanges

The Georgia Legislature apparently has one more shot to pass a bill setting up a health insurance exchange.

U.S. Health and Human Services Secretary Kathleen Sebelius said Tuesday that the federal government will have a deadline sometime in 2012 for states to make sufficient progress on insurance exchanges as required by health reform.

If Georgia or other states fail to make progress by that yet-to-be-determined deadline, the federal government would step in to run an exchange in that state. The health exchanges, or insurance marketplaces, are required to be running in January 2014, as national health reform is fully implemented.

“The states really have the decision-making authority’’ to shape their own exchanges, Sebelius said at an Atlanta Press Club meeting.

Many states are having legislative discussions on the exchanges now, she added.

Under insurance exchanges, individuals and small businesses would be able to shop for more affordable coverage with increased buying power, by joining a larger pool of purchasers.

Health reform is being challenged in the courts by more than 25 states, including Georgia. Gov. Nathan Deal, Attorney General Sam Olens and Insurance Commissioner Ralph Hudgens all have stated strong opposition to health reform.

During the recent General Assembly session, though, a bill to set up the governance of exchanges in Georgia received backing from the Republican leadership. But fierce Tea Party opposition over the bill’s connection to health reform led to its demise.

Deal said he would set up an advisory committee to review Georgia’s exchange options. After House Bill 476 was pulled, Deal’s office issued a statement: “The governor understands Georgians’ suspicions about any legislation associated with Obamacare.’’

The statement also said that if Georgia is to have an exchange, Deal wants to make sure it’s run by Georgians, not ‘’Washington bureaucrats.’’

Later, the Legislature passed a bill allowing Georgia to join an interstate compact on health care, in defiance of the new federal reform law.

A spokesman for Deal, Brian Robinson, said this week that in order to enact or create an exchange, the Georgia Legislature must pass legislation.

So it appears the next legislative session, in early 2012, would be the last one that can approve an exchange bill before the federal government would take over implementation in Georgia.

Karen Minyard, executive director of the Georgia Health Policy Center, said the state has many options to consider in setting up an exchange.

But she said the exchange design work can be hammered out by the advisory committee before the Legislature convenes again.

“I think Georgia is OK,’’ Minyard said, citing the recent work done by an existing Georgia advisory group.

“Should Georgia decide to implement a health insurance exchange, there’s time to do what needs to be done, ’’ she said.

At least three states have passed laws on health insurance exchanges: California, West Virginia and Maryland. But others, including Florida, have rejected federal money for insurance exchange planning.

Massachusetts and Utah had established such marketplaces even before 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 for small employers.

Sebelius, in her general remarks to the Atlanta Press Club, said steps must be taken to contain health care costs. “Medicare spending is expected to grow 91 percent over the next decade,’’ she said.

A central answer to controlling spending, she said, is to improve the quality of medical care. Sebelius cited successful efforts to cut hospital readmissions in Colorado and a hospital patient safety checklist in Michigan as examples. The latter project, she said, is credited with saving 1,500 lives and cutting costs by $200 million.

The administration has joined a new public-private partnership to reduce preventable injuries in hospitals and rates of readmissions. In addition, the Affordable Care Act will allow physician-hospital organizations to share in future savings for quality care.

Sebelius told the Press Club audience that the recently announced Republican plan to privatize Medicare would lead to a beneficiary paying $6,800 more out of pocket in 10 years than that person would pay today.

GOP leaders, though, say that Medicare would work better as a privatized voucher system in which seniors would make their own decisions about care. The government under the GOP proposal would subsidize seniors in private insurance plans. The changes would not affect people currently 55 and older.

Without such changes, Medicare won’t be financially sustainable as the population ages and health care costs continue to escalate, Republican leaders say.