On Dec. 15, the advisory committee appointed by Gov. Nathan Deal to make recommendations about whether Georgia should establish a health insurance exchange released its final report. The health insurance exchange concept — essentially a mechanism akin to a health insurance shopping mall designed to better facilitate consumer choice and value — has been a hot topic across the country since American Health Benefit Exchanges (AHBEs) for individual consumers were authorized through the Affordable Care Act (ACA) of 2010.
Despite widespread, bipartisan public support for the exchange idea, and federal dollars and resources on the table to implement one in Georgia, the committee report did not explicitly recommend the establishment of an American Health Benefits Exchange for Georgia health care consumers. It missed an opportunity to address our state’s stubbornly high number of uninsured with a policy solution tailored for Georgia individuals seeking insurance. (The committee report did recommend creating an exchange for small businesses.)
The idea behind an exchange for individuals is to reform the health insurance marketplace to provide a way for consumers who don’t have access to a health plan at work to obtain affordable health insurance. For Georgians without the option of a workplace plan (nearly half of us), navigating the health insurance system all too often feels like navigating a minefield.
Under the current system in the state, it’s difficult to know what is covered and what is not. Pre-existing conditions are grounds for coverage denial. There are no economies of scale in purchasing. There’s no employer contribution. And the income you use to purchase health insurance is taxed. Consumers report great difficulty finding and keeping affordable health insurance if it isn’t offered through the workplace.
A well-designed exchange can replicate the best of what works for employment-based health insurance: It can pool risk, leverage volume, and administer tax credits that can help level the playing field with workplace health insurance plans. Combined with other reforms in the ACA that largely take effect in 2014, such as the ban on denying coverage for pre-existing conditions, an exchange could improve Georgia’s health insurance marketplace for consumers.
The 2012 Legislative Session is an ideal time to authorize a basic structure for a health insurance exchange that is sufficiently nimble to be compatible with the American Health Benefits Exchanges. Under the ACA, Georgia citizens will be eligible for federal tax credits to help purchase health insurance, but these tax credits can only be applied to plans sold through the exchange. In fact, more than 900,000 Georgians will qualify for tax credits in 2014 to offset some of the cost of purchasing a private health insurance product. This will help drive more customers into the insurance marketplace, and we have an opportunity to help facilitate the sale of these insurance plans by establishing the exchange for individual consumers.
If Georgia moves forward in 2012, this will give our state’s policymakers, officials and stakeholders time to make policy choices in 2012 and 2013 regarding the details of the exchange and to make modifications as appropriate along the way.
One bit of good news is that if Georgia policymakers don’t make progress in setting up an exchange for uninsured individuals, Georgia consumers will be provided an alternative: They will be able to shop on an exchange that will be built out at the federal level by the U.S. Department of Health and Human Services.
But while this federal exchange, if it needs to be created, will still allow consumers to apply their tax credits to health plans that feature the new consumer protections that take effect in 2014, it may not have the capacity to be as responsive to the needs of Georgians, particularly those who may be eligible for coverage through Medicaid or PeachCare for Kids or who may require navigation through the enrollment process.
The federal exchange is a solid fallback option for consumers. But there is still time for our policymakers to create a state exchange — one that is customized for and responsive to the needs of individual Georgia consumers. This effort deserves the attention of the General Assembly in January.
Cindy Zeldin is the executive director of Georgians for a Healthy Future, a nonprofit consumer health advocacy organization. She also served on the Governor’s Health Insurance Exchange Advisory Committee.