A state advisory committee, in a report released Monday, has recommended that Georgia create an insurance exchange for small businesses, run by either a...

A state advisory committee, in a report released Monday, has recommended that Georgia create an insurance exchange for small businesses, run by either a private or quasi-governmental entity.

But the panel stopped short of backing a similar marketplace for individual coverage, which is called for under the 2010 federal health reform law.

The committee made it clear that it supports an exchange independent of what the reform law requires. The report also cited the uncertainty surrounding the legislation’s ultimate fate in the Supreme Court.

Gov. Nathan Deal, who opposes the law and supports Georgia’s participation in a multi-state legal effort to overturn it, nevertheless appointed the advisory committee to study ways to make health insurance more affordable in the state.

In its report, the committee said it sees value in small business marketplaces that ‘‘have the potential to provide greater choice for consumers, enhance free-market competition and provide a conduit through which small business owners can provide health coverage while maintaining a greater degree of budget stability.’’

The report also said there is a ‘‘critical need’’ to ensure that the state maintains its authority over the insurance market and does not cede that power to the federal government.

Committee member Cindy Zeldin,  of  the consumer group Georgians for a Healthy Future, expressed disappointment that the panel did not include a recommendation for an individual marketplace.

“It’s a big missed opportunity,’’ said Zeldin, who wrote a “Minority View’’ to the report. “We have very high numbers of uninsured. This could address that problem.

“This report is failing to take advantage of that opportunity for presumably political reasons,’’ she added.

About 20 percent of Georgia’s non-elderly residents have no health insurance.

Cost is a big reason why many small businesses don’t offer coverage to their workers.

The panel’s report noted that just 42 percent of Georgia firms with 25 or fewer employees offer insurance for their workers.

From November 2004 to January 2011, the cost of individual coverage for workers at small firms rose by more than 60 percent, and the cost of family policies rose by more than 40 percent, the report said.

The goal of insurance exchanges — envisioned as online shopping malls — is to boost the insurance-buying power of individual consumers and small businesses, where insurers would compete on quality and price.

Bill Custer, a health insurance expert at Georgia State University, said the committee members in the report recognize “a clear need to reform Georgia’s insurance market.’’

The report, he noted, also shows a preference that the authority over insurance remain with the state of Georgia and its insurance commissioner, and that the exchange should be mostly private market-driven rather than heavily regulated.

Custer said other states are either working to create an exchange for small firms and for individuals, or have ‘‘bowed out’’ of the process completely.

If the reform law is upheld and fully implemented, the federal government will step in and run exchanges in those states that don’t establish and operate their own.

The Georgia panel also created a subcommittee to devise plans on what to do if the health reform law is struck down or drastically curtailed.

In recommendations separate from the main report, the contingency subcommittee said Georgia should postpone any attempt to develop a state-based exchange until the reform law’s constitutionality and ultimate political fate have been sorted out.

But it also declared that Georgia insurance laws and regulations ‘‘need reforms to improve the private market safety net, increase access to coverage, improve the health of Georgians, make insurance more affordable, and lower the number of uninsured.’’

The subcommittee recommended that the General Assembly try to solve these problems by implementing a Georgia-specific alternative to the health reform law.

Here’s a Kaiser Health News article on how the federal government faces challenges in creating a federal exchange.

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Andy Miller

Andy Miller is editor and CEO of Georgia Health News

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