”HIGH COURT KILLS HEALTH REFORM LAW — NOW WHAT?”
In July 2012, that just might be the headline that throws the country into turmoil.
Everyone is wondering whether the 26-state challenge to the Patient Protection and Affordable Care Act will succeed. But a bigger question is: If it succeeds, then what?
If the court rules against the constitutionality of the health reform law, part or all of that law will immediately be null and void. Insurance markets will revert back to inadequate state laws that existed before the federal law was passed in 2010.
We know that under those laws, 1.8 million Georgians were uninsured, and fewer than 1 in 4 Georgians working in small businesses had coverage. Does Georgia want to go back to that situation? Or is it prepared to make needed changes to improve its insurance market and lower the number of uninsured?
In preparation for a possible voiding of the federal law, the Georgia Public Policy Foundation facilitated a multi-stakeholder, bipartisan discussion group that resulted in a detailed plan for comprehensive health insurance reform for Georgia. The plan is built on six basic principles: (1) Free Markets (2) Personal Responsibility (3) Competition (4) Choice (5) Transparency (6) a Level Playing Field for All. Recommendations include three major areas of reform to be pursued simultaneously:
First, Georgia must restructure the insurance market to increase competition, transparency, access and portability. Four major restructuring ideas emerged. One, Georgia should show leadership in creating a regional marketplace with consistent insurance laws and interstate reciprocity of policy approvals. A greater Southeastern marketplace — 24 million to 50 million people — will bring Georgia lower-cost products, more responsive wellness incentive programs and increased choices through competition. Two, Georgia should encourage the development of nascent private health insurance information marketplaces. These entities will provide transparency of costs, quality and consumer health literacy to both private and public insurance. Three, Georgia needs a “Personal Responsibility High Risk Pool, which would stabilize the small-group and individual markets, provide affordable coverage to those otherwise locked out of coverage, and increase access to insurance for all. Four, Georgia laws should allow for a group conversion policy for those who lose their jobs and coverage. A group conversion would maintain consistency with other group policies and add a valuable aspect of portability.
Second, Georgia needs new laws to strengthen the private-market safety net. Needed changes include: equalizing pre-existing conditions between self-insured and fully insured policies; expanding coverage to tax-dependent children until age 26; allowing policy rescissions only for fraud and material misrepresentation; and providing lower-cost options for those selecting COBRA and continuation of coverage. In addition, the state can provide planning, expansion grants and HIT support for Georgia’s Charity Care Network.
Third, in addition to the above, the “Comprehensive Health Insurance Reform for Georgia’’ includes more than 30 specific recommendations to lower the cost of insurance for individuals and small businesses. Existing laws add unnecessary costs, limit incentives, and unfairly tax individual policies at higher levels than group plans.
In summary, the Georgia Public Policy Foundation has produced a broadly accepted “Georgia-centric” health insurance reform roadmap for the 2012 Georgia General Assembly.
This is a chance for states to say “Yes” to a positive agenda even as they wait for the Supreme Court to say “No” to federal encroachment on their health policies. Passing state reforms now will prevent the chaos that could come from the very court ruling that Georgia is hoping for. These are real solutions that will show that states are prepared and positioned to help their own citizens.
The Georgia solutions include ideas that could be useful to other states. Other states will have their own ideas and may need different reforms for their own situations. That is how it should work if the constitutional challenge to the federal law is upheld and states truly believe in their rights and responsibilities under the 10th Amendment.
Ronald E. Bachman is president and CEO of Healthcare Visions, a firm dedicated to advancing ideas and policy initiatives that are transforming the U.S. health care market. Bachman is also a Senior Fellow of the Center for Health Transformation (CHT), the Georgia Public Policy Foundation (GPPF), the National Center for Policy Analysis (NCPA), and at the Wye River Group on Health. Mr. Bachman is an actuary with extensive experience in health care strategy for payers, providers and employers, and is a retired partner from PricewaterhouseCoopers.