Georgia Launches Insurance Plan to Cover the Working Uninsured

Published November 1, 2007

On August 7, Georgia Gov. Sonny Perdue (R) announced preliminary details of the Health Insurance Partnership for Georgia, a new health care initiative for working, uninsured Georgians.

According to Perdue, for small business owners and employees the Partnership would provide accessible, affordable health care options and promote personal ownership and responsibility for health care decisions.

The health care options would vary depending on the premium level the employee chooses to pay. They include a Benchmark benefit plan, comparable to what is offered to state employees; a Basic benefit package, which would meet the requirements of a 2005 law; and a High Deductible Health Plan with a Health Savings Account (HSA).

Soaring Costs

Under the Partnership, employers would be required to offer at least the Benchmark plan to employees if they choose to participate.

“Small business owners have faced soaring health care costs, and many have been forced to drop health insurance,” Perdue said in a press statement. “This plan allows small employers to join a private insurance plan and offer employees coverage options similar to the health care options given to workers at larger employers.”

Major Investment

Under Perdue’s proposal, employees and employers would share costs with the state and federal governments. Perdue said the state’s taxpayers would invest up to $20 million to make the program available by July 1, 2008.

“A $20 million state investment, when combined with federal funds and contributions from employee and employer premiums, would result in more than $182 million in insurance coverage for more than 30,000 Georgians,” Perdue said in the news release.

Sole proprietors or those working for small businesses of up to 50 employees would be eligible for the plan. Eligible employees must work at least 20 hours a week and earn less than 300 percent of the Federal Poverty Level (FPL), or about $62,000 a year for a family of four or $30,600 a year for a single adult.

“Employees that earn more than the income cap are still eligible for coverage with the premiums split between the employer and employee,” said the news release.

‘Meaningful Access’

Employees who are already covered at work, insured through a spouse’s employer, or eligible for Medicaid or TRICARE–the state health care plan for military personnel and their dependents–won’t qualify for the Partnership. All participants must be legal residents of Georgia.

“More than 1.7 million Georgians lack health insurance. Approximately 380,000 of Georgia’s uninsured work for employers with less than 50 employees, and earn less than 300 percent of the FPL,” the press statement noted.

Georgia Chamber of Commerce President George Israel praised the idea.

“Proposals that offer small businesses a voluntary, incentive-oriented solution, while emphasizing personal responsibility and the free market, are most likely to succeed in providing meaningful access for employees to health insurance opportunities,” Israel said.

Good Points

“This is an important new idea in the variety of reform options,” said Greg Scandlen, president of Consumers for Health Care Choices, a free-market group based in Maryland. “Rather than using the money to expand Medicaid and SCHIP, the governor would use it to help low-income people stay in their employer’s health plan. This avoids the stigma for low-income workers of being treated differently than their co-workers and being put on ‘welfare medicine.'”

Diana Ernst, a health care policy fellow at the Pacific Research Institute in San Francisco, said, “Two admirable aspects are that it is voluntary for employers, and it includes a high-deductible health plan paired with a Health Savings Account option for employees.”

Bad Points

But it’s not all good news.

“The major problem with the program is that it’s not entirely free-market, [and] it may depend on unreliable funding and eventually, higher taxes for state residents,” Ernst said. “It is a good idea to help small employers who struggle with the cost of health insurance, but the best way to do it is to empower individuals, by helping them break away from their dependence on employer-sponsored care.”

Scandlen agrees.

“There remain questions of whether 300 percent of poverty is the right cut-off for eligibility and whether it is a good idea to keep people dependent on their employer for accessing coverage,” Scandlen said.

Dr. Sanjit Bagchi ([email protected]) writes from India.