Incremental Steps to Healthcare Reform

Perdue is taking the tax break approach.

Gov. Sonny Perdue said Wednesday he is backing legislation that will give Georgians a tax break for the premiums they pay on high-deductible health insurance plans.

The proposal also would eliminate a premium tax paid on such policies and give small businesses tax credits for enrolling employees in high-deductible plans. And it would allow consumers who buy such plans to get rebates from insurers for “behavior modifications,” such as quitting smoking or lowering their blood pressure.

High-deductible health plans generally offer coverage with annual deductions of $1,000 to $5,000 for individuals and $2,000 to $10,000 for families. They typically are coupled with health-savings accounts, which allow people to sock money away tax-free to cover health care costs.

16 comments

  1. Goldwater Conservative says:

    They could just require premiums to not exceed a certain amount. They could also outlawing insurers from denying coverage for pre-existing conditions or/and a lapse in coverage. But no…they “cut taxes.” Great another thing for these fiscal-“conservatives” to run for re-election on, while literally doing nothing. It is a sad time in this country when people have to worry about the cost of being healthy.

  2. GAWire says:

    At least he’s trying and in so doing actually using a strategy that would work. President Hussein Obama would rather socialize medicine. I just can’t wait for that catastrophe – for those of us that do business in that industry will have enough work to last us for generations!

  3. LoyaltyIsMyHonor says:

    “…Obama would rather socialize medicine. I just can’t wait for that catastrophe…”

    I know, because every other industrialized country is experiencing a healthcare crisis worse than our’s. And before you point to Canada as a catastorphe (which it isn’t) have you tried your local HMO lately? Or how bout the individual market.

    We revisit this every year…a bandage here..a bandage there…..Good grief.

  4. Goldwater Conservative says:

    None of the presidential candidates advocate a social healthcare system. A national healthcare system can still be private, and…while Senator Clinton advocated something rather similar to social medicine back in the 90’s…her ideas, as well as Obama’s, do not involve the government footing the bill and becoming an insurance company.

  5. Jason Pye says:

    [Clinton’s] ideas, as well as Obama’s, do not involve the government footing the bill and becoming an insurance company.

    Unless your not counting the subsidies that their plans include.

  6. eehrhart says:

    Jace,

    Just to clarify, this originally started with Rep Channel and Sen Hill.

    The Gov is a late addition to the game which is fine because it is a good idea and he is welcome on the team. Unlike the govs office we do not care whose idea it is, only whether or not it is a good one for Georgia.

    Remember the Gov was pushing an entitlement program for his plan on this issue this summer. As a matter of fact that same entitlement has a 17 million dollar recomendation in the govs budget for 2009. Something we need to redirect if you catch my point.

    My preference would be to return it to taxpayers and not spend it.

  7. jsm says:

    Since when was it government’s place to ensure I get health care? I much prefer a tax break that incentivizes a good choice to a government-controlled, inefficient bureaucracy making my health choices.

  8. Paul Shuford says:

    The problem with health insurance as it currently exists in this country is that the people that pay for the health insurance and the people that use the health insurance are not the same people. If you had the individuals that use the health insurance – not the businesses that they work for – paying for health insurance, and getting the same kind of tax breaks as businesses get for providing health insurance to their employees, then rates would go down, and there would be a lot more choice in the insurance industry.

    As it stands, the majority of the health insurance industry is trying to please those that are paying the bills – the businesses who provide health insurance for their employees – and aren’t as concerned about the people who are actually consuming the product. They provide what the businesses want – low cost insurance coverage that is “good enough” for their employees, but doesn’t give them a lot of choice, nor is it tailored to their individual needs or situation. This is why HMO’s are so prevalent, because they’re a cheap solution for buying insurance en-masse for employees. If individuals, instead of businesses, were buying most of the health insurance, HMO’s would be an endangered species.

    The future of individual insurance policies is a high-deductible insurance policy coupled with a health savings account – with discounts negotiated by the insurance company with your doctors. You pay for your doctor’s bills with pre-tax money, at a discounted rate, until you reach your deductible, then the insurance company takes over. In many cases, this is combined with a rider that covers the deductible in case of castastrophic illness (heart attack, stroke, etc.) or catastrophic injury (car wreck, falls, etc.), that way you’re not stuck with a huge deductible to pay after you’ve suffered an emergency. Tax breaks on this kind of coverage would be a very good thing, because it would encourage more individuals to pay for their own health insurance, which would reduce insurance rates and give people more choice overall.

    Full disclosure – I am a licensed insurance agent in the State of Georgia.

  9. Ms_midtown says:

    Paul Shuford correct me if I’m wrong
    A high deductible – HSA is about $200-500 a month. Which is $2500-10000 a year.
    A tax break-credit would reduce the net cost
    about what ? 10% a year. Better than nothing.

    I have also noticed the insurance companies like to funnel people into limited investment choices and costly fee HSA’s. Can the state make more consumer helpful changes here or is it only federal regulated?

    I will soon be insuring myself with a high deduct-HSA.

  10. Inside_Man says:

    Jace,

    That program would be last summer’s “Health Insurance Partnership,” which would allow for up to 30,000 uninsured Georgians to gain insurance. That’s right, a whopping 1.7% of our state’s uninsured can be covered for the low, low cost of roughly $200 million dollars in state and federal funds.

  11. Paul Shuford says:

    Ms_midtown,

    It’s about $200-$500 for a family of 4, usually. The age of the people involved, and their health choices are the biggest factors. A 35 year old guy in good health who doesn’t smoke is usually looking at around $120.

    As for the insurance companies funnelling people into limited investment choices and costly fee HSA’s, I think that depends on the insurance company. The one that I work for uses a no-fee HSA, and you can choose to invest in a slate of 11 mutual funds if you have enough in the account. You’d pay more and get less investment choices if you opened up an HSA at a bank.

  12. eehrhart says:

    Thanks Inside man I just got home and was going to answer Jace.

    That 200 million was just the first year and like all such programs it would grow exponentially.

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