RE: Incremental Steps to Healthcare Reform

Last year I gave State Sen. Judson Hill a lot of flack for trying to bring RomneyCare to Georgia, via SB 28. This year he is proposing legislation (SB 383, which not online yet) on the health insurance front that would help Georgians without complying to with mandates that ultimately don’t work and burden taxpayers with government subsidies:

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.

Advocates of the bill claims that 500,000 Georgians could get coverage with these types of tax incentives. Some dispute that figure, like the always anti-market Georgia Watch:

Allison Wall, executive director of the consumer group Georgia Watch, called it a “pipe dream” to say that 500,000 Georgians would gain insurance through the bill.

“Are middle-income people going to be able to save for anything, much less a health savings account?” she asked. “If you’re struggling to pay your mortgage, or struggling to stay out of bankruptcy or to pay the light bill, is this going to be attractive to you?”

To be fair Insurance Commissioner John Oxendine also disputes the figure.

The Georgia Public Policy Foundation puts the number of uninsured individuals at 1.7 million, of that number 510,000 do not need financial assistance to get insurance coverage. That means that these individuals can afford to buy coverage but don’t or they could afford to buy coverage by making minor lifestyle changes, perhaps cutting back on eating out or recreational activities.

Contrary to all the alarmist rhetoric the so-called crisis of the uninsured is made out to be much more that it really is. Of the 1.7 million uninsured, 595,000 need some form of financial assistance to get insurance. Another 340,000 are eligible for government programs (Medicare, Medicaid or PeachCare). As mentioned above, 510,000 do not need assistance and can afford health insurance. The reality is that there are only 255,000 Georgians who are truly incapable of being insured.

It certainly seems that Sen. Hill’s legislation is a step in the right direction to getting more individuals covered without coercion from government.

18 comments

  1. LoyaltyIsMyHonor says:

    I think those who are pushing these ideas, ie Newt’s group, should have chosen a more credible Senator than Judson Hill to sponsor these proposals. He’s not well-liked by staff or Senators within his party.

  2. John Konop says:

    Anyone who has kids knows the health care system is broken! You can put your head in the sand and hope the problem goes away or fix it.

    If you do have insurance it is mortal combat to get the insurance company to pay.

  3. John Konop says:

    Jason

    Until people like you understand that when you did not have insurance your risk of major expenses was put on tax payers and people who do have coverage, this problem will never be solved.

  4. BubbaRich says:

    Your numbers don’t add up. You rule out a million people who need government assistance to get health insurance, then you say “The reality is that there are only 255,000 Georgians who are truly incapable of being insured.”

    That doesn’t make any sense. You skipped a million people who can’t get private health insurance, or at least 600,000 who can’t. If that million can get insurance with financial help, then the measly 255,000 Georgians you mention can also get insurance with financial help.

  5. Jason Pye says:

    Read the link to the GPPF article.

    What I wrote was 510,000 do not need any type of support and could afford insurance. 595,000 need some form of financial assistance. 340,000 are eligible for government programs, but have not enrolled. 255,000 are truly uninsurable.

  6. BubbaRich says:

    Jason:

    I read the GPPF page, now. It does not explain it any better than you did. They do not define uninsurable, except that these people cannot be helped even with financial assistance or government insurance programs. They do not explain why. They mention that they don’t want the perfect to delay the good solution, so they’re ignoring that quarter-million people for now.

    I wonder a little about market powers being behind this push, even though I don’t know much about the GPPF. I’m just curious why this quarter-million people can’t have medical insurance from a government program or with financial assistance.

  7. Jason Pye says:

    I can’t speak for the GPPF. I would suggest e-mailing the author of the article for an explanation.

    I would assume that those are the individuals who cannot be insured in the private sector because of risk.

  8. Paul Shuford says:

    Again, this problem will never be solved until people start paying for their own insurance, instead of their employers paying for their insurance. People try to please who pays the bills, and for most insurance companies, that’s the businesses that pay them, not the insured who use their services. When your employer pays for your insurance, you are just a cost to the insurance company, nothing more.

    I’ve always had individual insurance policies, as have most of the members of my family, and it’s never been a problem getting them to pay. It’s not surprising that it’s difficult to get someone to give you good customer service when you don’t have the option of picking up the phone and changing to someone else for those services. As long as the disconnect exists between who pays for insurance in this country and who uses the insurance services, then there will always be poor customer service for those that aren’t in the position to change their insurance services based on bad experiences.

    That’s the problem, and the solution is very simple. The solution IS NOT socialized/single-payer/universal healthcare, it’s a continuation of the same problem – no choice in insurance coverage leading to poor customer service, this is exactly what is happening in the insurance industry and in every industry where people have little to no choice in where they get a good or service (why do you think Comcast’s customer service is so bad?).

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

  9. Paul Shuford says:

    A note about the “uninsurable” – insurance companies are coming out, in the first few months of this year, with individual insurance policy products that will cover those who have previously been uninsurable because of risk, such as diabetics. The policies limit somewhat the amount of coverage given under the individual policies, and are more expensive than insurance policies for healthy individuals, but there will be policies available for those who were unable to be covered by individual insurance policies previously, due to risk.

  10. Doug Deal says:

    Paul,

    I am not involved in the insurance business, so I am curious as to what one who is would think of a plan such as follows:

    1. Encourage employers to not directly pay for health benefits, but instead give vouchers that may only be spent on purchasing health insurance. A person with a voucher can spend more for better coverage.

    2. Give tax payers full deductibility on every dollar spent on non cosmetic health care, including insurance, routine visits, surgery, prescribed medication and tests.

    3. Have the government abandon Medicare/Medicaid) and replace it with a voucher system just like described in 1.

    4. Have states force the insurance companies that they regulate to assign risk based on classes that exclude pre-existing conditions. I.e. ZIP code 45011 would be a valid class, or 20-40 year old males, or whatever, but “people with diabetis” would not be.

    5. Allow insurance companies to have a sliding payout rate on benefits to prevent people from just getting insurance when they get sick. (25 percent the first year, 50% the second, 75% the third, full coverage the fourth and after). Make that coverage period portable from company to company.

    6. Require all doctors to post “cash prices” for all services that they offer, as well as fees for tests before a patient undergoes any non emergency procedure.

    7. Treat insurance like insurance and not like a routine maintenance plan.

    Although not all of these points are what I would want in an iDeal world, I think they could address many of the issues that plague the current system. It may not be libertarian to force insurance companies to cover people who have pre-existing conditions, but no plan would work that doesn’t address the issue. This one at least strikes a compromise so that people will be encouraged to buy their own insurance before tragedy strikes.

    Also, it decouples insurance from employment, but still allows employers to offer benefits. The consumer of health services would then again be in control of which they do business with, instead of a bean counter at their place of work.

    Finally, it would result in the healthiest paying a little bit more, based on risk, but prevents people who have had bad health by the bad luck of genes or environment from going without health care. Americans will not support any plan that means the incompetent or unlucky die in the streets.

  11. John Konop says:

    Paul Shuford

    In all due respect could you please tell us what insurance company provides good service? I had had a PPO with most the majors and it is always a tug of war to get paid or get something covered. And the price keeps going up and the quality keeps going down.

    And God help you if you have a HMO!

  12. Paul Shuford says:

    Doug Deal,

    1. I’d rather see businesses simply get out of providing insurance altogether, and pay more to their employees in lieu of providing insurance. Actually, the voucher system wouldn’t work with our current insurance restrictions, employers cannot pay for the individual insurance policies of employees in any way, the only way employers can pay for employees insurance now is through a group policy.

    2. I agree with giving taxpayers full deductibility on health care expenses. However, taxpayers can pay for health care expenses with pre-tax dollars right now through HSA accounts, and there are no restrictions about cosmetic surgery and the like, you can use money from your HSA with no penalty as long as it is for a health care expense.

    3. I’d like to see the govt. get out of providing health care/insurance as well, but, well, good luck. Remember how many baby boomers are retiring right now, and are chomping at the bit to get on the free medical care/free drugs train. I don’t think Medicare/Medicaid is going out of business anytime soon.

    4. I understand classifying risk based on location, that’s what is done now to some extent. I’d like to see how that kind of a system would affect risk calculation and insurance rates for everyone. I do agree that people with high-risk health problems do need a better way to get insurance than having to find a group insurance plan that can’t deny them, though, and progress is being made on this front by the insurance companies through limited-benefit insurance plans, which will be available in GA this year.

    5. Many insurance plans, especially the less expensive ones, already have this kind of “sliding scale”. I’d rather see businesses get out of providing insurance, and if that happened, “portability” from company to company wouldn’t matter, you’d have your own insurance policy.

    6. I’m a little leery of government requiring business owners to do anything (not incentivizing it, yes, but requiring, no). I’d rather this kind of thing happen through market action, or through initiatives within private doctor’s groups like the AMA. But I do think that it’s a very good idea, people should be able to shop for medical care based on price, which is difficult at best to do right now.

    7. Absolutely. This is why the high-deductible HSA plans have come about, it’s moving people back to actual insurance plans, instead of “health maintenance plans” and giving them more choice but also more responsibility for their own health care.

    John Konop,

    I don’t feel it’s ethical for me to advertise myself or the company I work for (that I do believe provides very good service) here, as I haven’t paid any advertising money to this site, nor is the focus of the site for people to advertise their businesses. The only reason I mentioned that I am an insurance agent is so that people would know and they can come to their own conclusions about whether or not that makes me biased.

  13. rsgrady says:

    It’s all about education baby! That is the first step to personal responsibility. This proposed legislation is a step in the right direction.

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