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Health Connector Coming to Georgia?

Senate Bill 404, promoted by Lt. Governor Casey Cagle, passed 42-12 last week. 404 would establish a health connector type plan here in Georgia. A connector is basically an on-line marketplace where individuals and groups can purchase insurance/health care products.

The goal of Cagle’s plan is to reduce the number of uninsured Georgians (currently at about 1.7 million) by making it easier for them to afford and access coverage. Affordability is addressed by removing many of the state mandated coverages and by allowing pre-tax premium payment. Accessibility is addressed by making it easy to evaluate alternative products and enroll via the web portal.

Massachusetts blazed the trail with the Commonwealth Connector – a program championed by Governor Mitt Romney. After being in business for a short time, Commonwealth Connector is being pressured to cut costs, most notably by reducing physician reimbursement.

Commonwealth Connector’s target market fit into two major groups: (i) participants earning less than 300% of the poverty level who therefore receive tax-payer funded subsidies, and (ii) participants earning more than the 300% threshold who do not receive the tax-payer subsidies. As it turns out, enrollment in group (i) was 24% higher than expected, and group (ii) was 54% lower than expected. In a nutshell, they got 33,000 more subsidized customers and 19,100 less non-subsidized customers than expected. Kinda proves that people will do what you pay them to do, huh? Capitalism, anyone?

It also doesn’t surprise me that Commonwealth Connector had higher than expected claims costs. Imagine not having health insurance for years and years. What’s the first thing you are going to do as soon as you get your fancy new ID card? That’s right, incur a claim!

The Georgia model looks to include traditional individual and group health insurance products, the PeachCare for Kids products (SCHIP), and uninsured plans that offer pre-paid doctor and hospital care. A new governmental entity, the Georgia Health Marketplace Authority, will be in charge of running this program.

I’m told that the playing field will be leveled by allowing Georgia insurance brokers the ability to offer reduced state mandate products. This is certainly a good thing for both my profession and Georgians.

As we approach the national elections the topic of national health care is front and center. Insurance is regulated on a state by state basis. This is why you see individual states like Massachusetts and Georgia enacting such legislation. There is a natural tug-of-war between state and Federal authorities over control of health care – you (and your wallet) have a front row seat!

You can read my thoughts on national health care by clicking here. It will put much of this discussion on connector plans in perspective.

So, what do you think? Will the Georgia Health Marketplace be a good thing for the citizens of Georgia? In your mind, what are the key success factors for such a program?