American Forum Op-Ed

GEORGIA FORUM

By Timothy Sweeney and Alan Essig

For more than a year, federal efforts at reforming the nation’s health insurance system have been controversial to say the least. Now that the president has signed health reform into law, the partisan debate should come to an end.

It is incumbent upon policymakers to begin planning for the implementation of the national reform law so that Georgians can benefit as much as possible from all its provisions.

Instead of working on implementing reform and focusing on the ways the reforms make needed improvements for Georgians, both with and without health insurance, state policymakers have continued their political rhetoric, misinformation, and exaggeration about its effect on Georgia.

One of the worst examples of such exaggeration is the claim that the national healthcare reform legislation will cost Georgia $1 billion yearly and break the state budget.

Certainly, covering the nearly 500,000 uninsured Georgians who will be newly eligible for Medicaid will not be free; however, a closer look reveals that it will be quite a bargain for Georgia.

The Medicaid expansion does not take place until 2014 and it will be fully federally funded for the first three years. Even after those three years, Georgia’s contribution will only be 5 percent in 2017 before it ramps up to 10 percent in 2020 and beyond.

The generous federal contribution means that Georgia and the state’s healthcare system will benefit greatly from billions of dollars in new federal funding. Even when the state’s 10 percent share is fully phased in, new costs to the state will likely represent only a modest (likely less than 10 percent) increase in state Medicaid spending compared to what the state would spend on Medicaid without the expansion.

The Medicaid expansion itself will actually ease the state’s financial obligations in other areas. For example, many uninsured patients who receive state-funded mental health services will soon get that coverage through Medicaid. In addition, as the number of uninsured Georgians drops, the state will spend less money reimbursing hospitals for treating them. In fact, this healthcare, known as “uncompensated care,” is projected to cost 40 to 50 percent less over the next 10 years due to the reform.
Finally, it is also important for state policymakers not to let political rhetoric get in the way of discussing the important insurance reforms that provide greater economic security to Georgians who already have health insurance, as well as to those who now will be able to get health insurance.

In the first year, insurance policies will have to cover dependent children up to age 26 even if they are not full-time students, and insurance providers will no longer be able to refuse to cover pre-existing conditions for children. In addition, insurers will no longer be able to rescind coverage when someone gets sick (except in cases of fraud) or impose lifetime benefit caps.

Over the following years, insurance companies will be required to cover pre-existing conditions for adults and will no longer be permitted to cap yearly benefits.

In addition to covering more uninsured people through Medicaid, the reform package will provide hundreds of millions of dollars in health insurance tax credits for middle-income individuals and families beginning in 2014. Tax credits to help small businesses provide coverage to their employees take effect this year.

The political fight over passing reform should end; it’s now time for policymakers around the state to implement reform so that it best benefits the people of Georgia.

Instead of exaggerating the costs to fight yesterday’s political battle, state leaders should develop honest and credible cost projections that can help us plan for the future. The benefits of expanding insurance coverage to nearly 500,000 Georgians far outweigh the marginal costs. National health reform is a great bargain for Georgia.
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Sweeney is the senior healthcare analyst and Essig is the executive director of the Georgia Budget & Policy Institute, a nonpartisan, independent think tank that seeks to build a more prosperous Georgia by rigorously analyzing budget and tax policies and providing education to inspire informed debate and responsible decision-making. Visit www.GBPI.org for more info.
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