Governor Perdue Announces Major Initiative to Aid Georgia's Working Uninsured

Health Insurance Partnership to focus on employees of Georgia’s small businesses

ATLANTA – Today Governor Sonny Perdue announced preliminary details on a major new health care initiative for working uninsured Georgians called the Health Insurance Partnership for Georgia.

“The Health Insurance Partnership allows for available, accessible and affordable healthcare options for small business owners and employees, promoting personal ownership and responsibility for their healthcare decisions,” said Governor Sonny Perdue. “Small business owners have faced soaring healthcare costs and many have been forced to drop health insurance. This plan allows small employers to join a private insurance plan and offer employees coverage options, similar to the healthcare options given to workers at larger employers.”

Under Governor Perdue’s proposal, small businesses will be able to voluntarily join the program and offer private health insurance to employees. The cost of the insurance plan will be shared by the employee, employer and a combination of state and federal funds. Because of Medicaid initiatives that have realized savings in both state and federal funds, the state anticipates federal approval of using saved federal dollars to help cover its share of the cost.

While the exact level of state investment will not be known until details of the program are finalized, Governor Perdue said today he is willing to invest up to $20 million to have 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.

Employees eligible for the plan would include sole proprietors or those who work for small businesses of 50 employees or less. Eligible employees must work at least 20 hours per week and earn less than 300 percent of the Federal Poverty Level (FPL), or approximately $62,000/year for a family of four or $30,600/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.

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 Health Insurance Partnership will enable sole proprietors and small businesses that have not been able to offer health insurance in the past the opportunity to offer a menu of private benefits options to employees.

The goal is to offer this segment of Georgia’s uninsured a variety of options for private health care coverage. The options vary based mostly on the level of premium the employee chooses to pay, such as:

• Benchmark benefit plan comparable to the plan offered to state employees
• Basic benefit package meeting the requirements of the Small Business Employee Choice of Benefits Health Insurance Plan Act: a basic employee health option authorized through SB 174 which went into effect July 1, 2005.
• High Deductible Health Plan with a Health Savings Account (HSA).

The employer must offer at least the Benchmark plan to its employees if they choose to participate. Employees will not qualify if he or she already has access to health insurance through an employer, a spouse’s employer, or qualifies for Medicaid or TRICARE. All participants must be a legal resident of Georgia.

Under Governor Perdue’s proposal, the plan will be funded by General Appropriations and federal funds. The Department of Community Health (DCH) will apply for a federal 1115 Waiver, which allows changes to benefits, reimbursement and coverage of expansion groups. Through the waiver process, the state will commit to a program that can be formally evaluated.

Governor Perdue was joined at the announcement today by DCH Commissioner Dr. Rhonda Medows and National Federation of Independent Businesses (NFIB) State Director David Raynor.

“Our health impacts the key aspects of life - the ability to learn, work, enjoy our families and contribute to our society,” Dr. Medows added. “This is an extraordinary opportunity for small businesses to maintain a healthy workforce and for their employees to enjoy the benefits of good health.”

“The NFIB commends Governor Perdue and his Administration for identifying access to affordable health insurance as a top concern for Georgia’s small business community,” said David Raynor, the federation’s state director. “In the most recent survey of NFIB membership in Georgia, only 47 percent of member respondents indicated that they provide health insurance coverage for full-time employees, citing cost as the major barrier.  In addition to affordability, entrepreneurs prefer marketplace-driven, portable products in which participation is voluntary.  NFIB looks forward to working with the Perdue Administration to ensure small employers’ voices are heard as key drivers of continued economic vitality in Georgia.”

The plan is also receiving high marks from business groups such as the Georgia Chamber of Commerce.

“The Georgia Chamber of Commerce commends Governor Perdue for identifying and addressing one of the most critical problems facing Georgia small businesses – the rising cost of health insurance,” said Chamber president George Israel. “Proposals that offer small businesses a voluntary, incentive-oriented solution, while emphasizing personal responsibility and the free markets, are most likely to succeed in providing meaningful access for employees to health insurance opportunities.”

Health Insurance Partnership FACT SHEET

Small Business Challenge:

• Georgia is home to more than 800,000 small businesses, many of whom have been priced out of the health insurance market because of their small number of employees or pre-existing conditions within their group
• An estimated 62,000 small businesses have less than 50 employees and do not currently offer health insurance coverage for employees, which accounts for approximately 380,000 uninsured Georgians earning less than 300 percent of the federal poverty level (FPL)

Georgia’s Solution:

• Allows small business to join together in a larger group plan and offer private insurance to their employees through the free market
• Insurance cost shared by Employee, Employer and State and Federal Funds
• Implement by July 1, 2008 and administered by DCH

Financing the program:

• State to apply for an 1115 Medicaid Waiver:
  • Waiver period of 5 years, but can be renewed if meeting objectives

  o        Allows changes to benefits, reimbursement and coverage of expansion groups

  o        State commits to a policy pilot that can be formally evaluated

  o        Anticipate federal approval of waiver because of savings from Medicaid program efficiencies

  o        Obtain federal match from the Centers for Medicare and Medicaid Services (CMS)

Eligibility for the plan:

• Income less than or equal to 300 percent of FPL
• Employed by a small business with less than 50 employees or a sole proprietor. 
• Works a minimum of 20 hours a week
• Resident of Georgia for at least six months
• Citizen or qualified legal alien

Who is NOT eligible for the plan:

• Employees who have had health insurance during the past 6 months
• Spouses with access to health insurance coverage through their employer even if he/she chooses not to enroll
• Individuals covered by Medicare or TRICARE, or another insurance plan

Businesses are eligible to offer the plan if:

• Business is located in Georgia
• Employs fewer than 50 employees or a sole proprietor
• Insurance must be offered to all eligible employees
• Have not offered coverage within the last six months, or agrees to maintain existing contribution levels for the first 12 months of being on the program

Health Plans may participate in the plan if:

• Agree to not impose a pre-existing exclusion clause
• Agree to offer a premium consistent with State requirements
• Agree to other participation criteria established by the State