Health Insurers Not Interested in Georgia’s New Law
stethoscope and pen resting on a sheet of medical lab test results, with patient file and x-ray or mri film
A state law takes effect July 1st that allows out-of-state health plans to sell insurance to Georgians.
And although we’re just weeks away from that date, it appears unlikely a single resident will benefit.
Why?
No insurance companies have applied to participate in the program.
That’s a surprise to many Republicans in state government, who trumpeted the idea as a way to drive down health insurance costs by applying free-market principles.
If a plan is good enough for, say, Alabama, why shouldn’t Georgians be able to purchase it? Especially if it cost less.
Mila Kofman is a professor at Georgetown University, and the former Insurance Commissioner for the state of Maine. She says she’s a little surprised no company applied, but says insurers’ lack of interest is probably a good thing.
“The only way out-of-state companies could sell products that are cheap is if they cut corners,” Kofman says. ”It’s like buying a car without an engine. It’s going to be pretty cheap, but it doesn’t work.”
Representative Matt Ramsey (R-Peachtree City) sponsored Georgia’s law. He says insurance should work much like other consumer-driven commodities, even if it means consumers buy a bare-bones insurance plan.
“If you want to go out and buy a Ford, then you should have that choice to go out and buy a Ford. But if you want to go out and buy a Land Rover, you should have that option too. I think that’s the nature of the free market.”
Ramsey believes insurance companies are not interested right now because the Supreme Court has yet to rule on the constitutionality of the Affordable Care Act.
“Insurance companies are not going to spin their wheels and invest great time and money opening up new product lines until we get a decision.”
That decision is likely to come in the last week of June.
If the Supreme Court fully upholds President Obama’s healthcare law, a new insurance exchange would likely make obsolete Georgia’s cross-state system.
But if it fails, Ramsey expects insurers to begin to sign up for Georgia’s program.
(Despite repeated attempts, Georgia Insurance Commissioner Ralph Hudgens declined to speak with WABE.)
This story is part of a reporting partnership that includes WABE, NPR and Kaiser Health News.
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