Georgia Taking Lead in Interstate Insurance Laws

Gov. Sonny Perdue is showing the way on how states can implement cross-state selling of individual health insurance. States can voluntarily enter into reciprocity agreements with like-minded states. Together they can create a multi-state market attractive to insurers selling new lower cost comprehensive products.

His push for free-market insurance reform is embodied in two bills, making their way through the legislation process.

Both bills have two major components. First, the legislation promotes a unilateral acceptance of comprehensive individual health policies from other states. As a show of good faith, Georgia would accept individual health policies approved in other selected states without the requirement that they accept policies approved in Georgia. Certain minimum standards and consumer protections are required before accepting such policies.

Second, the real power and value of the cross-state selling concept is to establish a coalition of states with a combined large consumer base that will encourage insurers to develop and bring new low cost affordable plans to Georgia. The current fifty state filing processes take insurers years and millions of dollars in state-specific development costs, administrative mandates, filing requirements and fees.

When new products are developed, Georgia is not usually in the top tier of states for early release. Larger population states get first preference. However, being a part of an expanded multi-state market with 30-40 million population will increase our attractiveness as a key market for existing and new insurers. The proposed cross-state legislation directs the Georgia Insurance Commissioner to be the leader in creating a multi-state coalition with reciprocal health insurance policy approvals.

Some are concerned that legislation circumvents existing coverage mandates. The opposite is true. The legislation requires plans to be comprehensive medical and surgical coverage. Limited benefit plans and restrictive policies are specifically excluded.

Gov. Perdue’s efforts will produce a win-win-win. Insurers win by lowering product development overhead expenses and gaining more customers. Cost shifting to employer plans is lowered when the more of the previously uninsured have coverage. Hospitals and doctors will have fewer bad debts and less uncompensated care. But most of all: Georgians win with more choices of affordable, comprehensive, and portable individual insurance.

The 2010 Georgia General Assembly should favorably consider the cross-state multi-state concepts proposed by Gov. Perdue. Full and adequate consumer protections should be included. Plans should be broad-based comprehensive coverage. This is a strong free-market approach that will help both those currently insured and lower the number of uninsureds. It will not cost the state treasury a single dime, but it will save Georgians millions in lower premiums. Only the most partisan observer or parochial lobbyist could be against this approach. The alternative is ObamaCare, but that may be what some objectors really want.

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