A new law in Georgia will allow state-licensed health insurance companies to sell policies offered across the nation that provide less coverage than the state requires. The new law is set to take effect on July 1 and is said to be among the first of its kind to be offered in the United States.
Policies Only for Individuals, Not Employer Groups
Under the new law, individuals in the state will have access to a larger number of policy options since they will be able to purchase from additional states. However, individuals who are currently insured by their employers fall into the category of group coverage and won’t have access to the policies.
Independent policyholders currently comprise only about 4 percent of the market in Georgia, according to the Kaiser Family Foundation. Because they are underserved, state lawmakers want to open up opportunities to this group.
It’s unclear how many insurance companies operating in the state will eventually offer plans. Currently, none are able to because the state insurance commissioner’s office has to write and adopt regulations that will govern the policies–a process that could take several months to complete.
Critics Say Law Could Open the Door for Watered-Down Policies
The debate of whether or not to offer health insurance across state lines has existed for many years. Most recently, Republican lawmakers proposed to have this provision added to health care reform prior to the law’s passage in March 2010. Their proposal was turned down.
Now that the law has been passed in Georgia, experts say it could drive prices down by introducing new competition and allowing roughly 20 percent of residents in the state to find a policy they can afford.
But critics of the law complain that taking this route could open doors for watered-down policies that don’t cover important services like mammograms, diabetes care or even regular checkups for young children that are required under Georgia policies.
The bill’s sponsor, state Rep. Matt Ramsey, says he is working to build in consumer protections that will address these concerns, including requiring out-of-state plans to carry a benefits chart outlining exactly what Georgians are getting for their money.
In addition, he says those who purchase the plans will still have access to the state’s dispute resolution process and Georgia courts, giving them the protections they need if they decide to take on an out-of-state plan.
