Georgia insurance commissioner Ralph Hudgens gave an appraisal of federal health care reform Feb. 20 to a roomful of Republicans at the Ila Restaurant.
It was not a positive review. The Madison County resident predicted premiums will skyrocket over the next year as health insurers are required to cover people with pre-existing conditions and offer new services, such as pediatric dental and eye coverage, in basic plans.
“I had two different companies come tell me prior to the beginning of the exchanges, they came in and said that this one factor alone of having to include people with pre-existing conditions, that one factor would cause the prices of insurance to double,” said Hudgens.
The insurance commissioner said the federal government “kicked the can down the road” by not requiring this year’s plans to comply with the Affordable Care Act (often called “Obamacare”). This year’s plans don’t include some of the new mandates. But plans next year are expected to be ACA compliant.
“The rate shock next year is going to be pretty staggering,” said Hudgens.
Georgia was one of 25 states not to offer its own state-run health exchange, relying on the federal government to set up an exchange instead. Those exchanges opened Oct. 1 last year. Hudgens offered an overview of how those were set up in Georgia. He said the insurance commissioner’s office is qualified to review insurance rates to determine whether prices fairly match policies.
The insurance commissioner said seven companies submitted plans to his office for review for inclusion in the new federal health exchange. He noted that two withdrew from consideration prior to the opening of the federal exchange. That left five companies to serve Georgia. But only one company, Blue Cross Blue Shield, covers all 159 counties in the state. He said Humana Insurance Plans covers most of the state, except for the southwest portion where medical facilities are lacking. Kaiser Permanente offers coverage in Atlanta and Athens. Peachstate Insurance offers coverage in metro Atlanta and Alliant Health Plans offers coverage in northwest Georgia.
Hudgens said there are now 110 licensed health care navigators to help people find a plan from one of the five companies active in the federal exchange in Georgia. The commissioner said Humana is getting about 85 percent of the new plans through the exchange.
“Blue Cross Blue Shield is getting very, very few of the plans,” he said. “They’re getting it where they have a monopoly and that’s in southwest Georgia.”
Hudgens said Humana offers four plans: bronze, which offers the least coverage, and then silver, gold and platinum, which offers the most. He said most people are going with the Human’s silver plan. He said this plan costs a 25-year-old making $25,000 a year $127 per month and includes a $4,600 deductible. This same plan would cost the same person with a $45,000 salary $179 per month.
For a family of four with a household income of $75,000, this year’s silver Humana plan costs $525 a month, with a $4,600 deductible on each family member, but a maximum family deductible of $9,200 in a year.
“Let me tell you, these plans are no deal at all,” said Hudgens. “They’re nothing like what used to be available to individuals.”
Hudgens said enrollment rates in Georgia haven’t been what the federal government expected.
“They (the federal exchange officials) were expecting in December to enroll a couple of hundred thousand people,” he said. “They really only enrolled 58,000, but the reality of that number is that only 30,000 went all the way through and actually paid their first month of premiums.”
The commissioner said people signing up for the exchange are often poor and sick.
“Let me tell you, the enrollment in the exchanges is not at all what they anticipated,” said Hudgens. “It’s the elderly and the sick. That’s who’s going on the exchanges. And those two are the most expensive groups that you can cover. So these costs that I talk about going up this year. They’ll have to submit to us their rates for the next year and the rates they will submit will be staggering. It’s going to go way up again.”
Hudgens said those on state health benefit plans and other plans under the Employment Retirement Income Security Act (ERISA) won’t be affected as much as individuals and businesses.
“Medicare and Medicaid won’t be greatly affected by the ACA,” he said. “What’s affected are the individual plans, the small group plans and the large group insurance, not the ERISA programs.”
Hudgens said young people will face higher premiums than before and he feels young people will ultimately pay a $95 fine for not having insurance instead of signing up on the exchange. But those penalties are set to rise as time passes in an effort to motivate people to get coverage. If people don’t get insurance, they will be fined at income tax time through a lesser return or a greater bill. County Republican chairman Bruce Azevedo asked how enforcement will work with those who don’t file income taxes.
Hudgens said subsidies are supposed to help lower income people afford health insurance. Those subsidies will go from the federal government to the insurance companies, who will then offer lower premiums. But Hudgens said this system hasn’t been set up yet.
“The software hasn’t been developed to get the money from the federal government to the insurance companies,” said Hudgens. “They’re going to have to extend this coverage only getting partial payment on it.”
The commissioner said some insurance companies will have a hard time staying afloat.
“My job is to make sure they (the companies) remain solvent,” said Hudgens. “Now, Blue Cross Blue Shield I feel can remain solvent, Humana. But these small ones like Peachstate and Alliant, if this goes on a long time before the federal government develops this software, their reserves are going to go down and we may have to put them in a receivership status.”
Hudgens said he’d like to see the ACA overturned. He said he supports legislation in the state General Assembly to prohibit state money from going to facilitating federal exchanges.
“I think it (defunding legislation) would affect my department, but if it will help collapse Obamacare, I’ll be for it,” said Hudgens.
The commissioner said he feels the reform effort was misguided.
“The reality in America is everybody gets healthcare regardless,” said Hudgens. “You go into the emergency room down here at St. Mary’s or Athens Regional and you’re going to get seen and you’re going to get health care. But not everyone has health insurance and that’s what this whole thing was designed to do was to try to get everybody to have health insurance, but it is just absolutely a disaster.”
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