Opinion

Georgia taking lead in interstate insurance laws

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Ron Bachman
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      Ron Bachman

      Ronald E. Bachman is president and CEO of Healthcare Visions, a thought leadership firm dedicated to advancing ideas and policy initiatives that are transforming the U.S. healthcare market. The major goals of Healthcare Visions are to advance consumer-based solutions to lower the number of uninsureds, improve mental health coverages, develop the concept of consumer-centric Medicare and Medicaid, and advance employer introductions of healthcare consumerism.

      Mr. Bachman is also a Senior Fellow of the Center for Health Transformation (CHT), the Georgia Public Policy Foundation (GPPF), the National Center for Policy Analysis (NCPA), and at the Wye River Group on Health. Mr. Bachman is an actuary with extensive experience in healthcare strategy for payers, providers and employers. Ron is a retired partner from PricewaterhouseCoopers where he consulted to a broad range of clients including: employers, HMOs, hospitals, physicians, indemnity carriers, BlueCross BlueShield plans, as well as State and Federal Agency clients.

      In 2008 and 2009, Ron facilitated the Georgia Uninsured Work Group and the passage state health reform legislation to reach 500,000 uninsured in Georgia. That legislation has been praised as a new market-based approach to dealing with the uninsured in the United States. Ron is actively working with other states to pass similar reforms and create a coalition of like minded state desirous of market based solutions. As a Sr. Fellow since 2005, Ron has worked on special projects with CHT and Speaker Gingrich regarding the uninsureds, health policy issues, and market transformation ideas.

      In 2008, Ron has testified before the U.S. Congress on “Engaging American Ingenuity to Solve the Uninsured Problem.” Ron worked closely with the Bush White House and Treasury on the language and principles of the 2002 Health Reimbursement Arrangement (HRA) guidelines. In 2003 and 2004, Ron worked through the CHT to provide policy input on Health Savings Accounts (HSA). Ron has consulted with various government agencies on national health issues and legislative and regulatory proposals. He has served as a designated expert on actuarial issues to the Centers for Medicare and Medicaid Services, the Congressional Budget Office, the Department of Labor, the National Institute of Mental Health, and several members of Congress.

      Ron was instrumental in providing technical and market advice on mental health that resulted in the passage of the 2008 Wellstone-Domenici Parity Act. Mr. Bachman was an expert resource on mental health policy to several members of Congress, including Senator Ted Kennedy and Senator Pete Domenici. During the past two decades, Ron testified in over 30 states on the costs of mental health. He produced several financial studies and analyses of national and state proposals for mental health parity.




      Ron is active in several American Academy of Actuaries Work Groups including: Mental Health, Individual Health Insurance, Consumer-Driven Healthcare, Genetic Testing, Mandated Coverages, High Risk Pools, The Uninsured, Small Group, and Healthcare & Tax Credits.

      Mr. Bachman is the author of several publications, including “Consumer-Driven Healthcare – The Future in Now”, “Giving Patients More Control” published by the National Center for Policy Analysis. He has written numerous articles such as, “Boomers Will Revise an Aged, Ineffective System” and “Consumer-centric Medicare” both articles co-authored with Newt Gingrich, founder of the Center for Health Transformation. As an advisor to the Wye River Group on Health (WRGH), Mr. Bachman was instrumental in three seminal reports entitled “An Employer’s Guide to Patient-Directed Healthcare Benefits”, “An Employer’s Guide to Health Care Consumerism”, and “An Employer’s Guide to Pharmaceutical Benefits.” Ron is a member of the American Academy of Actuaries Mental Health Parity Work Group that produced the 2005 report entitled, “Mental Health Parity: Often Separate, Usually Unequal.”

      A sample listing of other articles and papers written by Mr. Bachman are: Healthcare Consumerism – the basis of a 21st Century Intelligent Health System; HSAs Myths and Facts –The Inconvenient Truths; Clinical Depression – A Bottom Line Issue, If CEOs Only Knew; A Legislator’s Guide to Creating an HSA State; Consumer-centric Medicare; A Roadmap for Legislators on Market Reform for Health Insurance; and Georgia Collaboration Succeeds in Market Reforms.

      Ron is a Fellow of the Society of Actuaries, a Member of the American Academy of Actuaries, a past Board member of the Southeastern Actuaries Club, and past President of the Atlanta Actuaries Club. Mr. Bachman is on the Board of Directors of the National Mental Health Association of Georgia, the Georgia Free Clinic Network, and Skyland Trail.

      Ron holds a Masters in Actuarial Science from Georgia State University and a Bachelor of Science in Applied Mathematics from the Georgia Institute of Technology. He is an active member of the Simpsonwood United Methodist Church in Atlanta, Georgia.

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.

Nationally, the cross-state concept has been accepted by Republicans and Democrats as a good starting point for bipartisan reform. Studies have shown that up to 12 million Americans would become insured with effective national legislation for cross-state selling. But, while Congress debates, Gov. Perdue creates. His push for free-market insurance reform is embodied in House Bill 1184 (key contact Rep. Matt Ramsey) and Senate Bill 407 (key contact Sen. Judson Hill). Both bills are making their way through the legislative process. The slight differences will likely be ironed out when the two bills are merged.

Both cross-state 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. Many mandates lower costs. For example, according to the National Business Group on Health, the Georgia mandate for colorectal cancer screenings is a cost effective mandate. Advocates for cancer screenings would see the Georgia required cancer benefits sold in coalition states with the associated lower cost. People in other states would get cancer screenings provided by all policies sold under Georgia law.

There is no direct relationship between the number of state coverage mandates and costs. Georgia policies are not high cost because of mandates. Georgia policies are high cost because we lack a competitive market. A few carriers, however well intentioned, dominate the Georgia individual insurance market. Free and open markets always benefit the consumer with more choice and lower costs. They also make insurers better.

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.

Ronald E. Bachman FSA, MAAA is a Sr. Fellow at the Center for Health Transformation, A Sr. Fellow at the Georgia Public Policy Foundation, and a Sr. Fellow at the National Center for Policy Analysis. Nothing in this article is intended to support the passage or failure of a particular piece of legislation.