Updated: Perdue Unveils Program To Help Cover The Working Uninsured

(Update at 8:52 a.m. adds new comment from Earl Ehrhart. New material highlighted.)

By Dick Pettys
InsiderAdvantage Georgia

(8/8/07) Gov. Sonny Perdue rolled out a public-private partnership plan Tuesday that he said is designed to help small business owners offer state-subsidized health coverage to tens of thousands of the working uninsured in Georgia.

The idea quickly won plaudits from key business players, including the Georgia Chamber of Commerce and the National Federation of Independent Business. But the initial reaction from one legislator - "This is Hillary-care. This is FDR" - was followed by more criticism from some of Perdue's own Republicans, and generated only mild interest among Democrats.

"We have serious questions about this proposal," said Clelia Davis, a spokeswoman for House Speaker Glenn Richardson.

Debuting the plan at a news conference after giving advance word to some lawmakers, Perdue said: "Small business owners have faced soaring healthcare costs, and many have been forced to drop coverage, leaving many employees uninsured. This plan essentially allows small employers to join a private group insurance plan and offer their employees coverage options, similar to the healthcare options given to workers at larger employers.”

Participation would be voluntary in the plan, which is aimed at small businesses - those with 50 or fewer employers - and has some restrictions. Only those earning under 300 percent of federal poverty level (around $60,000 for a family of four; about $30,000 for a single adult) would be eligible for coverage. Also ineligible would be those with access to other insurance, either through their employer or through their spouse’s employer.

As he envisions it, Perdue said, the costs would be shared by the state and federal governments, the employer and the employee.

Perdue said he will put about $20 million in next year’s budget to launch the program. The state is negotiating with the federal government for waivers to obtain the federal funding.

A $20 million state investment, he said, would generate over $182 million in insurance coverage for more than 30,000 Georgians. Some 1.7 Georgians now lack health insurance. An estimated 380,000 people of those work for businesses with 50 or fewer employees and earn less than 300 percent of the federal poverty level.

Under the program, three types of benefit levels would be available:

* A "benchmark" plan equivalent to that currently provided state employees.

* A basic benefit package.

* A high-deductible health plan with a health savings account.

Employers choosing to participate would be required at least to offer the benchmark plan.

Georgia Chamber President George Israel commended Perdue in a statement "for identifying and addressing one of the most critical problems facing Georgia small businesses - the rising cost of health insurance. Proposals that offer small businesses a voluntary, incentive-oriented solution, while emphasizing personal responsibility and the free markets, are most likely to succeed in providing meaningful access for employees to health insurance opportunities."

The NFIB also praised the proposal.

But the initial take from a senior legislator was less kind."All the big-government folks are going to love this. It's an entitlement program," he declared.

House Rules Chairman Earl Ehrhart, R-Powder Springs, echoed that theme. "He's going fishing with a $20 million tax bait and he's going to catch a $100 million entitlement program in the next five years."

But Ehrhart also said he couldn't see how a program such as Perdue proposed could be explained to Georgia teachers and state employees.

"The case hasn't been made to 90,000 teachers and 100,000 state employees who make substantially less than $60,000 a year that the state shouldn't subsidize their health care. How do we tell them?" he asked.

(Government figures, obtained later, show the state picks up 76 percent of the cost of the state health care benefit plan for teachers and workers. Preliminary estimares are that the state's share of costs for what Perdue is calling the Health Insurance Partnership would be about 13 percent.

Ehrhart disputed that analysis, saying Wednesday morning: "An average family of four pays about $240 for an HMO under the state plan. If they claim the state is paying 76 percent of the total cost, that policy would cost $1,000 on the market. ... Their numbers just don't hold up. Show me the data from comparable HMOs.")

Clelia Davis, Richardson's spokeswoman, said key legislative leaders weren't briefed in advance by either the governor or his chief of staff, Ed Holcombe, and added, "We do not consider a phone call 30 minutes before an announcement from a junior- or senior-level staffer a briefing."

Further, she said Richardson weeks ago apologized to the governor for an angry outburst on the last day of the session and "extended the olive branch" but has not heard from him since.

Lt. Gov. Casey Cagle said: "I have not had the chance to fully review Governor Perdue's ... plan, but it certainly addresses the issue of uninsured Georgians and will incentivize our small business owners to partner with their employees and the state to provide healthcare coverage. I commend the Governor for taking on such a challenging issue."

Rep. Sharon Cooper, R-Marietta, who chairs the House Health and Human Services Committee, had a different view: "We need to carefully explore all proposed solutions to our uninsured problem. Let people put ideas out there. Let's look at them. It's better than doing nothing. I applaud the governor for putting the idea on the table."

From the Democratic side, House Minority Leader DuBose Porter of Dublin said: "I am skeptical of a plan coming from someone who has cut the state health benefit plan by turning it over to CMOs and who attempted to cut children's health care by lowering the threshold of eligibility. However, I'm certainly interested in seeing the details ..."

At the news conference, Perdue said, "Whether we like to admit it or not, government, employer and employee all have a share and a stake in insuring Georgia's workers," and he specifically said the program "is not an entitlement; it's a voluntary, market-based initiative that will be run through private insurance companies."

He said the program "will provide affordable insurance options for Georgia's mom-and-pop shops, beauty salons, bakeries, hardware stores ... (and other shops)."

And he said it addresses the "pay-me-now or pay-me-later" issue.

"The state will pay a portion of these health insurance costs in premiums on the front end instead of paying all the ininsured, uncompensated claims on the back end that we currently have to bear now," he said, adding that it is cheaper to provide preventive care than emergency room care.

Further, he said, "This program will help small businesses, give people back their dignity and help to keep health costs down."