ATLANTA – Georgia’s lawmakers have passed House Bill 977, which Gov. Sonny Perdue is expected to sign into law any day now.
The bill, the first of its kind in the nation, exempts insurers from paying taxes on premiums in the sale of their high-deductible health savings account (HSA) plans.
Small employers would receive a $250 tax credit per enrolled worker, and individuals buying high-deductible HSAs would receive a tax deduction.
According to the Georgia Association of Health Plans and bill sponsors – State Senator Judson Hill (R-Marietta) and State Reps. Tom Knox (R-Cumming), Jerry Keen (R-St. Simons) and Mickey Channell (R-Greensboro) – the tax changes will lead to lower insurance prices.
Supporters also say it will cover 500,000 of the state’s uninsured. According to the U.S. Census Bureau, more than 1.5 million Georgians, or 17.6 percent of the population, are uninsured.
The Center for Health Transformation supported the legislation. State project director Jim Frogue said lessons will be learned and studies done once it’s implemented.
“We’ll see the most innovation in health insurance designs and products built around rewards and incentives for saving being teed up,” he said.
Devon Herrick, senior fellow at the National Center for Policy Analysis, said Georgia is “on the right track.”
“The classic Rand Health Insurance Experiment illustrated nearly 30 years ago that patients do become wiser consumers of healthcare when they face significantly increased cost-sharing, with few (if any) ill effects on their health,” he said.
Herrick believes, however, that Georgia should remove more of its mandated benefit laws and eliminate taxes from all health coverage, not just HSA-qualifying plans.
The American Cancer Society and AARP opposed HB 977. In its analysis of the bill, the Georgia Budget and Policy Institute (GBPI) argued that it likely will not change the behavior of those who can’t afford health insurance.
“The relatively modest tax incentives are more likely to motivate those who currently have traditional/comprehensive coverage to switch to high-deductible plans, and to motivate some employers who currently provide more comprehensive coverage to move their employees into high deductibles,” said Timothy Sweeney, senior healthcare policy analyst.
GBPI’s analysis compared the potential coverage gains made if money directed to high-deductible health plan purchasers and insurers in the bill were redirected to children’s coverage in Georgia’s SCHIP program or Medicaid expansion.