1a. Regional Coalition Q&A

Regional Coalition
OVERALL IMPACT:  There are many beneficial market changing benefits that flow from increased competition and a Regional Health Coalition:
        1. Insurer administrative savings - at least 2-3% of the develpment and maintenance costs of introducting a new product (Normal administrative expenses are 10-15%).
        2. Marketing savings - common marketing and sales materials will save 1-2%. (Normal non-commission marketing expenses are 5-8%) 
        3. Increased competition - will expand the marketing and sales of more cost effective products.  (e.g. HSA eligible plan sales range from 2.4 % in Mississippi to 14.9% of market share in Minnesota. Georgia HSA marketshare is 5.8%) 
        4. Increased competition - will lower prices. (e.g in Minnesota the average monthly HSA eligible plan premium is $523, in Georgia the average HSA eligible plan premium is $730). 
Premiums would be 28% lower if Georgia had HSA eligible plan premiums the same as Minnesota
Q1. What is a Regional Health Coalition?
A1. The Regional Health Coalition could be contiguous regional states with sufficiently consistent individual and group insurance administrative and coverage mandates.  The states would agree to a new policy approval process for individual and group applications using common requirments acceptable to all participating coalition states.  In addition, other states from around the country have shown interest in participating in a coalition with common standards. 
Q2. What states would participate?
A1. The likely start for a coalition would be Georgia, South Carolina, North Carolina, Tennessee, and Alabama.  Some of these states have indicated interest in the past.  Nationally, there are smaller population states that have expressed interest to increase their market size and opportunity to get new policies, products and services introduced into their states.
Q3. What products would be involved?
A3. The bill authorizes a coalition to look at reciprocity using common standards for Comprehensive Major Medical plans.  Comprehensive Major Medical plans are defined as plans with at least $1,000,000 lifetime maximum coverage, a costsharing out-of-pocket maximum no greater than an HSA eligible plan.  The plans must include coverages for at least: (a) Ambulatory patient care, (b) E,mergency services, (c) Hospitalization, (d) Maternity and new born care, (e) Mental health and substance abuse disorders, (f) Prescription drugs, (g) Rehabilitative and rehabilitative services and devices, (h) Laborary services, (i) Preventive and wellness services, (j) Chronic disease managment, (k)Pediatric services.  
Q4. Why does Georgia need to participate in a multi-state coalition? 
A4. The Georgia market could be expanded from 7.1 million non-Medicaid lives to 25 million lives with just the five state coalition of Ga., S.C., N.C., TN, and Ala.   Fully insured individual and group products must be designed, filied, and approved in each of the 50 separate states.  Each state has its own administrative and coverage mandates.  Insurers must develop separate internal technology variances to meet those state unique requirements. Marketing materials, pricing variances, agent training, underwriting, approval, and other aspects of administering a plan must be customized by state.  It takes years and millions of dollars for any insurer to market a new product across the country.  Georgia has a potential to lead the development of a new comon set of standards that could increase the desireablity for existing insurers to bring new of the expanded market.  In addition,.the expanded market with common standards would be attractive for single state insuers, new insurers, and regional companies to expand into this market.  Venture capital funds are more likely to support a new insurer in a large market where a single approval provides sales in a market of 5 plus states.
Q5. What should Georgia take the lead in organizing a Regional Health Coalition?
A5. In 2010, Georgia passed legislation that allowed health poilicies approved in other states to be sold in Georgia.  This "one way" approval process elevated Georgia as a state willing to take the first step. The natural extention or that 2010 legislation is to ask others to join together in a new process of approval recipricity or a "two way" approval process.
Q6. What does the legislation authorize the Commission of Insurance to do?
A6. The Commissioner is authorized to take a lead role in establishing a coalition of other states to adopt Comprehensive Major Medical plans with an alternative approval process that utilizes a common set of policy approval requirements among the coalitionstates.  
Q7. What happens after establishing a coalition with common standards?
 A7. The Comprehensive Major Medical policies meeting the coalition standards will be approved for sale in Georgia, if the insurer is authorized to engage in the business of insurance in Georgia.
Q8. Are there acceptable standards that the Georgia Insurance Commissioner will follow in the process of leading the coalition to a commmon approval process? Why are they not detailed in the legislation?   
A8. Yes, there are standards and with Georgia taking the lead we will have more control over setting the standards as close as possible to current Georgia law.   The standards and recommendations are not included in the legislation so that the Commissioner can approach other states (pre-screened for consistency with current Georgia law) with a targeted but open agenda.