Last year, Governor Kemp, along with lawmakers from across the state, unveiled Georgia’s 1332 waiver to the Affordable Care Act. This waiver will help reform Georgia’s healthcare system by lowering insurance premiums, offering additional choice in private healthcare markets, strengthening small businesses’ ability to provide healthcare insurance to their employees, and empower Georgia to make decisions about what healthcare policies and regulations work for its citizens. While work continues on this important waiver, some lawmakers have already introduced bills that would undermine the intent of this important health care reform.
Recently, lawmakers have advanced legislation that, if signed into law, has the ability to grant state agencies an unprecedented degree of control over the health care system through pharmaceutical purchasing. These changes would affect beneficiaries of the State Health Benefits Plan (SHBP), which include our retirees and teachers. Additionally, this legislation could override federal protections of certain private plans, including employer offered health plans that many Georgians are on today.
The root problem of high drug prices has always been the pharmaceutical manufactures setting unrealistic prices for life-saving drugs. Instead of tackling these high drug prices at the source, legislators have instead chosen to focus on expanding regulatory authority to arbitrarily set prices, rebates, and purchasing structure of pharmaceuticals across the state. The current system and negotiations help ensure government entities, their employees, and member beneficiaries can get the medications they need at the lower price through a free market.
Unfortunately, special interest groups, lead by large pharmaceutical companies and disguised as a “local pharmacy” effort, have misled lawmakers in an effort to divert public attention away from avarice price setting of big pharmaceutical companies. By restricting the free market negotiations for lowest prices, new regulations will make it harder for businesses and the state of Georgia to keep their healthcare costs low in the face of increasing pharmaceutic prices set by pharmaceutical manufactures.
The end result? With decreased ability to negotiate, higher prescription drug costs will continue to drive up the premiums for millions of Georgians.
Yet, it could be get even worse.
The most concerning parts of these bills, are the implications this legislation presents for private health care plans. Language in these bills has the potential to empower state regulators to override federal protections of private health plans. Currently, the federal government protects private retirement healthcare programs under the Employee Retirement Income Security Act of 1974, also known as ERISA. ERISA laws have been in place to protect these plans from states imposing new and costly regulations on health care plans that protect our country’s retirees. Undermining ERISA laws has a serious potential for immediate price increasing and cost controlling in private insurance accounts creating huge increases for businesses operating insurance plans in Georgia.
Prescription drug prices are a challenge for all Americans. But, imposing more unnecessary regulations, encouraging reliance on government subsidies, and undermining competition will not solve that problem.
I urge state lawmakers to reconsider measures of Senate Bill 313 that fundamentally undermine the free market ethos that has fortified Georgia’s economy for decades and refocus their efforts to tackle the real problems of high drug prices to develop solutions that empower hardworking Georgians to find quality, low cost healthcare that works for them.
