Georgia became a national leader in health care reform this week after Gov. Sonny Perdue signed two bills into law at the Atlanta Medical Center. This practical legislation addresses some of health care’s biggest challenges – the high cost of insurance, inequities in the tax code, the lack of portability and the increasing toll of chronic disease.

Other states have attempted broader reforms that have failed (California and Illinois) or are struggling (Massachusetts). But John Goodman, president and CE0 of the National Center for Policy Analysis described Georgia’s as “very significant reforms.”

“Georgia is now the second state in the union to allow employers to help their employees obtain personal and portable health insurance – the type of insurance that employees own and can take with them when they move form job to job,” Goodman said.

Ron Bachman, a Georgia-based actuary with extensive experience in health care strategy for payers, providers and employers, says insurers are ready to develop the more flexible and affordable products allowed under this legislation.

“Brokers and insurance agents are excited about reaching out to many previously uninsured Georgians who will now be able to afford private insurance,” Bachman said. “This also establishes affordable individual portable coverage not dependent on employment, with many of the tax advantages of employment-based coverage.”

Georgia’s legislation authorizes the state’s insurance commissioner to fast-track approval of the most affordable type of health insurance – high-deductible health plans (HDHPs).

The legislation eliminates both state and local premium taxes on HDHPs – taxes that today are as high as nearly 5% in some counties.

Georgia eliminates a major tax inequity by allowing individuals to deduct 100% of their insurance premiums from their state income taxes. (If only the federal government would follow our lead!)

Additionally, small businesses with less than 50 employees will now be able to fund a Health Reimbursement Account (HRA)-only plan. Employees will be able to use the pre-tax funds in these accounts to purchase individual health insurance and/or for medical expenses.

Most importantly, Georgia’s new legislation addresses chronic disease. Spending on individuals with chronic diseases such diabetes, heart disease, high blood pressure or depression makes up 75% of all the money spent on health care in Georgia; some argue the number is higher. Currently, financial incentives are deemed to be "illegal business practices." This legislation eliminates that prohibition.

Georgia’s new laws don’t address every problem. Health insurance is still out of reach financially for too many low-income Georgians and many Georgians lack access to health care and/or insurance due to their health status or geographic location. As legislators continue on the path toward resolving those challenges, they deserve congratulations for the bold, practical and significant steps they’ve taken in addressing an issue that impacts every Georgian.