It has long been held that the people and the iced tea are a little bit sweeter in the South, but previous assessments have underestimated the scope of that warmth in Georgia.

That's the only theory for how the Uninsured Working Group - which is comprised ofthe Medical Association of Georgia, Georgia Hospital Association, Georgia Associations of Health Underwriters, Georgia Association of Health Plans, several insurers, the Center for Health Transformation, as well as former House speaker Newt Gingrich - rallied around House Bill 977.

The bill also received substantial support from NFIB Georgia, the Georgia Chamber of Commerce and Gov. Sonny Perdue.

"These are groups that don't always get together and form a coalition," says Michael Wardrip, a GAHU member and a member of the UWG who worked diligently for the bill's passage.

One member of the group that worked towards the legislation said the process was difficult, but they set aside the 75% they couldn't agree on and decided to focus on the 25% where they might reach a compromise.

"[We decided to] build consensus around issues that everybody could sign off on - something to move the ball politically and also achieve some significant things for private-market reform that are just needed by the market," says Wardrip.

Now that the legislation has passed successfully the process offers some lessons for future reform on the state level. Proponents of the legislation say the law could lead to coverage of 500,000 of the state's uninsured.

"We're glad that other states are taking a look at what Georgia has done. We're very interested in the fact that it's being picked up as an idea. People see that we have to do some things to stabilize the private market," says Wardrip.

Even if high-deductible health plan advocate, President George W. Bush is leaving office, there are CDHP enthusiasts on the state-level who are looking to keep these strategies viable.

HSA Tax Advantages

All eyes will be on the southern state to see how well this model performs and whether or not businesses will begin adopting HSAs more readily. Currently, high deductible plans follow the same income and insurance premium tax laws as traditional health insurance products, and usually individuals cannot deduct health insurance premiums from their income.

Under the new law, however, high deductible health plans will be exempt from both the state and local portions of the insurance premium tax. The bill also creates an individual income tax deduction for monthly HDHP premiums. Employers will receive a tax credit of $250 per employee enrolled in a HDHP under the new law.

"For a small company that has 10 or 15 people, that's not an insignificant amount of money. So I think we will probably work information about the Georgia law into our pitch," says Lamar Wright, a principal at The Benefit Company, an Atlanta-based employee benefits firm.

He says the most common objections he gets when talking to employers about HSAs is the complexity of the plans. With the new tax credit, however, he hopes his clients will be willing to overlook a little more work in the area of employee communication.

The law also asks Georgia's insurance regulators to develop "flexible guidelines" for coverage applying to high deductible health plans, as a way to promote the plans and push along their approval process.

The plans are also awarded new provisions under the legislation. House Bill 977 allows high deductible health plans to offer rebates and other rewards and incentives that may not be currently allowed. It also exempts high deductible health plans from existing laws governing the relationship between in-network and out-of-network reimbursement rates.

Another bill signed at the same time as House Bill 977 mandates that HRA-only plans that are not sold with or packaged with individual health insurance policies are not insurance. Senate Bill 383, also mandates that HSA plans must comply with the consumer choice option under current law. This means that the insured will be able to choose any willing provider so long as the insured pays any increase in premiums and cost.