Health care spending increases in key areas

(July 17, 2007) There was plenty of hullabaloo during the 2007 regular and special sessions about the potential for a devastating wholesale government takeover of Connecticut’s employer-sponsored health care system. But lawmakers ultimately chose to focus on making reasonable expansions of current public programs as well as making appropriate investments in the technological future of health care.

Many of these budgetary health care initiatives were strongly supported by the business community, both on its own as well as through coalitions with hospitals and health insurers. These initiatives indicate a growing recognition that health care quality, costs and access are inextricably linked, and that any meaningful and sustainable health care reform must address each of these interrelated issues.

The 2007-09 state budget makes significant improvements to Connecticut’s health care delivery system. It also reflects a renewed level of commitment by the state to existing programs such as HUSKY, as well as to relatively new endeavors such as a future, fully interoperable and secure system of electronic medical records.

Strong efforts were also made in the area of increasing Medicaid reimbursement rates to health care providers in order to reduce the current cost-shifting from the public sector (which has chronically underfunded its health care obligations) to the private sector. This cost-shifting has made health insurance even less affordable for employers as they strive to provide competitive health benefits to their employees.

In total, the budget expands state health care expenditures by almost $338 million over the biennium, including increased provider reimbursements under Medicaid of more than $248 million. The overall two-year increase also includes such positive health care initiatives as $5 million for school-based health clinics, $5 million for community health centers, $2 million for various healthy-lifestyle initiatives and childhood obesity prevention programs, and $750,000 toward the development of a statewide health information technology plan.

Along with this increased state funding, other meaningful health care reforms were passed (many of which are contained in PA 07-185, as amended by June special session PA 07-2), including increased consumer access to important health care cost and quality data through the Office of Health Care Access.

However, there remains strong reason for trepidation. With the legislative creation of two new state authorities charged with considering a future government-run health care system and various advocates vowing to renew their efforts toward achieving this goal, Connecticut may be facing a “perfect storm” where the future of our employer-based health insurance is in jeopardy.

For more information, contact CBIA’s Eric George at 860-244-1921 or georgee@cbia.com.