MassHealth woes provide a warning to Connecticut

(March 28, 2008) Problems with a new state health plan in Massachusetts should serve as a warning to Connecticut lawmakers as they consider reform legislation. The Massachusetts system is burdened with higher-than-anticipated costs and likely increases to employer tax contributions.

Even though the 2009 Massachusetts state budget allotted $869 million for the new health plan, costs are significantly greater; the plan’s board of directors recently voted unanimously to raise premium contributions by 10%.

As our neighbors are discovering, trying to move to a universal health care system without first addressing the factors driving up costs does not solve the problem. The fact is, medical care — comprising 85% of health care costs — is expensive regardless of who pays for it. Until policymakers tackle the core cost-drivers of health care, it simply will not become more affordable or more accessible.

Also alarming in Massachusetts is that the plan’s board is seriously considering increasing the employer tax under this new health care system. Currently, employers that do not spend enough on employee health insurance must pay $295 per employee per year. Now claiming that this tax has not raised as much revenue as desired, the Commonwealth is thinking about upping the employer ante.

This should not be a surprise — once any tax is put in place, it will be increased if revenue projections are seen as insufficient.

Connecticut should learn from these lessons. First, we must reject efforts to impose any massive state overhaul and takeover of the health care system. According to Zogby International, 75% of Connecticut residents say a better way to reform health care would be to make private insurance more affordable.

As the Massachusetts health care experiment struggles, Connecticut lawmakers should watch carefully in order to avoid making the same mistakes. For more information, contact CBIA’s Eric George at 860-244-1921 or eric.george@cbia.com.