HB-5536:
State health care purchasing pool proposal too costly

Status: House has approved; awaiting action by the Senate

(May 2, 2008) HB-5536 would expand the state employee health care plan to municipalities and small businesses.

HB-5536 is harmful because it:

Creates an unregulated health insurance purchasing pool that will be sold to small businesses without providing them with the protections of the state’s beneficial insurance rules.

Requires participating companies to “lock in” to a three-year commitment without any rate-lock guarantee.

Does nothing to reduce claims costs — or medical-care costs, which are the primary drivers of health care costs. The cost of health care is rising and this proposal won't turn the tide.

Could actually increase state health care costs. Two of the three health insurance carriers that recently bid on the state employee health plan have said that they will immediately re-bid their rates if this bill passes.

Could drive up taxes, including local property taxes, as a result of higher health care costs for municipalities and administrative costs for the state.

Opens the door to a government-run, taxpayer-funded health care system in Connecticut, which — according to estimates last year — could potentially cost taxpayers up to $17 billion annually.

What’s more, the state’s unfunded liability for state employee and retiree health care is almost $22 billion, and every year the state underfunds Medicaid reimbursements to hospitals by over $300 million. This is a poor track record on which to start a new state-run system.

HB-5536 should be rejected because it does not significantly reduce the costs of health care and locks participants into an unregulated system for a three-year period.