Expanded state health plan potentially costly, risky

(May 9, 2008) With health care costs a major concern to Connecticut businesses, the legislature approved a measure (HB-5536) that fails to address the real factors behind rising costs, but pushes the state closer to a fully government-run, taxpayer funded — and very expensive — health care system.

Lawmakers approved opening the very rich state employee health plan to municipalities and small businesses, under the guise of “cost-savings.” But the new pool is unregulated, requires a three-year lock-in, and has potentially significant state budget implications. It also does nothing to address the factors behind the rising costs of health care, promising only to somehow reduce administrative costs.

But municipalities that decide to participate in it likely will pay lots more for health insurance, as a study of the plan by the state’s Office of Policy and Management showed. And people “covered” in the system will actually be left vulnerable by being outside the state’s protective insurance laws.

If companies and municipalities joining the pool don’t find the promised savings, it will be too late: they will be locked in to a three-year commitment that takes away their ability to shop for better rates.

Supporters of HB-5536 have said that the measure’s intent is to bring Connecticut a step closer to a government-run, taxpayer-funded health care system. The business community is encouraging the governor to recognize the problems with this system and veto the measure.

Positives
One beneficial reform gaining approval allows cities and towns to group together to purchase health insurance, which will enable them to better handle their health care and property tax burdens. This is a good measure, but it was incorporated into the harmful purchasing-pool bill.

Many cost-increasing proposals were defeated or simply not acted upon. These included measures to tax Connecticut companies to pay for health insurance or fund new health care programs; mandate new health insurance coverage; and plans to shift, not reduce, health care costs.

For more information about health care measures this year, contact CBIA’s Eric George at 860-244-1921 or eric.george@cbia.com.