2008 session in review:

State employee health plan offers mirage of savings

(May 20) The future of health care in Connecticut is murkier after state lawmakers approved a plan that has the business community concerned and should make taxpayers uneasy. Little was done in the General Assembly this year to address rising health care costs — but a big step was taken to put taxpayers at risk of even higher costs.

Expanding state plan
The biggest concerns center on the approval of a health insurance purchasing pool (HB-5536) that promises savings to small businesses and municipalities. This is an illusory promise, however, because large health insurance purchasing pools, at best, have a limited ability to reduce administrative costs. More important, they do not significantly affect the cost of health insurance, which is the biggest barrier to coverage.

Groups in the purchasing pool will have to commit to three-year contracts without any rating guarantees or the ability to shop for better rates. Locked out from potentially finding better rates and faced with the likelihood of higher health insurance costs, municipalities in the program could be forced to seek local property tax increases to fund the higher costs of the rich state employee plan.

Lawmakers simply bypassed those concerns to approve a health care system that lacks consumer safeguards, takes the first step toward a complete government takeover of health care in Connecticut, and holds the potential to be very costly to taxpayers. 

They also overlooked these key points:

• State employee health plans are generally more expensive than those in the private market.
• This plan could add to the state budget deficit, since the three participating insurance carriers have said they will rebid their rates if this proposal becomes law.
• Administering this new government-run system will cost taxpayers at least $500,000, which has not been budgeted.

CBIA is urging Gov. Rell to veto this measure as harmful to Connecticut’s business community, taxpayers and economy.
 
Health care taxes
Two other proposals (HB-5498 and SB-473) would have imposed new taxes on employers to fund health care and health care programs. Neither measure addressed the spiraling cost of health care, which is the real barrier to health care access. Fortunately, neither was enacted into law.
 
Mandates and other cost-drivers
More attempts to add and expand government-mandated health insurance benefits were again a focus of this past session, as were other efforts to increase costs or shift who pays for them. Fortunately, nearly all of these efforts were defeated, with only one new mandate (HB-5696) gaining the approval of both chambers.

 
Positive health care reform
Lawmakers approved one positive health care reform measure this year and considered many others. SB-681 establishes the Commission on Health Equity, which seeks to eliminate disparities in health status based on race or ethnicity, and improve the quality of health for all people in the state.

Other proposals that held promise but ultimately failed included those that would have allowed the sale of reduced-mandate plans and required a cost-benefit analysis of each coverage mandate (HB-572, HB-5709 and SB-166); allowed municipalities to collaborate to purchase health insurance (HB-5710, incorporated into HB-5536); established wellness tax credits for small businesses (SB-311); promoted the use of electronic medical records (SB-635); and addressed hospital financing, work force and utilization issues (HB-5038).

Overall, the 2008 session gave businesses more reason to be concerned than reassured about the state of health care in Connecticut. For more information, contact CBIA’s Eric George at 860-244-1921 or eric.george@cbia.com.