A proposed state-run healthcare plan will destabilize the health insurance marketplace, require taxpayer and/or employer subsidies to cover losses, and threaten thousands of private sector jobs, CBIA president and CEO Chris DiPentima told lawmakers this week.

DiPentima and CBIA assistant counsel Wyatt Bosworth appeared before the legislature's Insurance and Real Estate Committee during a public hearing Feb. 9.

Spaced a COVID-19 appropriate six feet apart, CBIA's Chris DiPentima and Wyatt Bosworth told lawmakers small businesses had significant concerns with the proposed state-run healthcare plan.

The 12-hour hearing received more than 450 pieces of testimony on the public option healthcare bill, SB 842, with opposition to the controversial measure outweighing support by almost two-to-one.

DiPentima told the committee a survey of CBIA members last month found that "69% opposed the concept of a public option, with 57% saying they were concerned that taxpayers will subsidize plan deficits and almost 50% noting that they do not trust the state to manage health insurance plans."

DiPentima warned lawmakers of the potential negative effects the bill will have on Connecticut taxpayers, small businesses, and the insurance industry.

Echoing the concerns raised by CBIA members, DiPentima reminded lawmakers that the state-run municipal healthcare plan lost $31.9 million in 2019, more than tripling its losses from the previous year.

Oversight

He noted that the plan would be managed by the state Comptroller's office and not subject to the same Connecticut Insurance Department regulations that private carriers must follow, including financial reporting, minimum loss ratios, guarantee issue, and rate guarantees.

Pentima warned that future deficits were likely, with small businesses—the group advocates say the plan is designed to help—on the hook to cover those losses.

DiPentima also spoke about the potential for destabilizing the entire insurance marketplace as the legislation allows plan administrators to cherry-pick risk.

Unlike private carriers that are required by the Affordable Care Act to provide coverage to any small business seeking insurance, SB 842 gives plan administrators the ability to accept and deny applicants at will.

DiPentima called this "a recipe for destabilization by allowing entry into the plan groups with good risk while leaving those with bad risk in the private market. If this occurs, rates will rise significantly in the private market and add to the already burdensome premium costs."

Small Business Focus

In response to questioning from Sen. Saud Anwar (D-East Hartford), DiPentima said small businesses made up 95% of the organization's membership and were driving CBIA's response to the bill.

"You think I'm going to listen to 95% of my membership or 5% of my membership?" he asked. "I'm going to listen to the 95% that's under 100 employees."

DiPentima said small businesses made up 95% of the organization's membership and were driving CBIA's response to the bill.

DiPentima told Anwar he agreed with the senator's statement that "a business is only as good as their employees."

"What you said is true Senator," he said. "I am proud to say that in Connecticut, we have some of the greatest businesses because we have the greatest workforce in the world.

"Employers in Connecticut really care about their employees. I ran businesses in Seattle, in California, in France and I didn't see that love, that compassion, that embracing of employees like I see in Connecticut."

Alternative Solutions

When pressed by lawmakers to elaborate on CBIA's alternative solutions to the rising cost of healthcare, Bosworth called for a robust reinsurance program in lieu of broad-based assessments, a benchmarking program based on the successful Massachusetts model, and reforming the health benefit mandate process.

He noted that state fees and assessments are a major healthcare cost driver, adding about $591 to annual individual premiums in the fully insured market while state mandates account for more than $2,000 of an annual premium's cost.

"We're here to offer alternative solutions and work with you all. We can—and we have to—lower the cost of healthcare."

CBIA's Chris DiPentima

DiPentima reaffirmed CBIA’s commitment to work with lawmakers during this legislative session to address the rising cost of healthcare and insurance.

"Healthcare costs are a major, major, major issue for Connecticut businesses. We need to address that," he said.

"We're here—we're not here to say no, we're here to offer alternative solutions and work with you all. And there are some really good alternative solutions.

"We can—and we have to—lower the cost of healthcare."

CBIA Testimony

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For more information, contact CBIA's Wyatt Bosworth (860.244.1155) | @WyattBosworthCT