Committee Rejects, Approves Healthcare Cost-Drivers

In the ongoing battle to rein in healthcare costs, the legislature’s Appropriations Committee has given Connecticut’s small businesses reasons to be pleased and concerned. This week, the committee rejected–but also approved—proposals to increase healthcare costs.

Known as health benefit mandates, these proposals require fully insured health plans to cover various services.  While each mandate helps certain consumers, it also increases the cost for everyone with fully insured coverage

These premium hikes harm Connecticut’s small employers the most, because small businesses generally have no choice but to buy fully insured plans.   

There's another risk with mandates. Federal health reform requires that if a state adopts any mandated benefit that goes beyond the benefit levels of what the law calls an “essential benefit plan,” then that state has to pay for the cost of the mandate.

Since the federal government hasn’t yet defined what makes an “essential benefit plan,” state lawmakers are rolling the dice with each new or expanded mandate they adopt. If a mandate pushes the state beyond the “essential benefit plan” then Connecticut will be left paying the bill.  

The Appropriations Committee seemed to understand the cost implications of more mandates, but, oddly, applied that knowledge inconsistently.

Most important, the committee either defeated or chose not to act on  the following five cost-drivers:

• SB-12 – Prohibition on copayments for preventive care services
• SB 13 – Prohibition on copayments for certain drugs
• SB-1048 – Dental care mandate
• SB-1084 – Non-preferred brand name drug mandate
• SB-1085 – Colonoscopy mandate

However, the committee approved the following:

• SB-10 – Breast MRI mandate
• SB-21 – Clinical trials mandate
• SB-396 – Prostate cancer screening and treatment mandate
• SB-879 –  Eye drops and dependent dental mandate
• SB-1083 – Pain management prescription mandate

Each of these mandates (both those that were approved and those that were rejected) carry fiscal notes that indicate that they will increase costs to the state or its municipalities. (Fiscal notes estimate only the cost to the state, not to private-sector businesses or individuals.)

Easily, the cost of mandates to private-sector companies and individuals will be much higher, as many more people participate in private-market insurance plans.

When the legislature votes to pass mandates, they are voting to increase the cost of health care – for both the State of Connecticut and its private sector employers alike.

While the committee actions have both good and bad consequences for small employers’ healthcare costs, CBIA urges lawmakers to understand the significance of their decisions on the operating costs of Connecticut companies. Businesses simply cannot hire people, grow and pay taxes if the costs of doing business in Connecticut are too high.