Cost and Risk of SustiNet Too High (Even in a Good Economy)

As the 2011 legislative session winds down, lawmakers still have a lot on their plates–from including finalizing the state's budget to myriad other issues.

Even so, the Universal Healthcare Foundation of Connecticut continues to push for a health insurance public option in the state.

Known as SustiNet, HB 6305 would open state-run health plans to private individuals and companies under a self-insured system.

There are many problems with this concept.

First, it's too costly. The legislature's Office of Fiscal Analysis estimates that at the very least, the proposal would cost hundreds of millions of dollars. The price tag could jump even higher if high risk/cost individuals join the state plan. Under the bill, the state would be obligated to pay all of the medical claims of SustiNet’s participants.

Second, the plan is not likely to comply with federal healthcare reform.

This is because federal reform (which requires states to set up their own health insurance exchange marketplaces) allows only fully licensed health insurance products to be sold through these exchanges.

Self-insured products—such as SustiNet–are not fully insured and likely would not be able to be sold through the exchange.

Gov. Malloy has urged the legislature to focus not on SustiNet but rather on implementing federal reform. He cites its risky cost and power shift. (HB 6305 would transfer healthcare decision-making authority from the executive branch to a new quasi public authority with little or no accountability to Connecticut's taxpayers.)

With the state still reeling from its economic downturn, we can’t afford such a costly and risky endeavor now. In fact, even in good economic times, SustiNet would be too expensive for the state to undertake.

We strongly agree with Governor Malloy that SustiNet should be shelved.