Even More Healthcare Fees in the Works

03.14.2014
Issues & Policies

With so much concern over the high cost of healthcare in Connecticut—and potential for new costs in the legislature–it’s helpful to remember how we got here. High healthcare costs are a result of many factors, some due to new federal healthcare legislation, but others due to state policy decisions. 

Obviously, the Affordable Care Act has delivered a host of new taxes and fees, including a $63 per person assessment to fund the Reinsurance Fund, and $2 per person fee for the Patient Centered Outcomes Research Institute (PCORI) fund. These fees and others are passed on to consumers in the form of higher premiums.

Connecticut has its own set of healthcare fees and assessments. 

The state’s exchange assesses the small group and individual markets 1.35% of premium to fund its operations. To put that into perspective that could mean about $39 per year for a single 31 year old and about $275 per year for a family of 4.*

In addition, self-insured businesses and insurance carriers are also assessed a fee–now totaling $30 million and up from $9 million not too long ago–to pay for the state's immunization system. 

Connecticut already has among the highest number of health benefit mandates in the country and the legislature continues to entertain even more. Each time lawmakers require more healthcare services and procedures to be covered, our premiums increase.

Another fee

And now, the midterm state budget adjustments call for another fee, this one to fund the State Innovation Model–known as SIM. While the goals of SIM–increasing quality while decreasing cost–are  good, the funding mechanism raises concerns.

The state plans to assess self-insured employers and insurance carriers more than $3 million. 

Not only does the new SIM assessment add to the pile of ever increasing fees, it charges only a portion of the market for something that will benefit the entire state.  What’s more, the state already applied for $40-50 million from the federal government to fund this initiative, and should find out this summer if its application is approved.

The larger concern, however, is that the $3 million price tag is just the beginning and that the SIM assessment will grow larger in future years. 

Adding all of these fees together quickly increases the healthcare price tag.  Increasing quality and decreasing cost is what we are all striving for  but the seemingly endless fees are counterproductive. 

While the state cannot modify the federal healthcare assessments, it can control fees such as for SIM. 

For more information, contact CBIA’s Jennifer Herz at 860.244.1921 | jennifer.herz@cbia.com | @CBIAjherz

*These numbers only represent estimates and are for example purposes only. Premiums change significantly based on the relevant rating factors.

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