Healthcare Costs on the Rise

Issues & Policies

Last week in a 30-5 vote, the Senate passed SB 811, which aims to overhaul many aspects of Connecticut’s healthcare landscape but carries big questions on cost.
The bill now consists of a 90-page amendment that calls for the state’s health insurance exchange to develop a new website to give consumers information about pricing and quality, hospital and practice mergers and acquisitions, facility fees, provider notices, electronic health records and negotiation practices among other topics.
There’s a lot to digest in this single, late-session bill and much of it will dramatically impact healthcare delivery in Connecticut.
Many of the concepts came from meetings held last summer by the Hospital and Healthcare Roundtable, a bipartisan effort co-sponsored by Senators Martin Looney (D-New Haven) and Len Fasano (R-North Haven).
For example, a website on cost and quality is certainly a good idea–but how will it be paid for?
SB 811 comes a time when many other healthcare initiatives are already under way, such as the State Innovation Model (SIM) that addresses payment reform, and the All Payers Claim Database (APCD) that is set to tackle cost and quality transparency.
It’s important to remember that smaller businesses are funding the SIM through a $3.2 million assessment included in their premiums.
What’s more, small employers and individuals are funding Access Health through an assessment included on their health insurance plans, whether or not they use the state’s exchange. This assessment totals $40 million.
And just this week, the board voted to increase the assessment from 1.35% to 1.65% starting next year.
If Access Health has to develop the website as called for by SB 811, this very complicated and costly process is likely to drive the assessment up even further.
And that means the new website that’s supposed to monitor costs will itself be a reason for higher costs.
Instead of funding this initiative through another assessment on small businesses, it should be pursued through other initiatives or funded through the state’s General Fund.
More costs
SB 1085 proposes a new health benefit mandate that will mean higher costs for the state, fully insured municipalities, and smaller employers.
Before Obamacare took effect, the feds required Connecticut to set a benefit package for the state’s exchange that cannot be changed until 2016. Any new benefit the legislature mandates must be paid for by the state–meaning from the General Fund (for the subsidized population).
What’s more, SB 1085 means the state is forcing smaller employers to add even more benefits to their health plans, which means higher premiums.
The Appropriations Committee approved SB 1085 despite its budget impact; it’s now in the Senate.
Finally, SB 913 is yet another cost-driving bill that allows municipalities (and non-state public employers like a housing authority) to pool their healthcare plans with the state plan.
If a municipality joins the pool it will be locked in for three years and cannot get out even for financial reasons. The pool may come without some protections, such as stop-loss coverage, as available in other self-insured plans.
SB 913 also allows the state comptroller to pick and choose the “good risk” meaning healthy people get in while the not so healthy will need to go elsewhere.
This may cause price spikes for certain plans such as retiree plans that municipalities must also purchase and therefore lead to higher local costs and eventually higher property taxes. Both Chambers have approved this bill and it is now on the Governor’s Desk.
This bill should be rejected by the Governor so it does not drive costs even higher.
For more information, contact CBIA’s Jennifer Herz at 860.244.1921 | | @CBIAjherz


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