The so-called public option—essentially government-run healthcare—has resurfaced in a number of legislative proposals now before the 2019 General Assembly.

The public option idea is an old one, dating back at least two decades, with a controversial appearance during the 2009 federal Affordable Care Act debate.

And the idea continues to resurface, despite being shelved on numerous occasions—no state in the country has implemented it—usually because of the large and uncertain burden a public option plan imposes on taxpayers.

Nonetheless, Connecticut lawmakers are considering at least a half-dozen public option bills this session, including a Medicaid buy-in plan and another expanding access to the state employee healthcare program.

Details of those plans have yet to be released. However, given the history of public option proposals, businesses and consumers have plenty to be concerned about.

Public option plans can set whatever prices government chooses, with their marketing and operational strength backed by the state's regulatory and legislative power.

The true costs of a public option program may not be readily transparent, as it can be subsidized by taxpayers.

In other words, state government—which sets many of the rules for healthcare coverage—competes on an unfair playing field with the private sector, which it regulates.

'Subsidized by Taxpayers Endlessly'

During the 2009 ACA debate, then-President Barack Obama recognized the "legitimate concerns" of private insurers who couldn't compete with a public option "subsidized by taxpayers endlessly."

Those concerns aren't any less legitimate now.

Connecticut's state-run health insurance exchange, Access Health CT, covers about 111,000 people through individual and small group plans.

Premium costs for an estimated 71% of those enrolled in exchange plans are subsidized. In 2017, the average monthly subsidy was $438.99.

Government can hide the true cost of a public option, pushing below-market premiums while taxpayers pick up the tab.
Access Health CT's operating costs are funded through a 1.65% assessment on all individual and small group premiums, whether sold on or off the exchange.

That assessment, last raised in 2015, adds around $139 annually to an insurance policy with a $700 monthly premium, and is one of a number of factors driving up the overall cost of healthcare in Connecticut.

The ACA's mandatory covered benefits, along with those imposed by state government—Connecticut has the largest number of healthcare mandates in the country—are also key factors driving up healthcare costs.

Public Interest

The public interest would be better served if lawmakers tackled those issues rather than pursue a path that expands government, increases taxes, and threatens one of the state's critical economic sectors.

Connecticut's insurance industry contributes $14 billion annually to the state's GDP—9% of total economic output—and employs over 60,000 people in well-paying jobs.

The state leads the nation in insurance payroll as a percentage of total wages and benefits, while each insurance job has a major multiplier effect, generating another 2.32 jobs.

History shows that public option plans don't work.

Connecticut's economic recovery still trails the region and the country—lawmakers should avoid a path that hits business and residents with more tax hikes, fails to curb healthcare costs, and stifles one of the state's main economic drivers.


For more information, contact CBIA’s Michelle Rakebrand 860.244.1921 | @MRakebrand