How CT Implements Healthcare Reform Impacts Economy

As state lawmakers move ahead to implement federal healthcare reform, what they ultimately decide could have a critical impact on Connecticut’s struggling economy.

How they choose to develop the newly required health insurance marketplace (called an exchange), for example, could either help stimulate Connecticut’s economy or stifle it.

Governor Malloy’s administration has come out in strong support of SB 921which would start the process to establish Connecticut’s exchange. Although the bill is still in its early stages, it is positioned to promote a private-market-based exchange.

CBIA strongly urges policymakers to follow that path. Strengthening the private marketplace would help the state avoid shedding any more jobs and could actually promote the growth of the market and new job creation. Gov. Malloy’s support of SB 921 indicates that he shares this goal.

Early deadline

Connecticut has until 2014 to put its exchange in place. However, the first deadline is actually much sooner. By Dec. 31, 2012, states have to pass muster with federal regulators by having simplified insurance offerings, a standardized application and a consumer-friendly online presentation.

The total cost of the exchange remains unknown. However, it’s likely to include sizable administrative, systems and marketing costs. Given Connecticut’s fiscal crisis and need to make state government more affordable and effective, it will be critically important to know the full cost impact.

SustiNet cloud

Further complicating the picture is the SustiNet healthcare system (HB 6305) that lawmakers are moving ahead to create.

SustiNet’s advocates also want the plan to operate both within and outside of the new health insurance exchange. The problem is, they also want SustiNet to be a self-insured program—but only fully licensed plans will be allowed to be sold within the exchange.

Either the federal government would have to make an exception for SustiNet, or the plan itself would have to be fundamentally modified.

Commonsense, realistic health reform doesn’t lie with more government control. Rather, it lies in strengthening our market-based, employer-sponsored system.

Gov. Malloy is well on the way toward realizing this goal by supporting the framework for an exchange that nurtures and bolsters our private-market-based healthcare system.