Lawmakers’ Response to Belt-Tightening? More Cost-Drivers
Across Connecticut and the U.S., individuals, families and businesses are still tightening their belts and doing more with less as their finances and the economy struggle to recover.
Despite this, in the opening week of the 2011 legislative session, lawmakers introduced numerous proposals to increase healthcare costs.
More Mandates, More Costs
Most of the proposals are coming in the form of yet more health insurance benefit mandates that require certain policies to cover various services. Unfortunately, with more mandated coverage comes greater cost: In healthcare, you simply can’t buy more and pay less.
Mandates also do not treat or impact all businesses equally. In fact, nearly all large employers can avoid the added costs because those companies are self-insured and the mandates don’t apply to them. So smaller employers, who usually purchase insurance, are impacted by these mandates, bear the burdens of the higher costs.
So far, just one week into the 2011 session, there are a half dozen proposed new or expanded healthcare mandates (SB-10, SB-12, SB-13, SB-20, SB-21 and HB-5032). All of the proposals will soon be considered by the Insurance Committee.
Another cost-raising proposal is the SustiNet Health Plan, which would make numerous changes to Connecticut's health insurance laws. Most notably, SustiNet would create a state-run health insurance plan that competes against the private sector as a state-run public option.
While the precise cost of SustiNeti is still unknown, its mission is clearly ambitious: ultimately to be available to every individual and company in the state. And its likely benefit levels are also ambitious, to be modeled after Connecticut's expensive public health insurance plans, including the state employee plan.
SustiNet's financing model is also aggressive in that it would pay for all of these coverages through a state-run self-insured system, removing the need to pay health insurance premiums but requiring the state to pay for all medical claims.
At a time when Connecticut faces a massive budget deficit and crippling unfunded liabilities in state employee health care and pension obligations, creating another unfunded liability is a move in the wrong direction.
With the myriad mandates and the SustiNet proposal gaining traction so early in the session, there is real reason to be concerned that the actions of the legislature may result in increased healthcare costs.
However, there is ample time for the General Assembly to heed the advice of the business community and reject these proposals.
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