A proposal to shift about $8.8 million worth of Department of Public Health programming into the state’s Insurance Fund is likely to cause insurance premiums to rise for families and individuals.

The concern with the proposed change in SB 955 is not about the type of programming being transferred, but the impact that the cost-shifting will have on insurance premiums. 

Transferring $8.8 million from the Department of Public Health to the Insurance Fund means that Connecticut’s health insurers will have to foot the bill. And in turn, they will pass along the additional cost in the form of higher premiums.

Lawmakers need to see the $8.8 million not as a single additional fee but just one of a stack of taxes and fees that are driving health insurance premiums:

  • State Innovation Model (SIM):  $3.2 million
  • Immunization Fund:  $32.7 million
  • Access Health Fee (to fund the state’s healthcare exchange):  $40 million
  • Federal Health Insurance Tax:  $8 billion
  • Federal PCORI Fee: $2 per person
  • Federal Reinsurance Fund: $63 per person

Concerns about these taxes and fees are not criticisms of any specific program—CBIA is supportive of the SIM initiative, for example—but how these programs are funded.

Funding for SIM also was recently transferred into the Insurance Fund. While this is a good program intended to focus on payment reform—benefiting everyone in the state—only a select group of employers are footing the bill. 

Like the DPH programs, SIM programs should be a state General Fund expenditure.

All of these taxes and fees increase the premiums paid by employers and their employees.

It’s important to remember that this additional $8.8 million is just one part of the Insurance Fund that will increase to $79.8 million in 2016 and $81.3 million in 2017.

CBIA urges state lawmakers to utilize General Funds, and not increase the already high Insurance Fund, for programs that benefit everyone in Connecticut. 

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