Survey: State-Run Healthcare Plan Sparks Small Business Concerns

More than two-thirds of Connecticut small businesses oppose state-run healthcare proposals according to a new CBIA survey.

Those findings contrast starkly with comments made this week by supporters of recently introduced legislation that would implement a public option program in Connecticut.

Advocates released polling data from a survey of 100 Connecticut small employers conducted by an out-of-state firm that works for Democratic Party candidates.

That survey claims 72% of surveyed employers support a state-run healthcare program.

However, a CBIA survey of 231 Connecticut small businesses, conducted last month, found 69% of employers opposed the public option plan introduced in last year’s legislative session.

The new Connecticut proposal is expected to be modeled on that legislation and a similar 2019 bill, which drew broad opposition and was later scuttled.

While 98% of CBIA small business survey respondents said they were very or somewhat concerned with rising healthcare costs, most expressed reservations with a proposed public option plan. 

Fifty-seven percent said they were concerned that taxpayers would subsidize plan deficits and almost 50% said they don’t trust the state to manage health insurance plans.

Taxpayers at Risk

CBIA’s Wyatt Bosworth said those concerns centered on the insolvency of the state-run municipal partnership healthcare plan, which lost $31.9 million in 2019, tripling its losses from the previous year.

Bosworth noted that the Connecticut Insurance Department would discontinue any private sector healthcare plan with the same 108.4% medical loss ratio as the state plan.

The state-run municipal healthcare plan lost $31.9 million in 2019, tripling its 2018 losses.

“There’s no doubt healthcare is a top three problem for businesses in this state,” he said.

“But surveys really show an overwhelming distrust of the state meddling with their healthcare insurance.”

When asked last November how losses would be addressed with the latest public option plan, Comptroller Kevin Lembo told reporters “the backstop is the state of Connecticut.”

Addressing Costs

This year a number of bills have been filed that provide relief to the thousands of small businesses across Connecticut that are struggling to address healthcare costs.

For instance, one bill codifies one of Gov. Ned Lamont’s emergency executive orders to build on progress the Office of Healthcare Strategy has made establishing cost-growth benchmarks.

Health Insurance Tax is in play this session. Read more here:https://t.co/y4Oz0GFcls

— Wyatt Bosworth (@WyattBosworthCT) January 26, 2021

Similar programs, like one in Massachusetts, have successfully identified cost drivers and have accountability measures in place if benchmarks are exceeded.

A second measure implements a state-backed reinsurance program to maximize federal reimbursement policies.

The state can allow for risk mitigation by providing additional coverage for catastrophic events, leverage pass-through funding through waivers, and provide immediate consumer relief. 

Assessments, Mandates

In addition, lawmakers must resist approving costly new mandated health benefits and pass legislation mandating health insurance benefit review.

Mandates continue to be a major driver of healthcare costs, adding more than $2,000 annually to individual health insurance premiums. 

Finally, the Connecticut Health Insurance Exchange must resist levying more assessments on fully-insured plans.

Mandates add more than $2,000 annually to individual health insurance premiums. 

Last year, state government assessments totaled nearly $100 million—including a public health assessment, contributions to the general fund, and supporting the exchange—in addition to the $209 million collected in premium taxes.

These charges drive up average per policy costs by $162.93 annually.

CBIA will continue to work with legislators on both sides of the aisle to bring much-needed relief to small businesses struggling to manage healthcare costs.

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For more information, contact CBIA’s Wyatt Bosworth (860.244.1155) | @WyattBosworthCT