Gov. Malloy and Democratic leaders in the General Assembly have reached a deal on the SustiNet healthcare plan (HB 6305). Though the name is the same, the new plan is very different from the original proposal.

As originally envisioned, SustiNet created a first-in-the-nation health insurance public option -- dramatically and expensively expanding government control over healthcare in Connecticut.

However, according to reports on the legislative deal, the new SustiNet plan will open the state employee health plan to cities, towns and nonprofits, but not to small private-sector businesses, as another, smaller-scale proposal (HB 6308) would have done.

New scenario

Under the new SustiNet scenario, the state still faces a sizable financial risk associated with expanding the self-insured state employee plan.

When a self-insured system is opened up to unknown populations, there is no way to anticipate just who will participate in it. If the expanded population’s risk profiles turn out to be older and less healthy than the state employee pool, then the costs will be less predictable and potentially much higher.

However, since the revised SustiNet plan will not be open to private-sector employers, there will be less risk to the state.

Fiscally prudent

All said, the deal struck by Gov. Malloy and Democratic legislators and the changes they’ve made to SustiNet are fiscally prudent and a significant improvement.

Ina recent editorial, officials from Gov. Malloy's administration cited the massive costs of the original SustiNet plan (between $4 million and $6 million annually to operate, and at least $250 million to $478 million annually for the portions of the bill that have been priced). They also pointed out that it would be run by an authority with almost no accountability to the state or its taxpayers.

CBIA agrees with Gov. Malloy’s concerns with SustiNet and his belief that the state should focus on real health reform and work diligently toward implementing federal health reform changes.

Connecticut needs true, commonsense healthcare reform that comes not from giving more control to state government but from strengthening the state’s market-based, employer-sponsored system. Reducing costs, increasing access to health insurance and improving the quality of care are the keys to true reform.