Unions Join Growing Opposition to State-Run Healthcare Plan
With the 2021 legislative session coming to a close in three weeks, opposition to SB 842, which includes a proposal to create a state-run public health insurance option for small businesses, nonprofits, and unions, is growing fast.
Earlier this week, the Uniformed Professional Fire Fighters Association, which represents 4,000 career firefighters across the state, sent a letter to legislative leaders expressing opposition to the public option proposal.
“The UPFFA respectfully and strongly opposes SB 842 and its ‘one size fits all’ state-run plan and because of the long-term negative impact it will have on our members and the Connecticut marketplace,” UPFFA president Peter Carozza wrote in the May 4 letter.
UPFFA currently offers a medical benefit plan to members through the Northwest Firefighters Trust. The trust launched in 2013 and is administered by and for the firefighters around the country.
Carozza touted the plan as a success for its members as it is administered by and for firefighters across the country and is able to contain costs effectively by creating a “like risk” pool of firefighters across the country.
The UPFFA letter follows a letter sent to legislators by the Connecticut Teamsters Local Unions in March.
The Teamsters urged lawmakers to table the bill because it would “create a troubling state-run government plan that will have no set reserve requirements, no audit or insurance accounting rules, allow for cross subsidies in the pool and bring in individuals with the worst underwriting experience through an artificially subsidized low ‘introductory’ rate.”
Citing the problematic financial state of the state-run plan for municipalities, the Teamsters wrote that the plan “is suffering from troubling fiscal performance and uncertain actuarial outlook.
“The partnership plan lost $31.9 million in fiscal 2019—more than triple the $10.1 million in losses recorded the previous year. The medical loss ratio (MLR) for those years was 108.5% in 2019 and 105.2% in 2018.”
‘Math Doesn’t Work’
The public option proposal also was also opposed by Hearst Connecticut Media’s editorial board on Wednesday. Hearst is the largest news organization in the state.
Hearst initially supported the plan earlier this year, but due to rising concerns and an increase in opposition over the last three months, the editorial board reversed that endorsement.
Citing expensive plan designs, lack of transparency and regulatory oversight, and the Partnership Plan’s history of multi-million dollar deficits, Hearst concluded that “the math just doesn’t work. It’s hard to see how taxpayers don’t end up with the bill.”
“Strangely, very little information on the Partnership Plan or the State Employment Plan are available publicly,” Hearst noted.
“It took the crowbar of the state’s Freedom of Information Act to pry loose that information. The records show that Plan 2.0 had a deficit of nearly $32 million in fiscal 2019, the last normal year for insurers.
“Who covered that deficit? Taxpayers.”
SB 842 is currently awaiting action in the Senate.
The Insurance and Real Estate Committee amended the bill before approving it in March, adding much-needed consumer protections, regulatory and fiduciary oversight, and creating a more even playing field with the private sector.
However, State Comptroller Kevin Lembo, who administers the municipal plan and is a prominent supporter of the public option proposal, criticized the committee’s action and said he would work to restore the bill’s original language.
Gov. Ned Lamont has stressed his opposition to any state-run healthcare proposal that puts taxpayers at risk.
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