Give Me an "H"

Hundreds came to Hartford Tuesday to support true universal health care and it wasn’t long before it became obvious that they didn’t turn out for the “near universal health care” proposed by four House Democrats last week.

The proponents of HB 6652, mostly insurance companies and HMO’s, called it a “fair and balanced” approach to increasing the number of insured in the state. What they liked was that it maintains the insurance industry market, institutes preventative care programs and increases Medicaid reimbursement rates. Opponents of the bill say it decreases access through a hefty 3 percent provider tax and preserves the market for insurance companies that profit off the current system at the expense of consumers.

State Rep. John Geragosian, D-New Britain, asked the two insurance executives who testified in favor of the bill why should legislators and the public trust the market-based insurance industry that got us to this point. David Fusco, president of Anthem Blue Cross and Blue Shield in Connecticut, said, the insurance industry is coming up with innovative ways to cover many of the uninsured and small business owners in the state. Fusco said it’s unfair to compare the administration of Medicaid with the administration of commercial insurance companies, like Blue Cross and Blue Shield. Geragosian followed up with a question about what is considered an administrative cost?

“Is advertising considered part of your administrative costs?” Geragosian asked.

Fusco said advertising is part of our administrative costs. And what about those skybox seats Geragosian wondered outloud. ConnectiCare CEO Mickey Hebert said there are other wellness and chronic disease programs his company administers that count towards the administrative cost of the insurance, which he estimated at about 16 percent. Medicaid’s administrative costs are around 3 percent. Hebert said if you stripped out all programs and limited their business to claims administration then the costs would be much lower. He said he would get back to the committee about what percentage of the administrative costs are tied to the programs.

Hebert said his company makes about a 3 percent profit, or $25 million a year while it spends about $750 million a year. “The market based system in this country has served us well,” Hebert said.

Other opponents of bill 6652 included doctors like Dr. Malcolm Gourlie of East Haddam. He said when he started his practice there were three other doctors in town and now he’s the lone primary care practitioner. He said levying a tax on providers is like taxing teachers to teach and firefighters to fight fires. The Connecticut State Medicial Society said there are about 28,000 doctor offices in the state and about 70 percent employ fewer than 10 full-time employees. Gourlie said doctors understand how difficult it is for small business owners to offer health insurance to their employees because most of them are small business. He said this bill as written would cost him the salary of one of his four employees.

A More Universal Plan Unfolds

Majority Leader Chris Donovan, D-Meriden, voiced his support for SB 1371 Tuesday at the start of the public hearing. He said when asks the public what a good health care plan looks like they often point to the state employees health insurance plan. However, if you want a similar plan, such as the single-payer type plan proposed in 1371, there’s going to be a cost associated with it, Donovan said.

The single-payer system would create a single state-administered health plan for all state residents and coverage would be provided by multiple insurers. Initial cost estimates show single-payer plan would redue overall health care spending by about $500 million, but just how much it will initially cost is a subject up for debate.

Stan Dorn, a senior research associate at the Urban Institute in Washington DC, suggested the state have employers pay an amount equal to 12.43 percent of payroll above $265,000 a year and individual contributions would be based on income. Click here to see the rest of his testimony on 1371 and 1349, which is a bill for a purchasing pool model.