Public employee unions and health care advocates are putting the pressure on Republican Gov. M. Jodi Rell to sign a bill that would allow municipalities, nonprofits, and small businesses to join the 200,000-member state employee’s insurance plan.
During a conference call last Thursday, lawmakers, advocates, and academics talked about the benefits of the bill, which they said will increase the state’s bargaining power and lower risk through the creation of a larger insurance pool. But most of the insurance companies that currently administer the state insurance plan aren’t buying into Majority Leader Chris Donovan’s logic.
Donovan likes to call the bill “a no brainer,” but big insurance companies like Anthem are not enthusiastic about the idea.
In an April 17 letter to lawmaker’s Anthem’s President David Fusco wrote, “We believe that only those groups whose underlying utilization and cost structure are higher than the current State of Connecticut employee population will ultimately be attracted to the plan. The result of this change in population and claims cost will undoubtedly elevate the cost of the State of Connecticut employee health plan.”
Donovan countered Thursday that if Anthem is not interested there are other companies like United Health that are interested.
Professor Jacob Hacker from Yale University said insurance companies are going to be worried about to what extent there would be adverse selection if groups of individuals currently not covered by the plan were allowed to join. However, he said, the bill includes provisions to allow for the evaluation of risk.
Donovan said the average age of employees currently in the state employees plan is 48 years old. “That’s high,” he said. He said bringing in new groups would lower the age and lower the risk to insurance companies.
Lynne Ide of the Universal Health Care Foundation of Connecticut said the bill would encourage competition, which “is stifled right now.” She said the bill’s biggest opponent, the Connecticut Business and Industry Association, has a self-interest in the seeing the bill die because it sells insurance to small businesses.
“The business community will ask Gov. Rell to veto the health care bill because it doesn’t address the key issue of rising health care costs,” CBIA said in its summary of the legislative session. “Real health care reform will reduce cost drivers, improve the quality of care and provide the uninsured access to health care. Businesses and state residents alike believe the health care system should remain mainly in the private sector.”
Ide said she doesn’t believe the bill’s intent, as portrayed by CBIA, is to establish a full governmental takeover of the health care system.
Secretary of State Susan Bysiewicz said small businesses are enthusiastic about the plan because many that offer insurance to their employees are paying high premiums. She said one business she spoke to pays $12,000 a year for an individual employee and $25,000 a year for family coverage. She said under the state plan they would be paying $5,000 for an individual and $12,000 to $13,000 for a family of four.
Donovan said early on he tried to get the governor’s staff on board with the idea of expanding the state employees pool and they sounded interested, but then he never heard back from them. He said he would continue to encourage them to sign the bill.
Rell has not yet received the bill, but Donovan anticipates that it will reach her desk sometime after the Memorial Day holiday. Once Rell receives it she has 15 days to decide whether to sign it.
