Attorney General Richard Blumenthal released an opinion Tuesday saying that threats made by insurance companies to increase rates to the state employees health insurance plan are unfounded.
Blumenthal said that a bill expanding the state employees health insurance plan to nonprofits, municipalities, and small businesses will create an entirely new pool of individuals, separate from the pool of state employees covered by the pending contract. At a press conference Tuesday morning he said the three health insurance companies that bid on the state employees health insurance plan are legally bound to adhere to the rates they offered in those bids.
Blumenthal said the insurance companies have “no right to raise charges to the state of Connecticut,” and “the state can not unilaterally expand the pool of insureds.”
“Clearly, any mandatory inclusion of significant numbers of new individuals or entities in the existing health insurance pool would be materially different from the RFP and would violate state bidding procedures and state law,” Blumenthal wrote in his opinion.
Anthem Blue Cross & Blue Shield President David Fusco wrote earlier this month that his company would have to raise its rates for the state by 4 percent, or $24 million, if the law to expand the current pool passes. The letter cites, without details, “actuarial calculations” that assume “an adversity in mix and utilization”—in other words, a widened pool would include more unhealthy people.
Tuesday was the first time the idea of two pools has come up in discussions about the bill. Initially the idea was to use the bargaining power of the more than 200,000 lives already covered under the state employees health insurance plan to get better insurance rates for nonprofits, municipalities, and small businesses.
So if there are two pools how can there be bargaining power?
Majority Leader Chris Donovan, D-Meriden, the bill’s main proponent, said there is at least one insurance company willing to offer the same benefits and rates to the new pool of individuals. “The benefits would be the same. The rates would be the same,” Donovan said Tuesday. “We know there’s one insurer that is very interested,” he added.
Gov. M. Jodi Rell has expressed concerns about the bill, which has yet to reach her desk. She has said she’s concerned about the potential increase in rates to the state, at the same time as the state’s deficit continues to grow.
“There is no legal or practical reason to veto this legislation because of an unfounded fear of legally tenable charges,” Blumenthal said in his opinion.
“The governor joined me in standing up to the insurers when they broke state laws requiring full and fair disclosure of health insurance provider rates and other important records. I ask her to stand strong again and reject these legally unfounded, unfortunate threats from the same insurers, who seek to distract and deceive her and Connecticut citizens,” Blumenthal said.
