This year the bill, which would allow municipalities, small businesses, and nonprofits join the state employee health insurance pool, is back.
Speaker of the House Chris Donovan, D-Meriden, said Monday that this year’s bill is different because it looks at self insuring the state employee health insurance pool.
By self insuring the state employee pool, proponents of the bill say the state will save money immediately, keep premiums down, and insure more people. However, a few things will need to happen in order for the state insure itself.
The coalition of state employee unions would need to agree to it, and the state would need to negotiate an administrative services agreement with insurance providers.
Its current contract with three insurance providers doesn’t expire for another two years, but state Comptroller Nancy Wyman said the state could give those companies 60 days notice to terminate the contract and immediately save $64 million. She said terminating the contract is a decision lawmakers will have to make as they weigh the projected cost savings with the predictable costs in the current contract.
Wyman said she did not have an opinion on whether the state should or shouldn’t chose self insurance, but she did say Connecticut is an “odd duck” because many states and large companies self insure their risks.
Robert Genuario, Rell’s Budget Secretary, said the administration does not oppose the concept of self insurance, however, lawmakers will have to consider the state’s current contract with its three current insurance providers. He said the current contract for full-insurance includes a cap on the amount the companies can charge the state for the next two years and switching to self-insurance may drive up the rates.
Both Wyman and Genuario were against allowing small businesses and nonprofits to join the pool. Wyman said she’s supportive of including municipalities, but “it’s not good to take on everything at once.” Genaurio said he is more concerned about the risk the two groups may present.
He said that if the bill doesn’t individually rate groups coming into it, then it runs the risk of subsidizing the costs of individuals or companies that currently pay a lot of money for health insurance. He said the individuals and companies that don’t currently pay a lot of money for health insurance will not seek to join the state pool.
“No state has opened up its pool to small businesses and few if any have opened it to nonprofits,” Genuario said. But he added that if the idea is to attract young healthy people to the plan and they’re currently going without insurance, “then I’m not sure why they would chose to pay for a more expensive product.” He said there are currently small business plans that offer much lower rates than can be offered by the state under this plan.
Rep. Elizabeth Ritter, D-Quaker Hill, and Rep. Elizabeth Esty, D-Cheshire, took exception to Genuario’s comments regarding lower insurance rates for small businesses in the private market. Both lawmakers said that’s not what they’re hearing from small business owners.
“In fact, what I’m hearing is quite the opposite—that an inability to provide affordable, quality health care is the single biggest obstacle to attracting talented people, keeping people
employed, and growing their businesses,” Donovan said in a statement Monday afternoon.
Genuario made it clear that he doesn’t think the pooling bill will decrease the number of uninsured in the state. “We want to be clear that this bill does nothing for those that can’t afford insurance in today’s market,” he said.