Leaders of several Chambers of Commerce said they are concerned that Speaker of the House Chris Donovan’s pooling bill would increase health insurance costs for small business owners.
Donovan’s bill, which was vetoed by Gov. M. Jodi Rell last year, would allow municipal employees, nonprofits, and small businesses to join the state employees health insurance pool.
John Leone, president of the Chamber Benefits Centers Leadership Cabinet, said Monday at a Capitol press conference that the group of more than 50,000 business owners believe everyone should have access to health insurance, but believe the way to do it is by imposing an individual mandate to purchase health insurance.
It should be noted that the Chamber Benefits Centers Leadership Cabinet was started by Chamber Insurance Trust and Connecticare, Inc., two groups that sell insurance.
Leone said health care reform and finding different ways to pool insurance risk “should be private sector driven.” He said he doesn’t think it should be left up to the public sector because already the government doesn’t pay its fair share of Medicare and Medicaid, which means costs are shifted to employer health insurance premiums.
Anthony Rescigno, president of the New Haven Chamber of Commerce, said the bill adds another layer of bureaucracy.
Anthony Assante, co-chairman of the legislative committee of the Middlesex Chamber of Commerce, said he wouldn’t save any money if Donovan’s bill were passed.
He said currently he pays $13,000 a year for his own health insurance, but if he were forced to join the state employees health insurance pool he would be paying $18,000 a year.
Donovan said currently the state employees have 12 different health insurance plans and $4,700 per year is the lowest premium paid.
In a press release sent out by Donovan’s office, Dan Russo, an attorney from Middletown said he pays over $36,000 a year in premiums to cover himself and his wife.
“Under the healthcare partnership bill, my annual premiums could be cut by at least half and possibly by two thirds of what I’m currently paying for my wife and myself for comparable benefits,” he said.
Russo said he previously explored purchasing coverage through his local chamber of commerce, but found its offerings to be unaffordable.
The legislature’s Office of Fiscal Analysis estimates that Donovan’s bill would produce a savings of $70 million in fiscal year 2010 because it would require the state to transition from being fully insured to self-insured, which means the state would act as its own insurance company.
Critics of Donovan’s bill say if the state wants to transition to a self-insured plan they need to have millions of dollars set aside to pay insurance claims. Something that wasn’t budgeted for in the Democratic budget proposal.
According to the fiscal note, the state would need to budget about $20 million per year for claims. In addition the fiscal note recommends that the state purchase $10 million of stop-loss insurance “for individual claims exceeding a set dollar amount.”
In a phone interview Monday evening, Donovan said when the state transitioned from a fully-insured to a self-insured prescription drug program it saved $17 million. He said the $20 million a year the state would need to set aside to pay claims would be collected from the more than 200,000 employees paying premiums. He said this would be done in real time, so no money would have to be set aside.
“It’s a voluntary, high-quality, low cost program,” Donovan said.
He said the individual mandate touted by the Chambers of Commerce is nothing more than a mandatory, low-quality plan with higher premiums.
“The individual market is where the largest uninsured problem is and this is where we should focus our coverage efforts,” the Chambers of Commerce press release states. “For the current uninsured, mandate an individual health insurance plan combined with guaranteed issue.”
Donovan said the state already has a plan like this and it’s called the Charter Oak Health Plan. He called the state-subsidized plan, which does not disqualify anyone with a pre-existing condition, “a low-quality, high-cost plan.”
