Two years ago an Office of Fiscal Analysis report on how much universal health care reform would cost the state essentially killed the proposal by putting a hefty $11.8 billion to $18 billion price tag on it.
Determined not to let that happen again the legislature’s Public Health Committee pushed the start date of a similar, but more diverse health care proposal, back six months to July 1, 2011, so that it wouldn’t infer with an estimated $8.7 billion budget deficit for fiscal years 2010 and 2011.
The bill, which was passed by the Public Health Committee last month, says during the next two fiscal years the state will create a nine member board to oversee the implementation of the SustiNet proposal.
The SustiNet proposal has many moving parts, but essentially the bulk of it would create a massive health insurance pool by combining the current pool of state employees and retirees with people now covered under state assistance programs, like Medicaid. The proposal does not include any individual mandates to purchase health insurance, but would allow employers to join the plan as long as they help contribute to the cost of their employees health insurance. It would also expand enrollment in public assistance programs such as Husky.
Even before the Office of Fiscal Analysis unveiled their report last week the Universal Healthcare Foundation, estimated it would eventually cost the state $950 million to increase doctor reimbursement rates and expand income levels for those enrolled in public assistance programs, such as Husky.
The first step in developing the SustiNet proposal is creating the board, which will oversee the transition of the public plans.
How much the board may need to operate was not clearly defined by this year’s Office of Fiscal Analysis report or the bill itself.
Since the SustiNet board that the bill seeks to create currently does not exist in Connecticut, the Office of Fiscal Analysis compared it to the Massachusetts Commonwealth Health Insurance Connector, which was established in 2007. The fiscal note points out that the Connector “was provided with an initial $25 million appropriation from the Massachusetts legislature prior to the start-up.”
The OFA report released last week did explain that the Massachusetts Connector has a staff of 43 and an annual operating budget of $35.1 million with health premium coverage of $782 million. It goes on to point out that the Connector is a fully-insured plan and not a self-insured one envisioned by the SustiNet bill.
The report goes on to say that “while the bill contains numerous references to carry-out its duties ‘within available appropriations’ none have been provided for in this bill.”
While some remain skeptical, lawmakers like Rep. Betsy Ritter, co-chairman of the legislature’s Public Health Committee, said they’re optimistic it has a chance to pass this year.
She said by passing the bill Connecticut is positioning itself to receive what could be substantial amounts of federal funding. She said she expects the federal government to make an announcement sometime at the end of May about their plans for stimulus dollars targeted at health care reform.
She said setting up the board and letting it decide how the state should move forward “is a very exciting opportunity for the state.”
“It behooves us to be in the best position possible to receive these funds,” Ritter said in a phone interview Monday. Aside from the funding discussion, Ritter said there’s no case to be made in favor of the current situation which leaves many people without coverage and many more with poor coverage.
Eric George, associate counsel for the Connecticut Business and Industry Association, said he agrees with some of the ideas in the SustiNet proposal, such as the adoption of electronic medical records, but altogether the proposal is simply unaffordable at $1.75 billion.
George said the idea of transitioning the state to self-insurance is a bad idea because the state does not have the necessary reserves to pay the claims and it also doesn’t have the claims data necessary to determine how much money it may need to pay those claims.
“These are not the times for fear-mongering,” Janet Davenport, the Universal Health Care Foundation’s vice president of communications, said.
She said she doesn’t want to trivialize the state’s current budget deficit, but the Office of Fiscal Analysis report failed to focus on the savings residents would realize if the plan were implemented. She said in order to make these important decisions lawmakers need to have all the data, which includes both the costs and the savings.
A statement released last week by the Universal Health Care Foundation says that by 2014 SustiNet will save small businesses and individuals a combined $1.7 billion and an average $895 per person.
SustiNet is “the most complete blueprint for health care reform” and it’s “ready to be put into action,” Davenport said.