In the coming year, Connecticut will face one of the worst budget shortfalls in its history. Just two months into the current fiscal year, the budget is already $172 million in deficit. Nearly every projection for the coming year indicates that the next Governor will inherit a $3 billion hole next year.
In the midst of this near catastrophic financial situation, one would assume that the current administration would be looking for ways to economize. While they are in their last months in office, the state is in crisis and it would seem the right thing to do. Yet they are resisting a plan that would move the HUSKY program from the current HMO-based system to self-insurance for a significant savings of $76 million.
In 2008 the state briefly converted HUSKY to self-insurance for legal reasons. Interestingly, during that time families reported much less difficulty getting the health care they needed. As important, there is evidence that the state saved money on the program during those months. A year later, an audit by the Comptroller’s Office found that the state was overpaying the HMOs by $50 million annually. When the state moved HUSKY dental and behavioral health services from the HMOs to self-insurance, more providers joined the program. Most large employers, including Connecticut’s state employee plan, are self-insured.
This spring, the General Assembly approved and the Governor signed a bill that shifts HUSKY to self-insurance and the cost-savings were included in the state’s budget. Under the budget agreement, the $850 million program would be funded directly by the state, cutting out HMO profits and administrative costs.
But instead of implementing the approved budget and moving to self insurance, the state Department of Social Services (DSS) has proposed an entirely new funding mechanism for HUSKY and all of Medicaid— capitation with risk corridors. Essentially this new system would leave the current, overfunded HMO system in place, but with caveats. If HMO profits are too high, the state would recover some of those funds. But if the costs of medical care are too high, the state would pay even more money to cover the HMO losses.
If this sounds complicated to you, you are not alone. Risk corridors require sophisticated data and analytical capacity that DSS does not have. This administration also does not have a history of holding the HMOs accountable, either financially or in providing care to HUSKY families. Given the lack of fiscal capacity at DSS, it is doubtful that they could conduct a meaningful evaluation any HMO claims of losses or profits. It is very unlikely that any HMO would ever have to return any state funds, and they know it. This is risk-sharing on paper only.
The administration needs to do the right thing and implement the budget they agreed to, which moves HUSKY away from capitated HMOs to a transparent, accountable, self-insured system. HUSKY families deserve better access to care, policymakers deserve better information, and taxpayers deserve better value for their money.
Ellen Andrews is Executive Director of the CT Health Policy Project, a non-profit research and advocacy organization working to expand coverage to affordable, quality health care for all Connecticut residents. The Project provides policymakers with information about options for coverage and provides assistance to consumers struggling to access health care in Connecticut.