More than half of the uninsured receive coverage, net state budget deficits improve, and small employers experience savings under at least five of the six scenarios presented Thursday to the SustiNet Board of Directors.
Tasked with coming up with something like a public option to be offered as part of the federal health care exchanges, the SustiNet Board of Directors has until January to make its recommendations to the legislature and the governor. And when it does, it will have several options to choose from according to Thursday’s presentation by Stan Dorn of the Urban Institute.
Under the first option, just those who are currently insured by the state would be covered. Those populations include state employees and retirees and those on Medicaid or HUSKY, which covers both subsidized and unsubsidized low-income families. Under that option the number of uninsured would fall from 376,000 to 170,000 and the state budget situation improves even under a pessimistic scenario, Dorn said.
The savings to the state budget could be anywhere from $174 million to $371 million under that option mostly because more federal dollars would be pouring into the state in Medicaid subsidies.
But he also estimated 11 percent of small employers with low-income workers will drop their employer sponsored insurance because their workers may qualify under the SustiNet plan. Dorn said that by dropping coverage, these employers will save about $459 million.
State Healthcare Advocate Kevin Lembo, who co-chairs the SustiNet Board, said he was a little surprised by the number, but it’s all part of the ebb and flow of the system. The modeling method used to draw the conclusions was created by Jonathan Gruber of MIT and it uses about 27-pages of variables given the six different scenarios the board is considering.
Eric George, associate counsel for the Connecticut Business and Industry Association, said he was surprised that healthcare advocates would be talking about saving employers money by allowing them to drop coverage.
“I was frankly shocked that the way they save money is by allowing employers to drop coverage,” George said.
George said he also was surprised that Dorn felt SustiNet and its various options would attract a younger, healthier population.
He said generally these types of health insurance plans attract an older, less healthy population unable to get coverage in the individual market. He also wondered how they were able to draw conclusions about costs when they don’t have a benefit plan to base it on.
Lembo said a consultant has been hired and is coming up with a benefit model that will show what it will cost to go to a doctor or hospital, or to fill a prescription under the various plan options.
Another option presented by Dorn on Thursday would begin to allow small companies, municipalities, and nonprofits to buy into SustiNet. If many small companies begin to buy into SustiNet by 2017, an estimated 136,000 to 166,000 people will be covered. That represents 24 percent to 29 percent of the small group market.
If everyone including larger companies are allowed into the market, employer premiums could drop an additional $35 million or 0.3 percent, according to Gruber’s cost projections.
Joseph McDonagh, an insurance broker and member of the SustiNet Board, said there used to be six major players in the small group market in Connecticut. Now there are only four and by 2012 there may be one less. He said that adding SustiNet as an option may improve competition.
The most costly option for the state is the sixth scenario where the state would increase the reimbursement rates for its HUSKY population. If the state went this route, the number of uninsured falls by 59,000, but state and federal spending rises.
If the state implemented this option, its budget deficit would increase anywhere from $123 million to $139 million in 2012, and $103 million to $153 million in 2013.
Increasing healthcare provider reimbursement will increase costs and it will increase access, but it’s just one of several options the SustiNet Board is considering as it works toward finalizing its recommendations.
In the end, these are all recommendations the legislature and the governor will have to consider, Lembo said. “If they want to go with the first option and pause, or only do the first option and stop — either way it will be up to them.”
Lt. Gov.-elect Nancy Wyman, who also co-chairs the SustiNet board, said Gov.-elect Dan Malloy has not seen the proposal yet, but that the administration is going to take a look at it when it’s completed.
“In keeping with the public’s desire for choices, it’s promising to see the board exploring a number of options,” said Juan A. Figueroa, president of the Universal Health Care Foundation. “These are exactly the kind of roadmaps the new administration and legislators need to figure out how our state is going to improve health and get our economy back on its feet.”
The Universal Health Care Foundation led the movement to create affordable, accessible health care for all Connecticut residents.
“While there is a price tag with any of these plans, we also have to remember the price tag of inaction,” said Rabbi Stephen Fuchs, of Interfaith Fellowship for Universal Health Care. “That price tag goes beyond dollars and cents and includes the human toll of being uninsured or underinsured.”