It was only a matter of time before the Insurance industry pushed back against Connecticut’s controversial health proposal called SustiNet.
SustiNet, the state’s best hope for a public option was panned as more costly and convoluted in this report , which focused on the recommendations the SustiNet Board of Directors made earlier this year to the legislature.
The report put together by the Hay Group for America’s Health Insurance Plans concluded that it will cost the state $62 million by 2017, rather than save the state $224 million in that same year to implement SustiNet and convert certain populations to Medicaid.
The SustiNet plan is designed to pool together all state health insurance populations including Medicaid recipients, state employees, municipalities, and eventually the public.
The report, which was not distributed widely and can only be found on a free software platform called Scribd, argues that since the state has already converted the low-income adult population to Medicaid the savings from that move can’t be counted twice. It also argued the state employees health benefits are very rich and municipalities and small businesses, which the state will eventually add to SustiNet, may not be able to afford it.
The report goes on to talk about the insurance risk the state is facing in trying to implement a plan that will immediately include more than 700,000 covered lives.
“If the premiums for covered members do not cover the claims incurred then the state would be taking on potentially unknown additional liability related to subsidizing the coverage,“ the report concluded. “To give a sense of the potential magnitude, if the state were to combine all of the approximately $8 billion in health benefits it currently supervises in the SustiNet, a one percent underestimate in the claims and premiums required to cover these claims could yield a loss of $80 million.”
The report also criticizes the recommendations to expand and increase coverage for low-income families on the HUSKY health insurance plan but “it provides no estimate of the cost implications of these recommendations.”
No one from the Hay Group returned numerous phone calls Wednesday to answer questions about the report, which was based on the SustiNet Board of Directors recommendations to the legislature and not the legislation currently weaving its way through the legislative process.
Universal Health Care Foundation President Juan Figueroa called the report “deeply flawed and containing numerous factual errors.”
“We’re taking a closer look at the report, but the most superficial read shows it contains glaring inaccuracies,” Figueroa said. “They clearly misunderstood the SustiNet report.”
“They’ve taken numbers and used them selectively to arrive at erroneous conclusions,” Figueroa said in a statement. “Besides, the report is also talking about the proposal from the SustiNet Health Partnership Board and not the current legislation.”
Sen. Minority Leader John McKinney, R-Fairfield, said he understands that the report is not on the proposed legislation, but he was struck by the fact that it looks like they’re counting savings already accounted for in the state budget.
He said those savings from switching the State Administered General Assistance adults to Medicaid shouldn’t count toward the SustiNet savings since that change is not dependent on whether SustiNet succeeds or not.
As for the cost of the proposal, McKinney said two years ago the Office of Fiscal Analysis estimated a similar proposal would cost the state $11.8 billion to $18 billion so it’s “ludicrous” to think the current SustiNet proposal won’t cost the state any money.
Rep. Besty Ritter, co-chairwoman of the legislature’s Public Health Committee, said she didn’t have time to read the report but was told the assumptions in the report are based on the recommendations by the SustiNet Board and not the current legislation.
She said a fiscal note for the SustiNet legislation is expected early next week. Sources say it is expected to be completed next Monday. Ritter preferred to wait for that report before commenting further on the bill, which hasn’t received the support of Gov. Dannel P. Malloy’s administration.
Last month Malloy’s administration said it supports the goal of SustiNet, but doesn’t believe there’s enough money in the next two year budget to adopt it. It’s a theme he’s repeated at town halls across the state when asked by proponents of the legislation to support it.
The SustiNet legislation made it through three legislative committees and is expected to have to get through a few more before it gets onto the House calendar.