Last year, Connecticut’s health plan for current state employees and their dependents covered 98% of the costs of that care, according to a new report by Georgetown’s Center on Health Insurance Reform. We are tied with Vermont for the richest state employee plan in the nation. Connecticut’s plan for state employees and dependents would qualify as a Platinum plan, the most generous level, in a state health insurance exchange. This year, only 1.4% of Access Health CT members, Connecticut’s health insurance exchange, purchased a platinum plan.
Actuarial value is the relative generosity, or “richness”, of health benefits. It’s measured as the percentage of average healthcare costs that a plan covers. Connecticut’s state employee plan actuarial value of 98% means that, on average, state employees and their dependents pay just 2% of their total healthcare costs out-of-pocket through copays and deductibles. While Connecticut’s plan is platinum-level, most other state employee health plans are just gold-level. The median state employee health plan’s actuarial value is 86%, meaning that other states’ workers pay 14% of their total costs.
According to the Georgetown Center’s last report, in 2020 the actuarial value of Connecticut’s state employee health plan was 93%, tied for seventh among states. We’re going in a different direction than other states. Before you say it – yes COVID happened, but it happened in every state.
According to Georgetown’s report, while Connecticut state employees and dependents pay less than other states’ workers out-of-pocket for healthcare services, they pay 15% of total premiums, the costs that are taken out of every paycheck. That’s about the same as other state employee plans but less than Connecticut’s private sector employees who paid 24% of premiums in 2022 on average. State employee pay also grew 9.4% in 2022, even as the number of state employees dropped. It’s important to note that in Connecticut, as in 21 other states, health benefits are collectively bargained between state officials and state employee unions.
The state is Connecticut’s largest employer, as in most states. According to the report, our state employee health plan covers more than 183,000 state residents. Those numbers could be a powerful driver of better value across Connecticut’s healthcare market. In Georgetown’s report, Connecticut officials described 14 initiatives to improve care and control employee healthcare costs in the plan such as wellness incentives and disease management. However, the state isn’t trying the most promising initiative, reference pricing, which ties prices for care to Medicare rates. Other states report significant savings with reference pricing. Even though Medicare payment rates are lower than for commercial plans, 99% of hospitals and 80% of physicians in those states accept the plans. Because state employee plans cover large numbers of people, they can’t afford not to.
In another missed opportunity, unlike 32 other states, Connecticut’s contract with the consultants who run the state employee plan does not include any accountability mechanisms for failure to meet specified cost-containment goals. It makes sense to give the consultants running the program an incentive to control costs.
For a variety of reasons state budgets have been flush in recent years, so there has been little pressure to lower employee healthcare costs. But the Georgetown authors note that healthcare costs continue to rise and state budgets will eventually tighten. I firmly believe that everyone in Connecticut, and beyond, should have exceptional, affordable healthcare. It’s a human right. But we should be doing everything we can to wring waste out of the system and get the most health for every dollar. We all deserve the best care at an affordable cost.
EDITOR’S NOTE: We used the wrong level of plan in the second graph of the original version of this analysis and have replaced the word “silver” with “gold” in the following sentence: While Connecticut’s plan is platinum-level, most other state employee health plans are just gold-level.