Connecticut residents benefit from a well-developed, competitive health insurance market that is subject to strict regulation and oversight. Targeted action is needed where the current system falls short. Legislative efforts should focus on strengthening the core components of the Affordable Care Act (ACA), reducing the underlying cost of care, and encouraging financial incentives towards health and wellbeing, not on upending the current system in favor of a new government-run health care program that forges a path towards single-payer. Such efforts threaten future consumer choice and access as well as the state’s fragile economy.
Connecticut’s state government-run public option, otherwise known as the Partnership Plan, offers false promise. It has already proven unsustainable in the limited form it exists today. The Partnership Plan has run multimillion-dollar deficits year over year. As the old saying goes, “If it sounds too good to be true, it probably is.” In 2019 alone, the Partnership Plan incurred losses of $31.9 million.
Insurance premiums reflect health care costs. Until the unit cost of health care is addressed i.e., the prices charged by providers, hospitals, pharmaceutical companies, and even the government itself in the form of taxes and assessments, the struggle will continue to provide quality, affordable health care coverage to all. Criticism of the current system, however, is no excuse to adopt a new state government-run public option that exacerbates the current challenges and creates a series of brand new problems.
Talking Points: State Government-Run Public Option proposals (are):
- Premised on a reduced provider fee schedule that will destabilize the current medical system infrastructure, result in a cost shift cost to private purchasers of health care, and/or result in increased taxes.
- Proven unsustainable, as demonstrated by the Partnership Plan in its current form, which is running multimillion-dollar deficits year over year -a $31.9 million loss in 2019 alone.
- Exacerbate Connecticut’s unfunded liabilities at a time when the state is struggling to recover economically.
- Compete with Connecticut’s flagship industry on an unlevel playing field undercutting the market and forcing job losses. The Partnership Plan isn’t subject to Department of Insurance regulatory oversight, nor subject to rate review and approval, solvency standards to assure claims can be paid based on premiums collected, state mandated benefits, or community rating rules.
- The Partnership Plan is exempt from Connecticut’s 1.5% premium tax and associated assessment charges levied on other small employer premiums. Premium tax alone accounts $320 annually on the average individual employee premium. The state could lower small employer premiums today by repealing the premium tax and removing the assessments.
- Establish a path to single payer that ultimately creates a death spiral in the private market leaving consumers with no choice other than government-run programs.
- Lock entrants into a government-run program, making cancellation difficult, confusing, and expensive.
- Undermine the ACA by allowing a new government program to compete with Access Health CT — the ACA Exchange.
- Potentially jeopardize federal subsidy dollars meant to assist consumers purchasing on the Exchange.