After early skepticism, Rell administration signs on to federal health care reform

Now that Gov. M. Jodi Rell’s administration has reviewed the federal health reform law, her office said Monday she will not join the multi-state lawsuit to challenge the act–despite calls from all 12 state Republican Senators to do so.

“No, she will not be joining that suit,” said Rell’s spokesman Donna M. Tommelleo. “She wants to make sure Connecticut complies.”

When President Barack Obama signed the reform bill into law last month, the governor called it an unaffordable mandate for the state.

“Connecticut, like nearly every other state, cannot afford millions and billions in costs that Washington passes along. It’s that simple,” she said. “The effects this bill will have on our state budget are likely to be far-reaching.”

But one month later, Rell’s Health Care Reform Cabinet announced the state is going after money under two provisions of the new law.

The state has applied for federal reimbursements for the state’s low-income SAGA health plan – a move expected to net $49.3 in new revenue for the state through next fiscal year if approved.

Rell also wrote U.S. Health and Human Services Secretary Kathleen Sebelius last week to inform her the state would be applying soon to create a federally subsidized high-risk pool for state residents with preexisting conditions.

Cristine Vogel, deputy commissioner of the Department of Public Health and chairman of Rell’s health reform committee, said there are currently 2,000 state residents who buy coverage from insurance companies’ high risk pools at an average cost of $20,000 a year. However, those residents will not qualify to join this federally-subsidized pool since it is only available to those who have been uninsured for six months.

Both Vogel and Mark C. Schaefer, director of Medical Care Administration for the Department of Social Services, cast doubt on the $5 billion allocated nationwide for the high-risk pool.

“There is quite a bit of speculation whether that amount of money will be enough,” Schaefer said.

The state will only move forward, Rell wrote, if there are no additional costs to the state. Proponents say the move could bring in $50 million to the state’s coffers.

Rell’s commissioners do not question that the new law will result in more people having insurance — but who exactly is going to pay to insure the estimated 305,000 people currently uninsured in the state is questionable.

“There will be an impact on a national basis to all providers and how those companies pass those costs down to consumers remains to be seen … That’s basic economics how that cost trickles down,” said Joan McDonald, commissioner of the Department of Economic and Community Development.

McDonald also said the bill could hinder employers from hiring new workers.

“Employers might grapple with, ‘Do I hire a new employee or do I pay for the new health insurance mandates that just passed?’” she said.

A cost the state can count on picking up, Vogel said, is for the 57,000 uninsured people who are currently eligible for Medicaid but have not enrolled.

Since this population will be required to have insurance by 2014, she is certain they will enroll – a move she says will cost the state “millions.” The state will have to pay 43 percent of those costs and the federal government will pay the remainder.

“That’s taxpayers definitely paying for that,” she said during an interview after the two-hour meeting.

Another cost for the state, Vogel said, is the requirement to increase Medicaid reimbursement rates for primary care doctors. The added cost is paid for with federal dollars for two years, but after that, funding runs dry and states are forbidden from decreasing reimbursement rates for these doctors.

“This is going to be expensive for us,” she said.

Vogel said the final expected cost is to upgrade health system technology and to hire more employees to cope with the changes.

“I think we are going to need to hire a lot of people to close that gap,” Vogel said. “There are just so many changes and we are still just trying to figure it all out.”

When asked if she thinks it will even out in the end, Vogel resonded, “We can only hope.”