Court ruling prompts two different visions of Connecticut’s future

The U.S. Supreme Court’s landmark ruling Thursday conjured two distinctly different visions of Connecticut’s future.

For health care advocates and other supporters of President Obama’s surviving health care reform, Connecticut dodged a bullet.

For opponents, the Nutmeg State caught the bullet — right between the eyes.

On one side, the image includes a massive increase in Connecticut’s insured population coupled with a huge infusion of federal dollars, both for state government and needy households.

On the other, health care costs continue to grow unrestrained, while state government takes on a fiscal burden that ultimately will swamp its finances.

“I think we’re looking at a very different Connecticut” if the high court had struck down the entire Patient Protection and Affordable Care Act,” Victoria Veltri, Connecticut’s healthcare advocate, said.

Though the massive expansion of Medicaid has dominated much of the news since the act was adopted in 2010, Veltri said that insurance market reforms “may be the biggest thing” in the entire package.

The legislation made a number of changes to the rules health insurers must play by. This included requiring insurers to cover preventive care with no out-of-pocket costs to members and to cover members’ children up to age 26. It also prohibited them from denying coverage to children with pre-existing conditions.

Gender rating — such as charging a woman during her child-bearing years a higher insurance rate than that charged for a man of the same age — also is prohibited.

Ellen Andrews, executive director of the Connecticut Health Policy Project, a New Haven-based nonprofit, said the state dodged a “cannonball” rather than a bullet with Thursday’s decision.

“This is very, very good news for everybody in Connecticut,” she said, noting that an estimated $1.5 billion in federal subsidies would be pumped annually into needy working households here to help them buy health insurance.

The ruling also preserves a system that allows states, with considerable federal funding, to cover uninsured adults without minor children who earn up to 133 percent of the federal poverty level.

Only a handful of states cover working adults without dependent children. Connecticut is one with its Medicaid for Low Income Adults program, or LIA, which serves adults earning about 56 percent of the poverty level or less.

The expansion is expected to provide coverage to another 130,000 Connecticut residents by 2016, Andrews said.

And while basic Medicaid already reimburses Connecticut 50 percent of its LIA costs, that rate temporarily jumps to 100 percent in 2014 under national health care reform.

“I think it’s a great day in terms of fiscal stability,” said state Sen. Toni Harp, D-New Haven, co-chairwoman of the General Assembly’s Appropriations Committee.

The additional federal reimbursement, for LIA alone, is expected to approach $200 million in 2014. Given that state officials already raised taxes $1.5 billion in 2011, Harp said she fears that were the federal reforms struck down, Connecticut lawmakers would look to deeply scale back health care and social service benefits.

“It would be a bad situation,” she said.

But critics counter that Connecticut already is in a bad situation — and it’s going to get worse.

“I see (the ruling) as a de-stabilizing force” in Connecticut’s economy and state budget, said state Sen. Andrew W. Roraback of Goshen, the ranking GOP senator on the Finance, Revenue and Bonding Committee and a congressional candidate in the 5th District.

State government already faces huge unfunded liabilities in its pension and retiree health care programs “that bring us to the precipice” of fiscal crisis in the coming years, Roraback said.

Federal reimbursement for Connecticut’s LIA program does jump in 2014 to 90 percent to cover the newly eligible patients.

But what happens as Connecticut’s Medicaid caseload swells if Congress eventually tackles the federal deficit and aid to states is cut back as a consequence?

But the top Republican on the state legislature’s Human Services Committee, Sen. Joseph Markley of Southington, said that if Congress ever gets serious about closing the national deficit, it won’t be able to spare state Medicaid payments.

“They would have to look at it and I am convinced the day is coming,” Markley said, comparing  the Medicaid expansion to the Education Enhancement Act the Connecticut legislature adopted in the late 1980s.

At that time, state government offered to dramatically increase education aid to cities and towns for three years, provided they used the funds to bolster teachers’ salaries. But after that, communities would be expected to maintain that higher compensation.

And for more than two decades since, municipal officials largely have argued that state education aid has failed by far to keep pace with inflation.

“We laid out a whole bunch of money and told the towns ‘grab on, it will be fabulous,'” Markley said. “Then after a few years we left them holding the bag. Well now we are massively extending our responsibilities for health care, and if the federal government even steps back a little, we are also left holding the bag.”

Markley added that “we’ll find out if I’m an alarmist, but I think the day of reckoning is coming.”

A top officer with the state’s chief business lobby stopped short of predicting doom and gloom, but he said there are several crucial questions about national health care reform that remain unanswered.

“I don’t know if that’s a good thing or a bad thing,” Joseph F. Brennan, Connecticut Business and Industry Association senior vice president, said.

The system would offer tax incentives only to those insurance companies that participate in state health exchanges, while doing too little to adequately control health care costs, Brennan said, adding this could weaken Connecticut’s insurance industry.

“There’s a lot to be concerned about,” he said.