In 2nd year, health care pooling plan draws 8 participants
As a concept, the plan to allow municipalities and other employers buy insurance through the state employee health plan was the subject of intense debate, touted passionately by supporters and dire warnings from opponents.
Now entering its second year, the health plan that grew out of the concept hasn’t quite lived up to the fervent pitch of the rhetoric.
The CT Partnership Plan, offered by the state to public employers including municipalities and school districts, now includes eight employers and covers 2,415 people. Most participating employers are saving 1 percent to 36 percent on their health insurance costs, according to the comptroller’s office, which administers the plan.
There are no plans to open the plan to nonprofits, as had been originally intended.
State Comptroller Kevin Lembo said participation had been a little slower than he anticipated, but that interest has been picking up.
“I think it’s fair to say that it’s been sort of slow and steady,” he said.
While the primary benefit of the plan is better insurance prices and more predictability for employers, particularly very small ones with little leverage in negotiating contracts, Lembo said the majority of the program’s benefit so far has been a secondary one: Towns can get pricing offers from the partnership plan, then use them to negotiate lower rates with their existing insurance carriers.
“I see a real value in us coming together as a large group to negotiate, but as a second benefit, at the end of the day, it’s about bringing municipal relief and hopefully property tax relief as a result,” he said. “Whatever works.”
The partnership plan was created by a 2011 state law that resulted from a compromise over the controversial SustiNet proposal, which would have created a public insurance option using the state employee health insurance pool as a base.
SustiNet would have allowed all state residents to get coverage through an insurance pool based on the state employee plan, but the compromise legislation limited it to non-state public employers and certain nonprofits.
The partnership plan opened last July to municipalities, school districts and other non-state public employers.
The legislation called for the plan to be opened to certain nonprofits this year, but a legal barrier means there are no plans for that to happen, said Tara Downes, spokeswoman for the comptroller’s office.
The barrier: Those behind the plan have been unable to identify a way to offer it to nonprofits without jeopardizing the exemption the state employee plan has from a federal employee benefit law that applies to private employers.
The plan’s participants include Voluntown, where the schools had faced a projected 36 percent increase in their health insurance costs before opting for the state-offered plan last year, according to the comptroller’s office.
The other participants are: the Bristol Housing Authority, Griswold’s town and school employees, New London’s school and city employees, the Sprague Board of Education, Union, and the Valley Council of Governments, which serves four towns in the Naugatuck Valley.
Even before SustiNet, the pooling concept was a controversial idea in state politics. A bill that would have let municipalities, nonprofits and small businesses participate in the state employee health plan passed the legislature in 2009, but Gov. M. Jodi Rell vetoed it, citing concerns about the financial impact on the state and the need for more analysis.
Asked about the past rhetoric on the issue, Lembo noted that opponents were animated in their concerns, while among proponents, “You could say that in some cases, the product was oversold.”
There was an inference, Lembo said, that there would be huge savings by moving away from for-profit, commercial insurers.
“And the reality is it costs money to process claims and negotiate and maintain networks, and health care itself costs money,” he said. “So we have wrung out … much of the administrative burden. And the prices are still high.”
That, Lembo added, points to the need to focus not just on health care coverage but on the cost of care and how to better coordinate it.
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