As Congress takes aim at the federal health law, some Connecticut legislators are raising questions about another aspect of Obamacare – how the state’s health insurance marketplace gets its money.
Access Health CT is a quasi-public agency, funded through an assessment charged to insurance companies for each plan sold to individuals or small groups, whether the plans were purchased through the exchange or not.
The size of the assessment is set by the exchange’s board. It voted in 2015 to raise the assessment to 1.65 percent of premiums, or $139 per year for a policy with a $700 monthly premium. Those fees are generally passed on to consumers through their premiums.
The increase “raised an eyebrow,” said Sen. Kevin Kelly, the Senate Republican chairman of the Insurance and Real Estate Committee.
“What was really the issue was that the exchange could just vote itself a raise, and that there’s no public body overseeing that increase,” Kelly, of Stratford, said.
Kelly wants to expand the oversight of the assessment Access Health charges. A bill before the insurance committee would require that the exchange get approval from the insurance committee before increasing the assessment or changing the process used to increase it.
Making that kind of change would restore some checks and balances, Kelly said, and provide transparency about one element of health insurance costs.
Officials at the exchange oppose the proposal, CEO Jim Wadleigh said.
“Our budget process is public,” he said. “Our board process is a public process where things are voted on and the community can come in, the public can come in and listen and give feedback.”
And Wadleigh said the exchange has been paring back its expenses, in part to help keep insurance costs down. The exchange was initially funded by federal grants and has only raised the assessment once to “rightsize it,” Wadleigh said. He said the assessment rate is among the lowest of any exchange in the country.
“My goal has been to continue to lower our operating expenses so that there’s less impact on rates through our assessment,” Wadleigh said.
The assessment is expected to bring in about $31 million during the current fiscal year. That’s a drop from the previous year, because there are fewer policies being sold that are subject to the assessment, Wadleigh said. Health plans that are self-insured, which is common among large companies and an increasing number of small employers, are not subject to the fee.
The exchange does not receive state funding, although the state Department of Social Services pays for a portion of certain expenses, such as the call center, because they are used for Medicaid clients as well as people buying private insurance.
Wadleigh said the proposal appears to subject the exchange to a level of review that other quasi-public agencies don’t face.
Connecticut’s other quasi-public agencies are funded through a variety of mechanisms, including user fees, investment income, and money generated by making loans.
Like Access Health, the Connecticut Green Bank – which helps to finance and promote clean energy projects – relies on a broad-based assessment for a portion of its funding, rather than a fee on those who use its services. In the Green Bank’s case, the assessment is on electric customers and is included in their power bills. But unlike Access Health, the level of the Green Bank’s assessment is written into state law.
Other quasi-public agencies raise money in ways that are less parallel to the exchange. The Connecticut Higher Education Supplemental Loan Authority, for example, sells bonds and generates revenue from the loans they issue. The Capital Region Development Authority receives state funding and generates income from operations such as parking fees, loan processing fees from housing projects, and selling advertising. The Connecticut Airport Authority is funded through revenues from its airports. The fund for Bradley International Airport is self-sufficient, but the authority receives a state subsidy to cover any deficits from the five general aviation airports it oversees.
Rep. Sean Scanlon, D-Guilford, the insurance committee’s co-chair, said he expects the proposal on the exchange’s assessment to get a public hearing. But he expressed caution about it and said it’s important that any discussions about the exchange be done in the context of the uncertainty about the future of the Affordable Care Act.
“I think it’s hard for us to know what the future of Access Health CT is going to be until we know more from what’s happening in Washington,” Scanlon said. “If they are going to be asked to bear a higher burden than they are right now because of changes that happen at the federal level, if they’re working with more money, then oversight may be appropriate.”
“But it just seems like, at this point, it’s hard for us to really know in what direction they’re going to go,” he added.
And Scanlon said there needs to be conversations at the state-level about what will happen if changes at the federal level eliminate the funding that has allowed the state to expand health care coverage to close to 300,000 people – through broader Medicaid eligibility rules and federal tax credits to subsidize premiums for people who buy health plans through the exchange.
Note: This story was updated to clarify the funding for the Connecticut Airport Authority, to reflect the fact that any state subsidies go to cover deficits at general aviation airports, not Bradley.