Insurance is a hot topic in Hartford. That’s nothing new. After all, Connecticut is the “Insurance Capital of the World.” But today, legislators are the ones doing the talking about insurance. I commend them for addressing the high cost of insurance for employers and individuals in our state but a public option is not the answer.
As an insurance broker, I know something about insurance and risk. Every day, I help businesses in Connecticut better understand their health insurance options and provide them with advice about how to best provide coverage for their employees and their families. It is important our state have a competitive insurance market for small businesses in order for small employers to offer affordable coverage to their employees.
Those supporting the current public option bills claim they would help small businesses by reducing costs. In fact, the opposite is true. Expanding government-run coverage would destabilize the private market risk pools and lead to higher premium costs for small business owners struggling to stay in business. Ultimately, it will also mean higher taxes as these government programs will require ever-increasing subsidies to remain solvent.
Legislators have a duty to carefully consider the effect that potential legislation will have on the people of Connecticut. I am afraid that when it comes to the “public option” and buy-in bills, they are not weighing the effect of the legislation. These proposals would expand government-administered health coverage, cost more than they are proposing and could have a huge downside for all employers and tax payers in the state.
There is not enough information in the current proposed legislation on how specifically these health plans will be priced or funded. More actuarial details will allow legislators to make an informed decision about passing this legislation. History has shown that passing legislation on healthcare and not understanding what it entails will increase costs.
Higher taxes are almost a certainty if legislators embrace a “public option” or buy-in bill. Just look at the high cost of other state-run health coverage programs in Connecticut. The Partnership 2.0 program, currently run by our state, is losing money. They are paying out more in claims than they are collecting in premiums and the shortfall is paid by the state. How can our legislators expect these new programs to operate differently or more efficiently?
It is unrealistic to expect government to run a health coverage program more cost effectively than the private sector. Insurance carriers covering small employers have to pay out $.80 in claims on every $1.00 they collect in premium or refund those dollars. The remaining $0.20 is used for administration costs. In 2017 the small group carriers in our state averaged over $0.85 in claims for each $1.00 collected and paid over $1.00 in claims on the individuals they insure.
It seems the ultimate goal of those advocating for these “public option” bills is a statewide single-payer health care system. Under this type of plan everyone would lose their current insurance coverage, even if they like the plan they have and instead be covered by a government run health care plan. This would eliminate choice and will limit access to care. Other states are looking to add public options as well. Vermont actually passed a public option and when the true costs were calculated the state failed to enact the program because it was not affordable.
Legislators need to fully understand what is being proposed and the consequences it will have. The misguided ideas that have been proposed will disrupt the current health care marketplace. They will dramatically impact, a major player in the state’s economy, the insurance industry.
Julie Chubet of Southington is a licensed CT Health Broker.
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