To those, mostly Republicans, who do not believe everyone has a right to healthcare, and are perfectly happy to see illness, even pandemic, as an opportunity for profit and sky-high salaries, I have nothing to say. They will invent facts and not listen to logic.
I am writing to those struggling to defend the public option healthcare plan, under the burden of a mass of disinformation put out by the Connecticut Business and Industry Association (CBIA). The latest version of the Public Option (SB 842) will offer a state-run healthcare package to small businesses, individuals, and not-for-profits. This means that it will operate with no profit burden, and modest government salaries.
It will be a better deal for the customers.
It will add new groups to the already existing CT Partnership Plan. This is a pool of cities and towns with about 60,000 people in it.
Fine-tuning the Partnership
Let me say, up front, that the Partnership, as passed in 2016, was flawed in that it didn’t allow the Comptroller to adjust rates based upon differentials in the cost of medical care across Connecticut. This flaw is the source of the red ink that makes the CBIA so gleeful.
The original statute required just one premium, the price for buying healthcare, for the whole state of Connecticut. The single rate resulted in a rush of towns in Fairfield County into the plan. The good folks in that county have excellent healthcare. They pay a hefty premium for it. They know a good deal when they see it, and piled into the Partnership, so that they are 70% of its population.
They paid a premium, which did not cover the cost of their care, and so bled the finances of the Plan.
It quickly became obvious that the Partnership had to be fine-tuned to fix this problem. And so it was. In 2019, as part of the budget implementer, the premiums for the Partnership are adjusted by county, the way private insurers do it. The new rates, higher for the people in Fairfield, are being phased in, right now. There has been no red ink in a year, nor is any projected.
Challenges with new initiatives are not unique to the public sector by the way, they are very common in private business. General Electric, for example, jumped into the long-term care insurance market with both feet, with very poor foresight, and got burned to the tune of tens of billions of dollars, which crushed the legacy manufacturer.
The problem for the Partnership, on the other hand, was slight, less than $30 million, in its worst year, in a $500 million/year system. That was easily absorbed by its reserve fund and fixed with new legislation. The modest premium increase proposed by the Comptroller’s office of 3% will adequately take care of any new price increases. The Plan will not need the tremendous increases, falsely projected by CBIA, because of the new method of underwriting implemented in 2019.
In step the deceivers
CBIA, and its partner in deception, Brown & Brown, conveniently neglect to acknowledge the repair, and project huge red ink into the future, requiring big price increases, as if the initial program design with a single statewide premium still exists. Both of these outfits are actually insurance brokers, masquerading as objective analysts.
Brokers, who skim an average of 5% off the premium, are supposed to shop around for the customer and come up with the best package. CBIA, in reality, shunts almost all the small businesses it represents automatically into ConnectiCare. Brokers have to spend a big share of their gains on lobbying, to protect what is increasingly a useless role.
Latest development
SB 842 was recently gutted in committee. The false data of the CBIA, basically unanswered, gave the Republicans on the committee the excuse they needed, and scared enough Democrats that there was an amendment passed, which strips the Public Option of its cost-saving features.
The existing municipal Partnership, to which the larger Public Option will be attached, is administered by a “third party,” namely Anthem, which collects the premiums and pays the bills. The risk, however, is retained by the state, which means that Anthem collects no profit on the business, and also cannot charge for its high overhead. That’s what keeps the premiums down.
No, it’s not a “level playing field,” meaning the public-run healthcare can underbid the for- profits in the marketplace. That’s the goal: to make it more affordable and thus cover more folks. The committee amended 842 to make it “fully insured.” That’s insurance-speak for assuming the risk, and attaching an extra cost for profit and high executive salaries. So, the Public Option, if the amendment sticks, will no longer be “public,” and will have no impact.
The proponents of the bill. however, are not defeated, and are determined to strip away the killer amendment and forge ahead. Hopefully an understanding of the CBIA deception will help this happen.
So, listen to our Comptroller, Kevin Lembo, and get behind SB 842, the new Public Option. It is a good step on the road to affordable care for everybody. Don’t be confused by the scary, intentionally false numbers tossed around by CBIA.
Bill Shortell is a member of the New Britain Democratic Town Committee and former member of the CTAFL-CIO Executive Board.