As a small business owner, nothing is more important to me than ensuring our employees have access to affordable, high-quality health care.
For more than 60 years, my company, Northeast Express Transportation, Inc., has provided support to companies in Connecticut with innovative logistics solutions.
Our employees are the backbone of our company —and the ability to offer health coverage people can afford is one way that we’re able to stay competitive in the job market. I keep a close eye on premiums and the impact they have on our hardworking staff.
That’s why I’m concerned that some Hartford politicians are considering a try to pass legislation mandating the creation of a new state government-controlled health insurance system —often known as the “public option” or “state government option”—similar to what was proposed and failed during last year’s legislative session and many times before.
A new study shows why creating the public option is wrong for Connecticut. The study examines the effects a public option would have on health coverage, state spending, and state revenues and finds that the consequences of the public option would be devastating to Connecticut businesses and taxpayers.
First, the study finds that Connecticut’s state revenue could plummet by between $71 million and $122 million in just one year. To make up for this shortfall, lawmakers, including the governor, would likely push to increase taxes and assessments on health insurers or raise taxes on small businesses and families.
As we continue to battle COVID-19 and work toward our economic recovery, the last thing that Connecticut businesses and residents need are higher taxes. Take this recent survey by NFIB, a small business organization with grass roots here in Connecticut, which shows that not only have the recent increase in COVID-19 cases negatively impacted two-thirds of small business owners, but that nearly half reported supply chain issues and nearly one quarter are experiencing a significant staffing shortage.
This is not the time to increase premiums on small business owners, which is what could happen according to the public health care study. That includes employers who choose not to participate in the state government option. That option could destabilize the private marketplace and lead to higher premiums for small business owners, who could be left with no choice but to pass some of those increased costs on to their employees.
The state government-controlled Connecticut Partnership Plan offered to municipal employees has already proven to be a financial disaster because of its massive underfunding. In fact, the plan lost more than $30 million in 2019 – triple what it lost in 2018.
The state comptroller just bailed out the plan in December to the tune of $40 million by redirecting dollars that were supposed to be used to combat the coronavirus pandemic.
If a new state government option plan is also underfunded, premiums would likely increase and/or reimbursement rates to already-stressed hospitals, doctors and other health care providers would likely have to be cut by 15 percent. This could significantly disrupt Connecticut residents’ access to quality care. If the state doesn’t cut payments to health care providers, it would still have to collect between $816 million to $1.152 billion to make up for the lost tax revenue.
To top it all off—the state government option could actually result in fewer Connecticut residents being covered. The study modeled six different scenarios of “take up” of the government-controlled public option among employers, and in four of the six, the number of newly uninsured ranges from 9,000 to 29,000. Furthermore, even higher public option take up rates do little to lower the number of uninsured. In two of the scenarios the study examined, a 75 percent take up rate reduces the number of uninsured by a meager one percent.
Connecticut residents should be encouraged by the tremendous progress that has been made in expanding access to affordable health care to more people. More than 100,000 Connecticut residents enrolled in coverage through the state’s health insurance exchange during the recent open enrollment period, and an estimated 40,000 Connecticut residents qualify for Covered Connecticut, which offers free premiums, copays and deductibles, thanks to the federal improvements through the American Rescue Plan Act.
We know what’s working and should be building on that success, but some Connecticut politicians insist on starting over from scratch.
Let’s not forget that politicians in Hartford have tried to pass a government-controlled health insurance system three times and have failed. Despite the growing body of research that shows why creating this new health insurance bureaucracy would be harmful, a new public option proposal is expected to be introduced in February.
Instead of continuing to pursue this unaffordable, risky proposal that keeps failing, lawmakers should focus on value, quality and making health care more affordable for Connecticut residents.
Connecticut’s small businesses and hardworking taxpayers deserve better than to be used as a backstop for the unaffordable costs of this flawed idea. As our state lawmakers head back to Hartford, I urge them to consider the negative consequences of the public option and instead work together to improve our current system.
Kevin Maloney is the president and owner of Northeast Express Transportation, Inc. in Windsor Locks.