Report Details Health Spending

Group Makes Case For Universal Care

February 28, 2006
By MARK PAZNIOKAS, Courant Staff Writer

Connecticut could provide health coverage to every uninsured resident for $343 million annually, just 2.3 percent of the nearly $15 billion spent on health care in the state, a new study says.

Drawn from fresh research and existing studies, the report purports to establish for the first time the cost of total health spending in the state, including caring for its 356,000 uninsured.

It describes Connecticut as a state of extremes, spending more than any other state on health for the elderly, yet ranking near the bottom in care for children, as it forgoes millions in federal health aid.

The Universal Health Care Foundation of Connecticut will release the report today as it starts to make the case that universal health care is an affordable solution to a 5-year trend of health insurance costs rising three times faster than wages.

The foundation is releasing the study with the unabashed goal of focusing this year's gubernatorial and legislative campaigns on universal health care - the issue that nearly derailed the Clinton presidency a dozen years ago.

Washington all but abandoned hopes of sweeping health care changes after the failure in 1994 of Clinton's Health Security Act, a debacle that some analysts say contributed to the Democrats' losing Congress that year.

"The states are where it's at in terms of significant policy changes and looking for creative ways of dealing with the health access issue," said Juan A. Figueroa, the foundation's president.

Two future reports will explore models of universal coverage and how those options could affect the Connecticut economy, Figueroa said.

The 76-page report, which will be presented this afternoon to the legislature's insurance and public health committees, proposes no blueprint, but provides what Figueroa calls a necessary first step: a detailed map of health spending and insurance coverage in Connecticut.

Its findings:

• Health care spending in the state now approaches $15 billion annually, with $6.7 billion paid by employer-sponsored insurance, $6 billion by Medicare and $1 billion by Medicaid.
• In 2005, $572 million was spent on care for the uninsured, with 39 percent of the spending by the uninsured themselves and 11 percent by hospitals and other health care providers.
• Indirect costs, such as lost productivity by sick workers, are estimated between $652 million and $1.3 billion.
• Nationally, family coverage now costs an average of $10,880 a year, nearly a quarter of the U.S. median income of $44,389 and more than the entire $10,712 annual pay of a minimum-wage worker.The report suggests that Connecticut can afford to do more: As a percentage of its total economy or state domestic product, Connecticut spends less on health care than every other state but Nevada, though its health premiums are among the nation's highest.

As others have noted previously, Connecticut still forfeits available federal reimbursements, apparently because it does not provide state matching funds, the report says.

About 1 in 10 Connecticut residents are uninsured, well below the national average but slightly higher than other New England states. As was previously reported by the state Office of Health Care Access, the uninsured typically are families that earn too much to qualify for public assistance, but not enough to afford coverage.

Hispanic residents constitute 40 percent of the uninsured, while making up 10 percent of the population.

The report is the work of three researchers: Jack A. Meyer of the Economic and Social Research Institute; Jack Hadley of The Urban Institute; and Jonathan Gruber, an economist at the Massachusetts Institute of Technology.

Figueroa said the foundation has offered briefings on the report to the campaigns of Republican Gov. M. Jodi Rell and her two Democratic challengers, John DeStefano Jr. and Dannel P. Malloy. The Democrats have accepted, as have legislative leaders from both parties, Figueroa said.

A spokesman for Rell said she has asked her chief of staff, M. Lisa Moody, to be briefed by the foundation.

"Our intention is that we should have a complete debate, and everything should be on the table," said Figueroa, a former state legislator from Hartford. "Ultimately, the voters must demand a solution - and a comprehensive one. ... That is the environment we are trying to create."

The United States is the only major Western nation that does not offer universal health care, a rallying cry for social justice advocates during the 1990s. But campaign rhetoric in 2006 is likely to be more about the topic's relation to a stable economy than to social justice.

"I think the issue is changing," DeStefano said. "It will be a focus of ours. But, as much as anything else, this will be a job growth issue."

The rising cost of health care coverage is a drag on the economy and a source of labor strife, such as the current strike at Sikorsky Aircraft over the company's efforts to have workers bear an increased share of health costs.

"I think it is turning into an issue of not only insuring the uninsured, but helping those who have insurance retain it," DeStefano said. "I think it is going to be a powerful issue."

Malloy, whose first major campaign proposal was a plan to cover uninsured children, said, "Obviously, I am sympathetic."

Rich Harris, a spokesman for the Rell campaign, said Rell already has made proposals to maximize federal reimbursements and to broaden the state's childhood immunization program.

Harris said health care coverage will be a campaign priority for Rell: "It is an area where she knows action is required."