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State Health Insurance Blueprint Splits Lawmakers

Jon Lender

January 08, 2011

Comptroller Kevin Lembo Friday released a blueprint for the proposed SustiNet health insurance program that he said would save the state $226 million to $277 million a year starting in 2014 — but a key legislative Republican said it would be "irresponsible" to go forward with it.

Lembo, a Democrat, is co-chairman of the SustiNet Health Partnership board of directors, a state panel that studied health insurance issues for 16 months and drafted Friday's 200-page report. The plan now will be considered by the General Assembly.

"This report provides the General Assembly with a road map for reform — and propels Connecticut to the forefront in addressing a nationwide health care and financial crisis," Lembo said.

If implemented, the SustiNet system would be run by a "quasi-governmental agency" and would create a pool that includes state employees and retirees, as well as uninsured and needy people — and eventually could become "a new health insurance choice for municipalities, private employers and households," the report said.

House Speaker Christopher G. Donovan, D-Meriden, praised the report, saying it "builds on the strength of health care pooling to increase purchasing power, lower costs and expand access to quality care for people of all walks of life and health histories."

But state Senate Minority Leader John McKinney, R-Fairfield, called the report "incomplete at best," adding: "How is it that everyone seems to know how much SustiNet will 'eventually' save, but no one knows or wants to talk about how much it will cost taxpayers right now?"

"The fact is, there is no plan to pay for up-front and ongoing costs," McKinney said. "For example, how will the state pay for the proposed expansion of Medicaid to individuals at 185 percent of the federal poverty level? … From what we have seen, the price tag for this single-payer universal health care plan will cost taxpayers billions. It would be irresponsible to move forward at this time."

Savings to the state would come in two ways, SustiNet planners say. First, SustiNet would use additional Medicaid subsidies for the poor that will become available under the newly enacted Obama administration health care bill, they say. Also, they say, SustiNet would lower the rate of medical cost increases, using a variety of managed-care techniques.

If SustiNet succeeds in shaving one full percentage point off the rate of medical cost increases, the state's annual savings could exceed $500 million, the report said.

But even without implementing the proposed new system, at least some of the forecasted savings would be realized anyway, because of the expected increase in federal Medicaid subsidies under the Obama plan.