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Sustinet Expensive, Lacks Oversight

Ben Barnes

April 10, 2011

Gov. Dannel P. Malloy is in favor of expanding access to quality, affordable health care for Connecticut's residents.

Connecticut needs leadership focused on attainable goals, and that is why we are focused on federal health care reform, along with other enhancements such as pooling insurance for local governments. But the SustiNet health care bill currently before the General Assembly is not something this administration can support.

The governor has concluded that there are too many costs associated with the bill, and some troubling provisions that would take some very significant powers and place them in the hands of an unelected board that has almost no accountability to taxpayers. At a time when we are trying to make state government cheaper and more accountable to taxpayers, this bill moves us in the wrong direction in both areas.

Just to get up and running, the SustiNet Authority would spend $4 million on administrative costs in the first year and $6 million annually thereafter. These are expenditures the state would make without even issuing a single policy to cover one person. Furthermore, the Office of Fiscal Analysis has assessed the annual cost of the SustiNet program to be between $250 million to $400 million per year. At a time when we are working to identify consolidations and efficiencies in state government, it makes no sense to add a new authority with all its associated overhead and staff costs.

The SustiNet proposal creates a quasi-public board to oversee health care in Connecticut. With no elected representatives on this board, it's not accountable to taxpayers. This board would take over the administration of health care for state employees and retirees as well as recipients of Medicaid, Husky A and Husky B.

Together, these groups encompass nearly a million insured people and represent about $5 billion — 25 percent — of our state budget. The SustiNet board would be able to change benefits and reimbursements, negotiate contract provisions with state employee unions, add new beneficiaries and incur costs that the state would be obligated to fund through taxes.

In addition, this quasi-public authority would be free from regulation by the state's Insurance Department. We need only look to the Municipal Interlocal Risk Management Agency, a legislatively created workers' compensation company, to see the serious pitfalls of such an authority without the proper oversight. The agency was not required to go through the normal licensing process and was able to sell workers' compensation insurance without being appropriately capitalized. It had to ultimately consent to intervention by the Insurance Department and is now closing its doors.

Why should we allow SustiNet — which would oversee a huge portion of the state's health care spending — to exist without the proper oversight and consumer protections?

Some of the costs involved with SustiNet and a basic health program will become clearer as the federal government completes its job of setting up rules and regulations for the new health insurance exchanges that will be created in 2014. Connecticut is actively working toward that date.

Through federal health care reform, Connecticut is already planning for its health insurance exchange, which will be a marketplace for people to shop for affordable, high-quality health insurance. This work is funded by the federal government, and will guide us through these complex decisions over the next few years.

Many of the individuals and families who will use the exchange to buy insurance will receive federal subsidies. Connecticut can do this without SustiNet, and Connecticut can do it in a way that doesn't put our state's finances on shaky ground.

Although the goals of SustiNet are commendable, we cannot afford to ignore costs. The administration's plan includes creating more affordable and accessible health care, slowed growth in health spending and better patient care and outcomes.

Planning for a better future requires honesty about what we can afford now. Those who agree that everyone deserves affordable and accessible health insurance need to understand that we can get there without SustiNet. In fact, much of the good that SustiNet proposes to accomplish actually rests on the bedrock of federal health care reform.

This is a turning point. Let's move forward. Let's make health reform work for everyone.

Ben Barnes is secretary of the Office of Policy and Management. Jeannette DeJesus is deputy commissioner of the state Department of Public Health and the governor's special adviser on health care reform.