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Insurance Bill Faces Veto Threat

By CHRISTOPHER KEATING | Capitol Bureau Chief

May 20, 2008

Gov. M. Jodi Rell is considering vetoing a major health insurance bill after one of the state's largest insurers said the bill would cost the state more than $24 million.

Rell's administration was already skeptical of allowing municipalities, nonprofits and small businesses with fewer than 50 employees to voluntarily join the state's gigantic health insurance pool. But the bill was passed by wide margins in the state House of Representatives and the Senate; it was supported by most Democrats and backed strongly by major labor unions.

On Monday, Rell released a letter from Anthem Blue Cross and Blue Shield of North Haven that said the insurer would be forced to increase its rates by 4 percent — or more than $24 million — for the fiscal year that starts July 1.

Anthem President David R. Fusco said "we must also rescind the second- and third-year rate caps for 2009 and 2010" that the company had agreed to in its three-year bid to provide health insurance for state employees.

Since the bill would open the pool to more than its current clients, Anthem says that is "a material change to the underlying assumptions of the bid" and allows it to recalculate the bid.

In addition, Rell released a separate letter from Farmington-based ConnectiCare that urged her to veto the bill.

"We believe the bill could damage competition in the current private market, put an unfunded burden upon the state, and prevent municipalities from having the flexibility to control their employees' health costs," said Stephen Jewett, a spokesman for ConnectiCare, which insures about 230,000 people in the state.

Without using the word "veto," Rell said she has problems with the measure that had still not yet reached her desk Monday.

"I have major concerns" about the bill, Rell told reporters in her Capitol office.

Democrats say the bill would provide cost savings because the pool could be as large as 600,000 people, allowing officials to drive a hard bargain on costs and thus lead to lower premiums. Support for the idea dates to least 1991 when then-Comptroller Bill Curry pushed for the concept. While the idea was derailed repeatedly in the ensuing years, it finally passed this year after being pushed by one of the General Assembly's most influential members — House Majority Leader Christopher Donovan of Meriden.

Nationally, 24 states allow municipalities in their pools, and others are considering it.

As the bill moved through the legislature, it was opposed strongly by the Connecticut Business and Industry Association, the state's largest business lobby. At the same time, the measure received strong support from Council 4 of the American Federation of State, County and Municipal Employees, known as AFSCME, and Local 2001 of the Connecticut State Employees Association. The bill passed 102-43 in the House and 22-12 in the Senate.

"Finally passing the 'pooling' bill shows that our lawmakers truly do care about the healthcare burden on Connecticut's towns, school districts and small businesses," said Michael O'Brien, president of CSEA/SEIU Local 2001. Rell "should act by signing this bill into law immediately. That would send a strong message that she is committed to help cash-strapped municipalities avoid cutting public services and raising local property taxes."