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Untangling A Bill

Courant Editorial

June 01, 2008

State Attorney General Richard Blumenthal is trying to put the best face on an unworkable bill that would open the state health insurance plan to nonprofits, municipalities and small businesses.

The loyal Democrat was asked recently by the bill's Democratic sponsors for his legal opinion of insurers' claims that opening the state pool to non-state employees, as the bill requires, would breach their contracts. They'd have to raise rates, the insurers reasonably reason, because the most likely takers would be municipalities and businesses with higher risks and costs, for which the pricey state plan is a bargain.

In trying to make the bill work, the attorney general dug deep into its language. He came up with what can charitably be described as a creative and unique interpretation.

He concedes that the state can't do what the bill orders it to do right away — "offer coverage under the state employee plan" and "pool [non-state] employees with the state employee plan." That would indeed violate agreements that took a year to reach and will start July 1. Insurers have a point there, one that the bill's sponsors failed to address.

So Mr. Blumenthal has found a loophole — a clause that he reads as allowing the state to create a separate insurance pool for non-state employees in the meanwhile. When the current contracts come up for renewal and renegotiation in three years, then the state can try including non-employees.

That's a generous reading, but it wasn't the bill's intention.

And the state-run Municipal Employees Health Insurance Plan already serves towns and cities, nonprofits and small businesses. The premiums might be on the high side, according to a 2005 report by the Office of Legislative Research, but "better benefits cost more."

Small employers are crying out for affordable health insurance. The Act Establishing the Connecticut Healthcare Partnership was a well-meaning attempt to meet this great demand. Its implications, however, weren't completely thought out.

Back to the drawing board.