A big problem; a questionable solution

Given that small businesses employ more than 700,000 people in Connecticut, it is a big problem that less than half offer health insurance benefits to their workers. That means that a quarter of the workforce has no access to workplace health insurance.

Employers who decide they cannot afford to subsidize the cost of providing health insurance are more vulnerable to good workers leaving, not necessarily for better pay, opportunities or working conditions, but for access to health insurance.

Conversely, an employee may find herself turning down a good opportunity to join a small company — one that well fits her skill set and could provide great opportunities for growth and promotion — because the job does not come with a health insurance plan.

In other words, health insurance choices act to distort normal free market forces that otherwise would drive job decisions based on skills, pay and opportunity.

“It is about access to health care, but it is also about economic development and the growth of our small businesses,” said Connecticut Comptroller Kevin Lembo when he visited with out editorial board April 8.

The lack of a national consensus on how to deal with health care exacerbates the problem. Republicans, with their long-held opposition to the Affordable Care Act in Washington, have undermined it and rejected overtures from Democrats to shore it up.

When in control of Congress, Republicans ended the tax penalty attached to the mandate that individuals must have health insurance. This removed millions of young healthy people from the risk pool, raising premiums for everyone else.

Republicans have not proposed an alternative to the ACA, at least no plan that wouldn’t make things worse by leaving millions more without coverage, according to Congressional Budget Office.

That said, a proposed state solution, promoted by Lembo and touted by some of his fellow Democrats in the legislature, raises red flags.

Proceeding in the legislature is a bill that would make Connecticut the first state to offer a public option; in the first year for businesses with 50 employees or less and subsequently for individuals. The program would be named ConnectHealth.

When the Affordable Care Act was first debated the discussion included a public option with the intent that a government alternative would force private insurers to hold down premiums. Democrats, however, could not get support among party moderates, most critically then Connecticut Sen. Joe Lieberman.

Interesting, then, that Lembo states ConnectHealth “would help fix what the ACA has failed to do — provide a public health plan option.”

The logic behind ConnectHealth is that Connecticut government, which manages the largest employer health plan in the state — 190,000 state employees and family members — could use its negotiating power to offer quality, affordable health plans to small businesses and individuals. Lembo’s office would hire an insurer to manage the program. His expectation is that it would be supported by premiums, not a state subsidy.

The General Assembly’s Insurance and Real Estate Committee has backed the proposal.

What, then, are the red flags?

There are reasons Congress could not get the votes for a public option and why no other state has adopted the approach, though others are debating it as well.

Connecticut only has a couple of participants left in its health insurance exchange market. Competition from a public option could potentially drive them out. Lembo offers assurances that the state would balance affordability with a desire not to go so far as to destabilize the market. That could prove a tough needle to thread.

Also of concern is the potential that a lop-sided share of individuals with high-cost health needs could gravitate to ConnectHealth and drive up premiums, spilling over to the cost of providing state employee plans, which could have a big impact on state costs.

Given the state’s fragile fiscal health, the state should be risk adverse when it comes to the budget. Gov. Ned Lamont has been largely silent on ConnectHealth, but his reluctance to endorse is telling.

Several other states — Wisconsin, Maine, Alaska, Hawaii, Minnesota and Oregon — have applied for “reinsurance pools,” with the federal government subsidizing some claims, lowering premiums offered by insurers operating in the individual market.

Advocated by Republican state Sen. Kevin Kelly of Stratford, this approach for Connecticut would not be as comprehensive as the Lembo plan, but less risky for the state. It failed to get out of committee, however. That’s unfortunate. The legislature could have benefited from further debate about the better path to follow.

Paul Choiniere is the editorial page editor.

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