Governor Rell Vetoes ‘Pooling,’ SustiNet Bills;

Creates Health Care Reform Advisory Board

Cites Billions in Unaffordable Costs

READ THE VETO MESSAGES

            Governor M. Jodi Rell today announced that she has vetoed bills that would have established a Board of Directors to implement a health insurance program called SustiNet and opened the state employee health insurance program to employees of municipalities, non-profit organizations and small businesses. At the same time, Governor Rell issued an Executive Order establishing a Health Care Reform Advisory Board to develop state-level policies in response to reforms under consideration at the federal level.

            The bills are House Bill 6600, An Act Concerning the Establishment of the SustiNet Plan and House Bill 6582, An Act Establishing the Connecticut Healthcare Partnership.

            “These are well-intentioned bills that seek to address critically important issues, but they ultimately fail to resolve the central problems of access and affordability,” Governor Rell said. “These bills also raise serious fiscal concerns that – in a time of record budget deficits, record unemployment and record business closures – simply cannot be ignored. These two bills would cost billions of dollars before any economic recovery is complete.

            “At the same time, there are daily developments in Washington that have the potential to make extraordinary and fundamental changes in the way health care coverage is provided in our nation,” the Governor said. “Because – like the proponents of these bills – I believe these issues must be worked out for the benefit of all our residents, I am creating a broad-based panel to develop policies ensuring Connecticut is ready to make the most of the developments at the federal level.”

House Bill 6582, An Act Establishing the Connecticut Healthcare Partnership

            This bill seeks to attract a number of new employee groups to the state employee plan – nearly all of whom already have health insurance, some of whom will be unable to afford the cost of the plan and all of whom may jeopardize the favorable ratings and costs of the current state plan. Given that the plan – which covers approximately 98,000 active and retired state employees and their 97,000 dependents – is financially supported by state taxpayers and insures, those are risks the state cannot afford to take, Governor Rell said.

            In particular, the Governor noted concerns raised when similar legislation was considered that would have opened the federal employee plan to other groups. The U.S. Congressional Budget Office said groups with higher medical costs would be attracted to the plan, driving up rates for all members while driving down overall membership.

            Governor Rell also noted that while the state currently has agreements for health care coverage in place through July 2011 that guarantee effective cost containment, including premium caps, the bill calls for switching to a self-insured plan that could result in an additional cost of at least $69 million for 2010 alone. Nor does the bill establish any reserves, while self-insured plans commonly establish a reserve of approximately two months’ worth of anticipated claims.

House Bill 6600, An Act Concerning the Establishment of the SustiNet Plan

            This bill would have established a nine-member Board of Directors to make recommendations for implementing the SustiNet Plan – but would not have given the board any other option, including the ability to suggest that the plan would be too expensive or unworkable in light of potential federal reforms.

            “Limiting the board of directors to a specific approach is particularly unwise at this time,” Governor Rell said, noting the discussions under way in Congress.

            Moreover, the Office of Policy and Management has estimated that the SustiNet plan will likely cost approximately $1 billion per year. The nonpartisan Office of Fiscal Analysis has estimated the cost of allowing all uninsured adults with incomes less than 300 percent of the federal poverty limit (FPL) into HUSKY A or B, as provided in this bill, at $530 million.

            “As staggering as this figure is, it does not reflect the costs for those with insurance whose employers would be encouraged to drop their plans, which could easily double this cost,” Governor Rell noted.

            The Governor also expressed concern that the unelected Board of Directors would potentially have broad authority over billions of dollars in state, federal and private health care expenditures. Nor would that board have any representatives from health insurance industry, the hospital industry or the business community.

            “The authority to establish public policy of this nature, given its broad implications, should be retained by the legislative and executive branches and not delegated to an authority to determine at some future time,” Governor Rell said.

Executive Order No. 30         READ THE EXECUTIVE ORDER

            Governor Rell issued Executive Order No. 30, establishing a 15-member Connecticut Health Care Reform Advisory Board to develop a set of proposed health care policies in response to federal health care reforms.

            “Such policies shall emphasize cost containment, maximizing federal matching funds, best practices designed to enhance access to preventive care, and assuring health care coverage for all children entering the primary and secondary school system,” according to the order. Issues the panel should consider include changes to improve the health of state residents and their access to health care, providing coverage for Connecticut residents who would otherwise be uninsured, increasing the range of health care insurance coverage options available to residents and employers and slowing the growth of per capita health care spending both in the short-term and in the long-term.

            The board is to make interim recommendations by February 1, 2010, and submit its final recommendations to the Governor and the General Assembly by January 1, 2011.

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