Connecticut AG Says Legislation To Expand State Worker Insurance Pool Would Not Affect Current Contracts, Increase Costs

Connecticut Attorney General Richard Blumenthal (D) said legislation that would allow workers at small businesses, municipalities and not-for-profit groups to join the state employee health insurance pool would preserve, and not change, the existing contracts the state has with insurers, the Hartford Courant reports. Blumenthal was asked by state House Majority Leader Christopher Donovan (D) for his professional legal opinion on the legislation (Levick, Hartford Courant, 5/27).

In a letter recently released by Gov. Jodi Rell (R), Anthem Blue Cross and Blue Shield wrote that if the pool is expanded, the insurer would be forced to increase premium rates for state employees by 4%, or by more than $24 million, in the fiscal year that begins July 1. Anthem President David Fusco said the company would have to "rescind the second- and third-year rate caps for 2009 and 2010" that the state and company had agreed to under a three-year bid to insure state employees. In a separate letter, ConnectiCare called on Rell to veto the bill, stating that the bill would have a negative impact on competition, put a burden on the state and prevent municipalities from effectively controlling costs (Kaiser Daily Health Policy Report, 5/21).

Blumenthal said the legislation would actually create a separate pool for small businesses, municipalities and not-for-profits. The state would then receive separate rates for the additional pool for "equivalent" or "substantially the same" coverage as state employees, he said, adding that the state could either negotiate rates with the same insurers or solicit new bids. Neither option would increase costs for the state, Blumenthal said. "The governor's concern [that the legislation would drive up costs] is understandable, but it's the product of scare tactics that are legally completely unfounded," Blumenthal said.

If no insurers are interested in serving the new pool, the legislation likely will stall, he said. According to the Courant, it is unclear "whether the rates and benefit design in a new municipal/private employer pool would be any more or less attractive than under Connecticut's existing Municipal Employees Health Insurance Program" (Hartford Courant, 5/27).