Connecticut Seal

General Assembly

File No. 341

    January Session, 2011

Substitute House Bill No. 6305

House of Representatives, April 4, 2011

The Committee on Human Services reported through REP. TERCYAK of the 26th Dist., Chairperson of the Committee on the part of the House, that the substitute bill ought to pass.

This act shall take effect as follows and shall amend the following sections:

Section 1

from passage

New section

Sec. 2

from passage

New section

Sec. 3

from passage

New section

Sec. 4

from passage

New section

Sec. 5

from passage

New section

Sec. 6

from passage

New section

Sec. 7

from passage

17b-261(a)

Sec. 8

from passage

New section

Sec. 9

from passage

17b-90(b)

Sec. 10

from passage

New section

Sec. 11

from passage

New section

Sec. 12

from passage

New section

Sec. 13

from passage

New section

Sec. 14

from passage

New section

Sec. 15

from passage

New section

Sec. 16

from passage

New section

Sec. 17

from passage

New section

Sec. 18

from passage

19a-750(c)(1)

Sec. 19

from passage

New section

Sec. 20

from passage

New section

Sec. 21

from passage

1-79(l)

Sec. 22

from passage

1-120

Sec. 23

from passage

1-124

Sec. 24

from passage

1-125

Sec. 25

from passage

Repealer section

PH

Joint Favorable Subst. C/R

INS

INS

Joint Favorable C/R

HS

HS

Joint Favorable Subst.-LCO

 

Current Program

Lives Covered

SustiNet Level

FY 12 Estimated Cost

Medicaid

560,977

A, D

$3,376,000,000

HUSKY B

14,840

B

$39,000,000

Charter Oak

8,834

C

$15,500,000

State Employees and Dependents

132,786

E

$644,600,000

State Retirees and Dependents

69,371

E

$597,400,000

TOTALS

786,808

 

$4,672,500,000

 

Estimated Population

Non-State Public Employers (1)

577,949

Municipal-Related Employers(2)

Unavailable

Small Employers(3)

690,000

Nonprofit Employers(3)

174,342

Other Employers

Unavailable

Uninsured Individuals

380,500

   

Average Annual Premium Rates

 

Employer

Single Coverage

Employee Share

Family Coverage

Employee Share

National*

Small Firms

$5,169

15%

$13,735

32%

Large Firms

$5,104

19%

$14,161

25%

Regional*

         

Northeast

$5,252

19%

$14,117

24%

State+

State of Connecticut

$7,009

7%

$18,925

14%

 

CT Cities & Towns

$8,000

10%

$21,300

10%

Local**

CT Boards of Education

$8,000

13%

$21,300

13%

*National and Regional PPO plan data obtained from 2010 Employer Health Benefit Survey. + State POE health plan data obtained from Office of the State Comptroller. ** Local data obtained from CT Public Sector Healthcare Cost & Benefit Survey 2009.

 

Clients

State Cost per year

Impact

Remove clients from HUSKY A

-16,000

$3,000

-$48,000,000

Enroll HUSKY A Clients in BHP

16,000

$2,675

$42,800,000

Net Savings

   

-$5,200,000

 

State Cost – HUSKY Level

State Cost – LIA Level

Plan Cost

$6,000

$9,000

Cost less Federal Subsidy

$2,675

$5,675

Clients

85,250

85,250

Net State Cost

$228,043,750

$483,793,750

Cost Less HUSKY A Savings

$222,843,750

$478,593,750

Yea

16

Nay

10

(03/07/2011)

Yea

9

Nay

7

(03/10/2011)

Yea

12

Nay

6

(03/17/2011)

TOP

1 Estimates are based on the costs of the Massachusetts Health Connector's first three years of operations and adjusted for the Sustinet Authority's specific scope and requirements. Costs associated with staffing do not include fringe benefits.

2 Congressional Research Service - The Market Structure of the Health Insurance Industry, November, 2009.

3 The bill establishes the Authority as the Insurer for SustiNet G. As such, it bears the risk of losses if the established premiums fail to cover the cost of claims. Should any Authority reserves be unable to pay for such losses, it is unclear who would bear the final loss. As the Authority is established as a quasi-public agency, the state of Connecticut could be liable to bear any loss.

4 The fringe benefit costs for most state employees are budgeted centrally in accounts administered by the Comptroller. The estimated non-pension fringe benefit cost associated with personnel changes is 23.76% of payroll in FY 12 and FY 13. In addition, there could be an impact to potential liability for the applicable state pension funds.

5 The state currently collects approximately $8 million a year from the premium tax on health insurance policies procured by municipalities.

6 Current law exempts new or renewed contracts or policies written to provide coverage to municipal employees under a plan procured pursuant to CGS 5-259(i) from the premiums tax. Therefore, MEHIP participants are currently exempt from the premiums tax. As a result, there would not be a loss to the premiums tax should MEHIP participating non-state public employers shift coverage to the state employee health plan.

7 CT Public Sector Healthcare Cost & Benefit Survey, 2009.

8 As of January 1, 2009 there were 45 health insurance mandates required by the state. The mandated benefits in effect as of January 1, 2009 accounted for approximately 22% of total premiums for group coverage. (Source: Connecticut Mandated Health Insurance Benefits Review, 2010).

9 According to the PPACA, compared to the plans' policies as of March 23, 2010, grandfathered plans who make any of the following changes within a certain margin may lose their grandfathered status: 1) Significantly cut or reduce benefits, 2) Raise co-insurance charges, 3) Significantly raise co-payment charges, 4) Significantly raise deductibles, 5) Significantly lower employer contributions, and 5) Add or tighten annual limits on what insurer pays. (www. healthcare.gov)

10 It is estimated that by 2014, there will be approximately 81,000 enrollees in the existing LIA coverage group, at a cost of $728 million annually. Based on this enrollment pattern, the expansion to 133% FPL would add an additional 32,000 clients, with annual costs of $288 million.

11 Although the current cost per case for the overall HUSKY A population is $3,333 (including carve outs), the population is two-thirds children. According to the Insurance Department, the cost of covering adults is approximately 2 and 1/2 times the cost of covering a child. Controlling for the HUSKY A child population, and assuming 5% annual inflation until 2014, results in an estimated per person cost for HUSKY A adults of $6,000.

12 This assumes 16,000 former HUSKY A parents and 82,500 non-HUSKY adults. According to Connecticut Department of Revenue Services data, there were 225,000 tax filers with incomes between $14,000 and $22,000 in 2009. The U.S. Census Bureau estimates that 29% of individuals with incomes under $25,000 are uninsured. This would yield approximately 65,250 individuals. It is further assumed that about 7% of those in this income bracket who currently have insurance would drop that to enroll in the BHP, for a total of 82,500 non-HUSKY BHP enrollees.

13 Although the cost of the Silver Plan has not been established, the Congressional Research Service and Congressional Budget Office have used $4,500 as a general estimate. The final average cost of the Silver plan will be dependent upon the benefit plan as well as the age of the individuals enrolled.

14 PPACA includes maximum client premium and cost sharing for Exchange products, which vary by income limit. Based on these requirements, this analysis assumes that a client's share of the premium would average $1,000 (derived from Kaiser Family Foundation estimates). The federal subsidy available for the BHP would be 95% of the federal share of the cost of the Silver Plan. Therefore, the federal subsidy would be $3,325, which equates to ($4,500 - $1,000)*95%. It should be noted that PPACA indexes the federal subsidy to the Consumer Price Index (CPI). If the average cost of the Silver plan increases at a higher rate than the CPI, the real value of the subsidy will decrease over time.

15 Includes current DSS and state employees ($4.7 billion), LIA expansion ($288 million) and the BHP ($607.5 million to 863.8 million)