OFFICE OF FISCAL ANALYSIS

Legislative Office Building, Room 5200

Hartford, CT 06106 (860) 240-0200

http: //www. cga. ct. gov/ofa

sSB-1204

AN ACT ESTABLISHING THE CONNECTICUT HEALTH INSURANCE EXCHANGE.

OFA Fiscal Note

State Impact: See below

Municipal Impact: None

Explanation

This bill creates the Connecticut Health Insurance Exchange (the Exchange). The Exchange is a quasi-public agency tasked with implementing the insurance exchange requirements of the federal Patient Protection and Affordable Care Act (PPACA).

The Exchange will have ongoing operational costs that will depend upon the administrative structures that are developed by the board. For purposes of comparison, the Commonwealth of Massachusetts (with roughly twice the population of Connecticut), established a health insurance exchange in 2007. Initial operating costs were $19. 5 million in the first year and $29. 9 million in the second year. However, the Massachusetts Exchange is tasked with administering a publically subsidized health insurance program, which is outside the scope of this bill. Therefore, the cost of the Connecticut exchange is likely to be proportionately less.

The bill specifies that the Exchange can charge assessments or user fees to health carriers to generate necessary funding to support operations. Connecticut has received an exchange planning grant from the federal government of $996,848. Under PPACA, additional federal funds are available to assist states in the implementation of the health insurance exchanges. A consortium of the six New England states has already been granted $35. 6 million to develop an on-line gateway to health insurance options.

The Out Years

The annualized ongoing fiscal impact identified above would continue into the future subject to inflation.