OFFICE OF FISCAL ANALYSIS

Legislative Office Building, Room 5200

Hartford, CT 06106 (860) 240-0200

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

SB-921

AN ACT ESTABLISHING A STATE HEALTH INSURANCE EXCHANGE.

AMENDMENT

LCO No.: 7830

File Copy No.: 626

Senate Calendar No.: 385

OFA Fiscal Note

State Impact: See Below

Municipal Impact: None

Explanation

The amendment strikes the language in the underlying bill and the associated fiscal impact, and results in the impact described below.

The amendment 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 the amendment. Therefore, the cost of the Connecticut exchange is likely to be proportionately less.

The amendment specifies that the Exchange can charge assessments or user fees to health carriers to generate necessary funding to support ongoing 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. Due to the ability to charge fees for ongoing costs and the availability of federal funds for the establishment of the Exchange, the amendment is not anticipated to result in a cost to the state General Fund.

The amendment also requires the Office of Health Reform and Innovation, in consultation with the Exchange, to prepare an analysis of the cost impact on the state and a cost-benefit analysis of the federal essential health benefits package. PA 11-6 provides funding of $250, 000 in both FY 12 and FY 13 for three positions to staff this new office.

The preceding Fiscal Impact statement is prepared for the benefit of the members of the General Assembly, solely for the purposes of information, summarization and explanation and does not represent the intent of the General Assembly or either chamber thereof for any purpose. In general, fiscal impacts are based upon a variety of informational sources, including the analyst's professional knowledge. Whenever applicable, agency data is consulted as part of the analysis, however final products do not necessarily reflect an assessment from any specific department.