State Representative Christopher Donovan

Relying on disputed insurance industry math, Gov. Rell picked the last possible moment — and the week’s quietest news cycle — to veto a bill to expand a state health-insurance pool. Condemnation immediately poured in.

The bill, House Bill 5536, An Act Establishing the Connecticut Healthcare Partnership, was the most significant legislation passed this Capitol session to deal with the uninsured and underinsured. It would have enabled tens of thousands of people in the state to lower their insurance bills and in many cases get broader coverage by joining the state workers’ health plan. Eligible would have been small businesses, not-for-profits, and local governments.

In her veto message Friday afternoon, M. Jodi Rell argued that the bill is “not the panacea it purports to be. The Partnership would, instead, do relatively little to increase the number of insured in the state while largely duplicating an existing program at a substantial - and potentially enormous - cost to taxpayers.” She issued the veto on the llast day before it would have otherwise become law, and during the time of the work week when politicians generally take actions for which they desire minimal news coverage.

In an ironic twist, Rell used a memo from the office of one of her top critics, New Haven Mayor John DeStefano, as part of her case for vetoing the bill.

DeStefano ran against Rell two years ago partly on a universal health care platform. This spring he spoke publicly in favor of this pooling bill and urged her to sign it.

However, his office disputed the bill’s sponsors’ argument that it would save the city of New Haven millions of dollars. The city said it would not join the plan because it had already achieved comparable savings, because it has such a large pool of “lives” in its own plan.

Rell quoted that argument, presented in a letter from DeStefano Chief of Staff Sean Matteson to State Rep. Bill Dyson, in her veto message. She left out another argument Matteson has made publicly about the city’s analysis: that the bill would indeed achieve considerable savings for most other, smaller, municipalities that lack a pool as large as New Haven’s.

Only after the bill passed did a major insurer, Anthem, announce that it would have to raise rates for the state employees’ plan as a result. Gov. Rell said she couldn’t sign a bill that would increase state expenditures in the face of a growing deficit.

However, a wide range of politcians and activists disputed Anthem’s last-minute math, claiming it was both illogical (larger pools lower costs) and an effort to maintain higher profits. Also pressing Rell to veto the bill was the Connecticut Business & Industry Association, which stood to lose customers of its own small-business health insurance plan to the new state pool.

Attorney General Dick Blumenthal injected a middle-road position into the debate: He said Anthem’s math was wrong because the state already has a signed contract for the coming year’s health plan that locks in rates. But he also said that that locked-in contract means a second, separate pool would have to be created for people newly signed up to the plan. (Click here to read about that.)

“At a time when health care premiums are rising dramatically, Gov. Rell has taken away a critical tool for small businesses and municipalities to lower their health insurance costs. What a shame,” Williams said in a statement issued by his office Friday afternoon. “I remain committed to passing a health care pooling bill into law and it will be one of our top priorities next legislative session.”

Rell said in her veto message that she’s open to working with legislators to produce a new version of the bill that addresses her concerns.

The need, which becomes more urgent yearly, to fix the health care system in Connecticut, and across the nation, is obvious to just about everyone. The trouble is that just about everyone has a different idea for addressing that need. In Connecticut, at last, in the continuing absence of any federal approach but “leave it alone,” we have a solution, or at least an attempted solution, ready to hand.

It is the health care pooling bill, strongly supported and advocated by Rep. Chris Donovan of Meriden. The simple point is that a large employer, such as the state, with 40,000 workers, has a lot more clout in negotiating with an insurance company than a small employer, a small town with only a couple of hundred workers, or a small business with 8 or 10 employees. Because it is so much more attractive and profitable to administer a health care program for thousands, companies will be more willing to give up a point or two in bargaining and negotiating. A small firm gets a contract: take it or leave it.

Donovan’s bill, by deepening the pool, by increasing the numbers of the group to be covered by insurance, would in theory allow better terms to be negotiated for everyone. The bill, after passage by both houses of the legislature, is now sitting on Governor Rell’s desk. It would enlarge Connecticut pools by permitting municipalities, non-profits and some small businesses to dive into it (or, alternatively, to become part of a pool organized by the Comptroller’s office).

Opponents, who include many business groups and Republicans, don’t deny this concept that larger size brings a stronger negotiating position. Rather, they fret that the insurance companies may reconsider their existing contracts if the pool is increased, assuming that the larger pool will include greater numbers of medically-needy people. They seem to accept one insurer’s assertion that additions to the pool will, ipso facto, raise the state’s rates.

That’s hokum. Worse, they are resorting to scare tactics, and threatening to use the change as an excuse for raising rates — something likely to happen anyway. Any alteration of an existing pool as defined in a present contract would, of course, amount to a change in conditions. But enlarging the pool will take months and years as different entities consider options. Existing contracts expire. New ones will be negotiated. Experience of each new group will be assessed when the groups are determined. It’s an ongoing process. It’s hard to see any real negative. It is surely in an insurance company’s interest to cover larger groups of employees, particularly as more towns and firms turn to “self-insurance” where the insurance company is really an administering agent of employer money — not a risk-assessor. The only way an insurance company would be hurt would be if it had to reduce its per-person charge to meet a competitive bid. Where’s the harm in that for workers or their employers, be those public, non-profit or small business?

Naturally, some large groups of public employees — the city of New Haven seems to be the model — might already have maximized negotiating advantages and have reached lower rates than what the state has negotiated. That’s fine: there is no requirement that New Haven, or any other city or town which sees the numbers this way, join the pool. Many towns and cities, though, could benefit. Clearly, any participating town, non-profit or small business would have to contribute cash to join the state program — just as they now pay their insurers directly. There are administrative expenses — just as there are in every city and town — and no one is likely to argue that there are not advantages of scale in a larger operation.

This bill should become law. Governor Rell, if she cannot bring herself to sign the measure allowing the spirited and intriguing method of spreading the health care dollar (incidentally, a method a number of other states are experimenting with) she should at least withhold her hand and let it become law on June 12. If the experiment flops, she can certainly point the finger of blame at its backers — but Connecticut can say it has made a sincere effort. If it is successful, she’ll be able to point with pride at results.

WILLIMANTIC — State Attorney General Richard Blumenthal, local leaders, small business owners and nonprofit agency leaders were at Windham Town Hall Wednesday to urge Gov. M. Jodi Rell to sign off on a controversial health insurance bill.

The Connecticut Healthcare Partnership Bill, if signed, would open up the state employee health insurance pool to nonprofit groups, small businesses and municipalities.

It also has the potential to save the Town of Windham almost $850,000 in insurance costs.

“There is simply no reason, none whatsoever, to veto this bill,” Blumenthal said, urging the signing of the bill.

Blumenthal said the only reason the governor has considered using her veto powers on the bill is because insurance companies have “wrongly claimed” it would cost the state money.

“This new program will cost nothing,” he said, adding there is “ simply no reason to buy that bogus --
argument” about increased costs from the insurance companies.

He added insurance company claims are legally untenable and completely unfounded. Blumenthal said he would be traveling around the state to urge the signing.

Officials planned to have a rally in Hartford at 3:30 p.m. today and indicated the bill would be sent to the governor’s office today and she has 15 days to decide it.

Windham Selectman Lynne Ide said the program would be voluntary for nonprofits, small business employees and municipalities, but it would ultimately result in more choices, better benefits and lower costs.

She said she wonders how the governor could turn a “deaf ear” to the proposal and urged Rell to sign the bill into law.

Proponents of the bill have said the savings would be created by pooling or combining the state’s bargaining power for lower rates, which would result in savings that Groups cannot be achieved by individual municipalities, nonprofit groups and small businesses.

Rich Harris, a Rell spokesman, said the bill has not yet reached the governor’s desk and the governor hasn’t had a chance to review it yet.

State Rep. Walter Pawelkiewicz, D-Windham, urged the signing of the bill and said a bank in downtown Willimantic said its insurance costs increased 51 percent.

“Health care is a necessity,” he said, adding with the state plan he pays $3 for generic drugs at the pharmacy, $6 for name brand and that when he visits the doctor it is a $15 co-pay — all far less than most private sector employees.

Windham First Selectman Jean de Smet, who testified in Hartford in favor of the bill, said the estimated $850,000 savings the town would achieve could pay for sports and save teaching positions.

She said it is interesting insurance companies have said it would cost more, which shows what a “totally unregulated monopoly” they have.

Bill Potvin, co-owner of Hosmer Mountain Soda, said while the company has made “great soda” for 96 years, it’s difficult to pay insurance premiums while trying to turn a profit.

Jeffrey Beadle, executive director of the Windham Regional Community Council, said if the plan was good enough for chief elected officials and appointed officials, it should be good enough for nonprofits, small businesses and municipalities.

“Don’t veto it unless you’re willing to cancel your policy,” Beadle added.

There are high hopes for new legislation that would let Connecticut towns, small businesses and nonprofits join the state employees' health plan, but it has been hard to gauge how much relief they'd get from high premiums.

Attorney General Richard Blumenthal is about to release a legal opinion that could blunt a major concern of Gov. M. Jodi Rell about the cost to the state, but raises more uncertainty about what towns and others would end up paying for insurance.

The legislation, passed by the House and Senate, is aimed at giving towns and others access to the same rates, broad insurance benefits and low co-payments that the state plan has — presumably a better deal than some towns could get on their own.

Expanding the insurance pool, which has 200,000 state workers, family members and retirees, would give the state even more negotiating power with insurers, proponents believe.

But the legislation, passed without any Republican votes, lit a fiery debate about how well the expanded pool would work. The bill's supporters have been waging a media blitz to pressure Rell — who's considering a veto — to sign the measure.

The Republican governor is concerned because insurers want to raise rates for the whole pool if it is opened to municipalities and others, and the deficit-ridden state wants to avoid paying higher premiums for its workers.

Blumenthal, who was asked for a legal opinion by House Majority Leader Christopher G. Donovan of Meriden, says neither the state nor insurers can unilaterally change the existing three-year contracts. The contracts keep rates for state employees the same as they are now for the state fiscal year starting July 1, and insurers had also agreed to various caps on rate increases in the following two fiscal years.

Blumenthal says the new legislation allows an arrangement that would preserve those terms for state workers, dependents and retirees. Instead of pooling town employees and others with state workers, the state could create a separate pool for municipalities, small employers and nonprofits, Blumenthal said.

The state would then need to obtain separate rates for the new pool for "equivalent" or "substantially the same" coverage as state employees have, he said.

The state could either negotiate rates for the municipal pool with the same insurers covering state employees, which include Anthem, Health Net, and UnitedHealth, or solicit bids in the open market, Blumenthal said. Formal bidding might attract additional insurers, heightening competition.

Either way, "there's no additional cost to the state," said Blumenthal, a Democrat who advocated the bill. "The governor's concern is understandable, but it's the product of scare tactics that are legally completely unfounded."

The state would still have the option of negotiating contracts to pool its employees with those of towns and other groups, he noted.

Meanwhile, even if concern over state costs is assuaged under Blumenthal's scenario, questions remain about how good a deal the state can obtain for towns and other groups and how many would really benefit.

Insurers' major concern has been that opening up the state pool would result in higher claim costs. As a result, Anthem Blue Cross and Blue Shield said it would need to increase rates July 1 for the state health plan and whatever groups are in it by 4 percent, about $24 million.

A small part of that increase would be for added administrative costs because, for instance, each town and other employer that joins the pool would have to be billed individually, said David R. Fusco, president of Anthem in Connecticut.

By raising the specter of a 4 percent increase, "they're trying to influence the governor and scare the governor off from signing the bill," Donovan said in an interview last week. "Who's to say schoolteachers and city employees would drive up the cost?" He said he has heard that municipal workers are younger and possibly healthier on average than state employees.

Insurers aren't saying claim costs for town or small-business employees are higher on a statewide average than for state workers. They're worried, though, that the specific towns and other employers that decide to join the state pool would be higher-risk because rates for them outside the pool would likely be higher.

"If you look at who would be attracted to the opportunity to move to the state plan, our assumption is that it would be only those who have a higher medical cost structure," Fusco said last week before Blumenthal's legal opinion was known. "Rates are a function of medical costs."

Donovan points to the existing state plan to show the power of pooling in negotiating the lowest possible premiums. Fusco, though, said that leverage affects a small portion of the premium — the part that covers administrative costs and other overhead — and profits.

Anthem and Health Net have said they will exercise their contractual right to renegotiate rates for July 1 if the state plan is opened up because that could significantly alter the level of claims.

UnitedHealth has said it would cover municipalities in the state plan at the same rates as for state employees for the first year. That commitment doesn't extend beyond the 2008-09 fiscal year and wouldn't apply to small employers and nonprofits.

It is not known how much interest insurers would have in covering a separate rating pool that would combine towns, small businesses and nonprofits without state employees. Anthem already insures more than 80 percent of the municipal market in Connecticut.

If no insurance companies are interested in serving the new pool, the program envisioned by legislation may stall, Blumenthal acknowledged.

If the plan does proceed, it isn't likely to be the godsend that supporters hoped for or the failure some critics have predicted.

For one thing, insurers could insist on prices that offer little or no advantage to many towns and others. The current annual premium for a family under the state employees' current program ranges from $12,835 to $21,474, depending on the type of plan, with the state paying the lion's share.

Towns that have higher doctor and prescription co-pays than the state employees' plan may not want to "buy up" to the state's richer benefits, which include drug co-pays of $3 and $6. On the other hand, some small firms that are trying to attract and retain professionals with high-quality insurance may find the pool useful.

The new legislation requires towns or other employers who join the state pool to remain in it for at least three years.

It's also not clear 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. Operated by the state comptroller's office, the small program covers more nonprofits than town employees, but a new version is expected to bring in more municipalities.

Debate has swirled around the accuracy of estimated savings towns would enjoy by joining the state employees' plan, partly because benefits in town and state health plans often don't exactly match up. Officials of some towns, though, are optimistic about the new legislation.

Meanwhile, Windham has been told its rates could rise as much as 20 percent on July 1 and is anticipating about 12 percent. So savings through the new legislation "could be a big lifesaver" and save some jobs, said First Selectwoman Jean de Smet. "This would be a great help to our budget and our economy."

MIDDLETOWN — State and local officials want the governor to sign a bill that would make health insurance more affordable for small businesses and municipalities.

Sitting in a row in the council chambers at Middletown City Hall Thursday afternoon, several lawmakers and union representatives explained the benefits of House Bill 5536, “An Act establishing the Connecticut Health care Partnership.”

The bill would make it possible for municipalities, small businesses and non-profits to join the state employee health-insurance plan.

“The lifeboat of any city is small business,” said Mayor Sebastian N. Giuliano.

Business owners complain of their inability to provide insurance as the cost is prohibitive, the mayor and other officials sitting along the dais said.

“They don’t have the bargaining power that cities like Middletown have,” Giuliano said.

Secretary of the State Susan Bysiewicz, also the chief business registrar for the state, said there are over 1,000 businesses registered in Connecticut.

“Their No. One concern is their ability to afford health care,” Bysiewicz said. “Many families I know are just one step away from a medical disaster.”

Business owners tell Bysiewicz they join their local chamber of commerce and expect access to good insurance and wind up disappointed with the cost and quality, she said.

State Sen. Paul Doyle, who represents Cromwell, Newington, Rocky Hill and Wethersfield, said one specific point about the bill that draws his support is that joining the pool would not be mandatory.

“Today we have a bill that’s voluntary; that’s very, very important,” Doyle said.

State Rep. Gail Hamm, who represents Middletown and East Hampton, said she was puzzled by what she viewed as reluctance on the governor’s part to support the bill.

“There’s no risk to the taxpayers and what we really have is the opportunity to give those taxpayers the opportunity to have good health care at a reasonable price,” Hamm said.

“We know right now that one in 10 people in our state have no health insurance,” Bysiewicz said. “I call on the governor to have the courage to stand up against the special interests and to stand up for the small businesses and to stand up for the taxpayers. We all are taxpayers, too, and I urge the governor to sign.”

New London - A group of state legislators, union officials and nonprofit advocates called on Gov. M. Jodi Rell Wednesday to open the state's health insurance pool to municipal and small business workers.

The lawmakers and labor groups are hoping to convince Rell to overcome her skepticism and sign the so-called health care pooling legislation, which would give city and town governments, businesses with 50 or fewer employees and nonprofits the option of covering their employers using the health care plans now offered to state employees.

The lawmakers gathered on the steps of New London City Hall to call on Rell to sign the bill when it reaches her desk, despite warnings from some of the three insurance companies who provide insurance to the state's current pool of more than 200,000 workers and retirees that broadening access could lead them to raise their rates.

Rell, a Republican, has so far refused to state a position on the legislation, which is the chief policy proposal this session of House Majority Leader Chris Donovan, D-Meriden, and is supported by many local legislators.

Signing the bill into law would improve finances for small business owners, increase the attractiveness of the state to younger workers and reduce costs that municipal governments must now pay for with property tax revenues, among other long-stated policy goals of both parties, said Rep. Tom Reynolds, D-Ledyard.

”Here, with one stroke of her pen, the governor with our bill can make a contribution toward addressing every one of those policy issues,” Reynolds said, urging Rell to “not be afraid of innovation and experimentation.”

The bill is vigorously opposed by business lobby groups and some Republicans, who warned it could help erase some or all of the $54 million in state health care savings on which the budget is now precariously balanced.

HARTFORD - John Hopper, owner of a Stamford marketing firm, has supported Gov. M. Jodi Rell because she is a fellow Republican and he believes her leadership is good for small business.

Yesterday, Hopper was at the Capitol to urge Rell to sign a bill that would open the state's health insurance plan to small businesses, municipalities and nonprofit groups.

"I voted for Governor Rell," said Hopper, a Greenwich resident. "I want her to vote yes for this."

Hopper joined a news conference organized by House Majority Leader Christopher Donovan, D-Meriden, and Secretary of the State Susan Bysiewicz, also a Democrat, to pressure Rell to back the measure, called health-care pooling.

During a visit to Stamford last week, the Republican governor said she had "serious reservations" about the proposal.
But Democrat Ned Lamont, a Greenwich cable entrepreneur and former U.S. Senate candidate, said such a health-care pool would help small businesses stay competitive.

"Jobs are leaving the state. Young people are leaving the state. Business consultants are saying Connecticut is too old, too cold and too expensive," Lamont said.

The state House of Representatives passed the legislation last month, 102-43. The state Senate approved the bill this month, 22-12. Both bodies have Democrat majorities.

Donovan and Bysiewicz say adding municipal, small business and nonprofit employees to the 200,000 insured state workers would create greater savings when the health plan is put out to bid to major insurers. Earlier this year, they spent several weeks touting their proposal in Stamford, Norwalk and other cities.

"With this bill, we could have a big win for the people of Connecticut," Donovan said.

But state budget director Robert Genuario of Norwalk has said it could mean a big hit to the state budget.

Earlier this year, he told lawmakers the state stands to lose $54 million in cost savings it achieved by going out to bid for health insurance. Insurers have threatened to revise their proposals if more people are added, Genuario said.

During a visit to Stamford on Thursday, Rell, whose office is launching its own health insurance plan for uninsured adults, said she has "some serious reservations" about the Donovan bill.

Monday, her office released a letter she received that day from Anthem Blue Cross and Blue Shield President David Fusco, who said the insurer would exercise its right to "re-rate" the state insurance plan and raise its rates if the pooling bill were signed.

Donovan said that the state already saved $54 million by pooling employees proves the concept works. He said the Rell administration could not negotiate the same or increased savings if the health plan were opened to more takers.

"The governor showed she can get tough with Anthem," Donovan said, referring to her decision last year to terminate a contract with Anthem for children's health insurance after the provider refused to comply with the Freedom of Information Act. "Get tough. Negotiate for us."

The Connecticut Business & Industry Association also asked Rell to veto the bill.

The association, which sells its own insurance to members, and big insurance companies are "special interests" trying to kill the bill for fear of competition, Bysiewicz said.

Eric George, an attorney for the Connecticut Business & Industry Association, said businesses do not understand that if they join the state pool they are locked in for three years and could face unanticipated rate hikes.

"We're concerned some businesses might have a misunderstanding this is a rate lock," George said.

Hopper said he looked at the association when he was shopping for health insurance for his company, Power Marketing Partners, which has five full-time employees and 15 part-timers.

It was too expensive, Hopper said. His company now is insured through a New York firm, he said.

Joining the state's health plan would allow him to focus resources on expanding his business while providing more affordable health care for his employees, Hopper said.

Lamont, founder of Campus Televideo, said there is nothing wrong with a little competition for insurers. Next time he meets with his insurance broker "maybe I'll leave open on my desk Chris Donovan's bill and say, 'Hey, I've got another option here,' " Lamont said.

That was the reason some lawmakers from lower Fairfield County voted for the bill.

Although the mayors of Stamford and Norwalk have said they do not believe it would help, lawmakers say the added competition would force health insurers to offer better deals for fear they would lose clients to the state pool.

Many Republican lawmakers have said pooling is a step toward government-run health insurance in Connecticut.

But Donovan said if the bill became law he would like to see the state's health insurance plan opened to everyone eventually.

Norwalk's Democratic delegation and some small businesses plan a press conference Friday at Norwalk Music Studios, 120 New Canaan Ave., to support health-care pooling.

HARTFORD — House Majority Leader Christopher G. Donovan and Secretary of the State Susan Bysiewicz on Tuesday turned the heat up on Gov. M. Jodi Rell in an attempt to prevent the veto of a health-care- pooling bill.

Bysiewicz and Donovan, D-Meriden, appearing with three southwestern Connecticut business executives, said the potential savings for cities, towns, small businesses and nonprofit agencies could be significant at a time when the insurance industry needs more competition.

During a morning news conference in her Capitol office, Bysiewicz and Donovan noted that the state has already saved $54 million this year in renegotiated benefits for more than 200,000 state employees and retirees, plus another $16 million in prescription- benefits savings. By increasing the pool further, there could be additional savings for new enrollees, they said.

Donovan said the new members from municipalities, nonprofit groups and small businesses would generally be younger and in better health than state employees.

“With this bill we can have a big win for the people of Connecticut,” Donovan said. “ Now we are looking for the governor to pick up where we left off and give a win to small businesses, cities and towns and nonprofits.”

He said it makes sense that adding more people to the pool would result in more savings.

Jessica Sagar, executive director of All of Our Kin, a nonprofit early childhood education agency in New Haven, said insurance costs amount to 8 percent of her budget and every dollar spent on health care is less that can be invested in programming.

“As all nonprofits are called on to do more with a dollar in the coming times, I hope that we’ll support programs like this that can help us really do the most for the people who need us,” Sagar said.

But Sarah S. Yeager, director of corporate communications for Anthem Blue Cross and Blue Shield in Connecticut — one of three insurers that underwrite the state-employee program — said Tuesday that a larger pool of participants would require a recalculation of rates.

“We believe that the groups that will be attracted to this plan are paying a higher rate already,” Yeager said in an e-mail message, noting that rates are driven by claim utilization.

“We believe that only groups whose existing health-care plans are more expensive than the current state employee health plan will be attracted to this plan,” she said. “This will elevate the cost of the state em-ployee health plan.”

While the legislation passed with significant margins in the House and Senate, with only 23 Democrats in the 36- member Senate, a gubernatorial veto is unlikely to be overridden there because a two- thirds margin is needed. Donovan said he tried to have a meeting with Rell on the issue, but has not heard back from her office.

Bysiewicz, who officially presents bills to the governor after they are drafted by the Legislative Commissioner’s Office, said she had not yet received the controversial legislation, which has already been adopted by two dozen states.

HARTFORD (AP) — Some well-known Connecticut Democrats urged Republican Gov. M. Jodi Rell on Tuesday to sign legislation that lets nonprofit agencies, municipalities and some small businesses join the state health insurance pool.

It came as Anthem Blue Cross and Blue Shield, one of three insurers covering state employees, threatened to increase rates by $24 million if Rell signs the legislation into law.

House Majority Leader Chris Donovan questioned whether that figure is final, saying he thinks rates will drop when the number of health plan members increases.

Secretary of the State Susan Bysiewicz and former U.S. Senate candidate Ned Lamont joined Donovan at a state Capitol news conference on the topic Tuesday. Lamont, who owns a cable television services company, said the program would help businesses hold down their costs and ultimately expand in Connecticut.

“What you’re doing is giving small businesses a choice. You’re giving small businesses an option,” he said.

Health Net and United Healthcare, which cover state workers along with Anthem, also have expressed concerns with the bill. Connecti Care Inc., which does not cover state workers, also is urging Rell to veto the bill because it thinks the measure would hurt competition in the private market.

The state’s largest business organization, Connecticut Business and Industry Association, is also urging Rell to veto the bill. Eric George, associate counsel for the group, said it worries participating businesses would be locked into the new system for three years.

Rell has also said she is concerned that the bill could risk about $54 million in savings the state is expecting after renegotiating rates with the three insurers.

Public employee unions and health care advocates are putting the pressure on Republican Gov. M. Jodi Rell to sign a bill that would allow municipalities, nonprofits, and small businesses to join the 200,000-member state employee’s insurance plan.

During a conference call last Thursday, lawmakers, advocates, and academics talked about the benefits of the bill, which they said will increase the state’s bargaining power and lower risk through the creation of a larger insurance pool. But most of the insurance companies that currently administer the state insurance plan aren’t buying into Majority Leader Chris Donovan’s logic.

Donovan likes to call the bill “a no brainer,” but big insurance companies like Anthem are not enthusiastic about the idea.

In an April 17 letter to lawmaker’s Anthem’s President David Fusco wrote, “We believe that only those groups whose underlying utilization and cost structure are higher than the current State of Connecticut employee population will ultimately be attracted to the plan. The result of this change in population and claims cost will undoubtedly elevate the cost of the State of Connecticut employee health plan.”

Donovan countered Thursday that if Anthem is not interested there are other companies like United Health that are interested.

Professor Jacob Hacker from Yale University said insurance companies are going to be worried about to what extent there would be adverse selection if groups of individuals currently not covered by the plan were allowed to join. However, he said, the bill includes provisions to allow for the evaluation of risk.

Donovan said the average age of employees currently in the state employees plan is 48 years old. “That’s high,” he said. He said bringing in new groups would lower the age and lower the risk to insurance companies.

Lynne Ide of the Universal Health Care Foundation of Connecticut said the bill would encourage competition, which “is stifled right now.” She said the bill’s biggest opponent, the Connecticut Business and Industry Association, has a self-interest in the seeing the bill die because it sells insurance to small businesses.

“The business community will ask Gov. Rell to veto the health care bill because it doesn’t address the key issue of rising health care costs,” CBIA said in its summary of the legislative session. “Real health care reform will reduce cost drivers, improve the quality of care and provide the uninsured access to health care. Businesses and state residents alike believe the health care system should remain mainly in the private sector.”

Ide said she doesn’t believe the bill’s intent, as portrayed by CBIA, is to establish a full governmental takeover of the health care system.

Secretary of State Susan Bysiewicz said small businesses are enthusiastic about the plan because many that offer insurance to their employees are paying high premiums. She said one business she spoke to pays $12,000 a year for an individual employee and $25,000 a year for family coverage. She said under the state plan they would be paying $5,000 for an individual and $12,000 to $13,000 for a family of four.

Donovan said early on he tried to get the governor’s staff on board with the idea of expanding the state employees pool and they sounded interested, but then he never heard back from them. He said he would continue to encourage them to sign the bill.

Rell has not yet received the bill, but Donovan anticipates that it will reach her desk sometime after the Memorial Day holiday. Once Rell receives it she has 15 days to decide whether to sign it.

Since last year, I have been traveling around the state speaking to groups about health care. Everywhere I went, I asked the same question: "Who wants a bad health care plan?" While there is usually one wise guy in the crowd, I have still never received a sincere "yes."

The truth is, everyone wants a good health care plan at an affordable price. I've made it my goal to try to find a way to provide that to people. In fact, we passed legislation that would provide quality health insurance all the while saving money — we just need the governor to sign the bill.

Here in Connecticut we have a good health care plan for state employees. It is the plan that I have and the plan that Gov. M. Jodi Rell has. We pay $3 and $6 co-pays for prescription drugs, and doctor visits are either $10 or $15 in a statewide network of doctors. The best part is that we have an opportunity to expand this plan to others at an affordable cost.

The Connecticut Healthcare Partnership will allow municipalities, small businesses and nonprofits to voluntarily join the state employee health insurance plan, creating a large pool of insured people. This massive insurance pool would lead to increased bargaining power when it is time to negotiate with insurance providers and lower costs for everyone involved. We have calculated big savings for cities and towns, and that would translate big savings for taxpayers.

By comparing the current costs for municipal employees with the current state employees' costs for a similar benefit plan, we estimated savings for Danbury at $3 million, Groton at $1.1 million, and Windham at $800,000, to name just a few.

The opposition to this bill would have you believe that the savings don't add up, but their comparisons look only at the state's most expensive plan (a plan that even most state employees avoid). A true comparison would show all of the options that state employees have — most that range from approximately $13,000 to $17,000/year for family coverage and $5,000 to $6,000/year for individuals, including dental.

The co-pays are the same. The benefits are the same. The price depends on the network that you choose and whether you want a primary-care physician as a gatekeeper. This is all about providing options to employers. They can choose the plan and price that makes sense for them on a voluntary basis.

The sheer volume of the state's pool of more than 200,000 people puts us in a strong position when it comes time to negotiate rates. This year there is a 0.0 percent increase in the state's health insurance costs for employees and retirees. Show me a private-sector business in the state that has seen a flat line on their health insurance — it doesn't exist. This is the power of more than 200,000 people.

By opening the state plan and working together to create this partnership, we will be able to provide municipalities and employers with the option of quality health care that costs less. As one small-business owner said to me, "Can we do this yesterday?"

Christopher G. Donovan, D-Meriden, represents the 84th Assembly District and is majority leader of the state House of Representatives.

PRESSURE GROWS FOR RELL TO SIGN BILL
Plan would expand pool for health care coverage

Legislators and small businesses are continuing to lobby the governor to sign a bill that would allow pooling of private employees and municipal employees with state workers in order to reduce health care insurance costs.

A bill authored by state House Majority Leader Christopher Donovan, D-Meriden, passed the House and Senate and will be sent to Gov. M. Jodi Rell for her signature after the Memorial Day weekend, at which point she has 15 days in which to veto it or it automatically becomes law.

John Hopper, president of a small marketing firm in Stamford, said he was “pretty passionate” that opening this pool to his five full-time employees and their families would help level the playing field in competing with bigger companies and allow him to grow his business.

Hopper, a Republican who voted for Rell, said he e-mailed her urging that she let the health options go into effect.

Jacob Hacker, Yale professor of political science and an expert on health care, in a conference call on the bill Thursday, said the market is “quite dysfunctional” for small businesses that pay administrative costs as high as 40 percent for inferior insurance, despite often having a younger work force with fewer health risks.

By spreading risk over a larger group of individuals, there is more leverage to negotiate with insurance companies, he said.

“This creates a new institutional foundation,” as Connecticut is the first to add small businesses and nonprofits, as well as municipalities to the pool, something that is being watched across the country.

Donovan said the average age of the 200,000 state employees and their family members and retirees is 48, and the group, which includes police, corrections officers and other high stress jobs, means they are probably less healthy than at other businesses, but still they pay less for health insurance because the risk is spread among many.

Rell is being advised by the state Office of Policy and Management that two of three insurance companies providing insurance for state workers have said they will seek new bids if she signs the pooling plan and OPM worries a zero percent premium increase for 2008-09, saving some $54 million, will disappear.

Jeffrey Beckham of OPM argued only small firms and municipalities with high payouts will opt for the state plans, thus adversely affecting the risk pool and threatening the savings.

Joshua Nassi, an analyst with Donovan’s office, however, said there is a review committee set up to not allow municipalities or companies to offer the state plan only to their sickest members.

As for Health Net of the Northeast and Anthem Blue Cross and Blue Shield ceding the market to UnitedHealth Group as the lone insurer willing to maintain its zero premium increases next year, Nassi thought this was a false threat.

“That’s a lot of workers to give up,” said Sal Luciano, executive director of Association of Federal, State, County and Municipal Employees, Council 4.

The Connecticut Business and Industry Association has said the pooling plan is the beginning of a single payor system for the state. Critics countered that the lobbying group has a conflict of interest in that it offers its own insurance plans for small businesses.

Hacker said pooling, with adverse risk control factors, just offers more access to private health plans, which increases choice and competition.

Donovan said he hopes to have more dialogue with Rell. Rell has said she will not sign a bill that adds costs to the $18.4 billion state budget for 2008-09 because of a projected drop in state revenues. The pooling bill needs $500,000 to implement.

One of the finer achievements of the 2008 General Assembly was passage of legislation that would allow municipalities, nonprofit groups and small businesses to join the state employee health insurance pool.

Discussed and debated in the Capitol since the early 1990s, the measure represents the first major initiative state lawmakers have taken in many years to try to rein in soaring health care costs. The argument is that by expanding the state's current gigantic number of workers in its health coverage pool, the state would have even more bargaining power with insurance companies to cut costs and find savings.

We've supported the measure as it wended its way through this year's assembly, and we now urge Gov. M. Jodi Rell to sign it into law, despite protestations and threats from the insurance industry, which claims it could have an impact on major savings the state made in recently renegotiating its state employee health plans.

But look at the record: Twenty-four states already allow municipalities into their state health coverage pools, and more are considering it.

Connecticut's measure is historic because it is the first such law that opens the pool to the private sector - in this case, small businesses with fewer than 50 employees. Small businesses are becoming the backbone of the state's economy, but many do not provide health insurance options for their workers. This measure would help reduce the number of uninsured.

voluntary; no one is mandated to join. Indeed, for some communities, there may be no savings.

Supporters of the bill claim there are significant savings to be had for municipalities, but opponents argue there may not be.

In a conference call with editorial page editors last week. Ms. Rell said she is leaning against signing the bill because it would require opening contracts with existing insurance providers and could result in the state losing up to $54 million in savings.

That is certainly a concern, especially in a state staring at a deficit from our troubled economy. But every effort should be made with providers to make this initiative work.

For this we do know: For municipalities and nonprofits, it would provide another option in health care coverage for their employees. If there are savings, it would provide property tax relief at the local level for beleaguered taxpayers.

There is already one state health care plan that caters to municipalities, and another is starting through the state comptroller's office. This would be simply a third option.

Connecticut must make the effort. States must lead the charge in attempting to hold down health care costs. Action in Congress on similar proposals that would apply nationally, such as the Shays-Langevin bill, remains years away.

State lawmakers in this case engaged in creative thinking on a major issue. Their voluntary proposal carries the potential to reduce costs and perhaps even increase competition. If Gov. Rell signs the measure into law, at least the initiative can be tested.

The state Senate debated Majority Leader Chris Donovan’s Connecticut Health Care Partnership bill that would allow municipalities, nonprofits and small businesses to join the state employees health insurance plan into the early morning hours Wednesday.

Republicans tried to introduce their budget amendment twice to the bill, but were unsuccessful. Instead they continued with a flurry of amendments to the underlying bill, which the Governor’s Budget Secretary has said could cost the state $54 million in health care savings in fiscal year 2009.

Proponents of the bill said the bill would lower health care costs for cities and towns, while opponents said two out of the three health insurance companies that administer the plans for the state have said they would re-rate their bids if the state forced them to expand their pools to include more people and possibly more risk.

“Anthem believes that if this legislation passes, the underlying assumptions used to develop the pricing of the State health insurance plans during the most recent RFP process would be negatively impacted,” Anthem’s President David Fusco said in an April 17 letter to the state.

Sen. Edith Prague, D-Columbia, said city’s like Danbury could save $2.8 million by voluntarily joining the state employees pool.

Sen. David Cappiello, R-Danbury, said that’s not what his local officials have told him. “They said it would actually cost Danbury millions and millions of dollars a year,” he said.

Cappiello used the opening by Prague as an opportunity to amend the Republican budget to the bill. “With 24 hours to go, we in this body can make an attempt to do something to the state budget,” Cappiello said.

Republican Lt. Gov. Michael Fedele ruled Cappiello’s budget amendment germane to the underlying pooling bill, but the Democratic majority was able to overturn his decision on both Republican budget amendments.

Standing outside the Senate chamber, Phil Sherwood, a New Britain alderman and lobbyist for Connecticut Citizens Action Group, said Cappiello shouldn’t even be voting on this bill because his wife works for Anthem, one of the insurance companies that said it would have to re-rate its bids if the legislature passed this bill.

Cappiello said he received a letter from the Office of State Ethics saying there was no conflict of interest because the bill would not directly benefit his wife. And “I argued the merit of the budget amendments, not the underlying bill,” he said.

Sherwood, a proponent of the bill, said it would save the city of New Britain $900,000.

The Senate voted early today to give final legislative approval to a Democratic bill permitting municipalities, nonprofits and small businesses to join the state employee health insurance pool.

Approval came at 1:51 a.m. on 22-12 vote. All 11 Republicans present opposed the measure, as did one Democrat, Joan Hartley of Waterbury. It now goes to Gov. M. Jodi Rell.

"I just think it is a great opportunity for the state," said House Majority Leader Chris Donovan, D-Meriden, a lead sponsor. "I hope she realizes it and supports it."

A progressive coalition backing the bill says that the greater buying power of the pool will save municipalities significant dollars in a year when the state has retreated from an earlier promise to boost some forms of state aid.

Robert Genuario, the state budget director, warned legislators that his office's research sees added costs for the state and little or no savings for municipalities. Senate Minority Leader John McKinney, R-Fairfield, said the state pool can reject clients, so even if it sames some organizations money, it may drive up rates for those outside the pool.

"I don't believe a government-run health system is better than the market," McKinney said.

"Health-care pooling is a win-win situation," said Sal Luciano, executive director of Council 4, AFSCME. "It's a way to respond to soaring health care costs and to expand quality, affordable coverage to more citizens. It's a way to provide property-tax relief and protect services for the elderly and our kids."

Senate President Pro Tem Donald E. Williams Jr., D-Brooklyn, said no one needs to fear the voluntary program.

The Senate resumes business at noon. The House is scheduled to come in at 10 a.m.

A CHANCE TO LEVEL THE PLAYING FIELD
State should approve health insurance initiative

Everyone knows that individuals and small employers face crushing health insurance costs when they try to buy coverage on their own. But state legislators in Hartford are about to take a simple yet far-reaching step to address the problem.

By allowing municipalities and small businesses to buy into the group plan currently provided to state employees, the recently introduced Connecticut Healthcare Partnership would give working families the clout they need to negotiate a better deal for health insurance.

The reason big retailers like Wal-Mart can push down prices is that it uses the clout of its thousands of stores and millions of customers to demand deep discounts from the companies it buys from. The Connecticut Healthcare Partnership would operate on a similar principle. By expanding the clout of individuals to collectively demand that insurance companies lower prices and improve service, the plan would make what’s “good for business” good for families, too.

The Connecticut House of Representatives last week passed the Connecticut Healthcare Partnership. By pooling small businesses together with nonprofits and state and local employees, the partnership proposes to increase the bargaining power of all parties in the pool and foster greater competition among insurance companies. If the state Senate and Gov. M. Jodi Rell follow suit, employers will be able to provide their employees with more extensive coverage with lower premiums, deductibles and co-pays. It would be a boon for small businesses and workers alike.

With more than 200,000 members, the state employee plan already bargains with the health insurance industry for steeply discounted rates. Expanding its membership to include small businesses and other employers will not only help those joining the group plan, but will give the state employee pool the leverage to demand even better deals.

Already, the state has negotiated a 0 percent increase in rates for next year and saved $54 million. You’d be hard-pressed to find a small business or town office in Connecticut that has been able to negotiate a 0 percent increase for quality employee health insurance.

To the contrary, small businesses and families in Connecticut are reeling from the spiraling cost of health insurance. In 2005, family coverage rates in Connecticut were sixth-highest in the country. From 2000 to 2006, family rates spiked by 77 percent while median household earnings climbed a mere 13 percent. Health insurance costs are crowding out wages, leaving families with fewer resources to combat the rising price of food, gas and education.

Of course, the gigantic health insurance companies and their lobbyists oppose legislation to fix this problem. After all, it is a threat to their profits. Close by in Pennsylvania, news that one of the state’s largest insurers, Highmark, posted a $3.5 billion surplus has stunned advocates for affordable health care. According to the National Association of Insurance Commissioners, this surplus is 3.5 times more than what is needed in the event of unforeseen medical claims. Nationwide, the health insurance industry has more than $600 billion in retained surplus, money the industry holds onto each year and goes to great lengths to protect.

In 2006, the health insurance industry contributed $33.5 million to candidates for state legislatures. The same year, the industry spent $133 million lobbying Congress to beat back sensible health-care reform, second only to the $182 million spent by the drug industry. The dirty secret is that, like their excess profits, those lobbying dollars are fueled by our skyrocketing health insurance premiums.

If the status quo persists, the health insurance industry will continue to use its clout to muscle ever-higher premiums, deductibles and co-pays from small businesses and families who do not have leverage to push back — all in pursuit of ever-higher profits.

Connecticut’s state Senate must defy the insurance lobby and enact the Connecticut Healthcare Partnership. By giving small businesses, local communities and employees the clout they need to push back and negotiate real value for their health-care dollar, it would set an important precedent for health care reform across the country.

In Connecticut, as in the rest of the nation, the bargaining process has been tilted toward the interests of profiteering health insurance companies for far too long. This legislation is a crucial first step toward leveling the playing field.

Adam Thompson is the Senior Health Care Policy Specialist with the Progressive States Network, a nonprofit group that works to implement state-level policies that advance the interests of working families.

HARTFORD — The House of Representatives Tuesday night voted 102-43 to expand the state employee's insurance plan to municipalities, small businesses and non-profit groups.

House Majority Leader Christopher G. Donovan, the chief proponent of the legislation, which he worked on for about two years, said the idea deserves a chance.

"'I think we can save a lot of money and keep people healthy," he said shortly before the 9:45 p.m. vote.

House Minority Leader Lawrence F. Cafero Jr., R- Norwalk, said the bill is a step toward so-called single-payer universal health care.

"You might want that, or some might want that," Cafero said, gesturing toward the Democatic majority, "but I know a heckuva lot of people don't." If the bill is enacted into law, he warned, it may result in higher costs for all participants.

The legislation was introduced for debate by Rep. Melissa Olson, D-Norwich, shortly after 5 p.m.

“This is a voluntary plan and voluntary language, which arose out of respect for local autonomy,” Olson said. “Arbitrators cannot order unions to participate in the state plan.”

The legislation is a priority for House Majority Leader Christopher G. Donovan, D-Meriden, who said that if the plan were adopted, it could double the number of participants and bring quality health care coverage to municipalities, businesses with fewer than 50 employees and nonprofit agencies.

Speaker of the House James A. Amann, D-Milford, said the federal government is leaving the states behind, so last year the Healthy Kids initiative was enacted and this year the health-insurance partnership is being proposed.

James Finley, executive director of the Connecticut Conference of Municipalities, speaking during the news conference with Democratic leaders, stressed the voluntary aspect of the proposal.

“We think it provides a real opportunity for cities and towns that are hurting across our state to make their property- tax dollars go a little further and provide some relief for the residential and business-property tax payers in Connecticut,” Finley said.

It would cost about $400,000 in administrative costs to start up. State Comptroller Nancy Wyman has offered similar coverage, but through the creation of a separate pool for municipalities.

The Rell administration Wednesday warned that expanding the program beyond the current 250,000 participants could scare off insurers and eliminate more than $50 million in savings the state realized this year when the benefits were publicly bid.

At least one of the state’s insurers, in a letter to state officials, said expanding the pool of employees and retirees would change the terms of its contract and require a recalculation of costs.

“We believe this bill will result in higher overall costs to the State of Connecticut in funding the employee health plan and will dilute the savings that the State employee health plan is expected to generate in the upcoming plan year commencing July 1, 2008,” wrote David R. Fusco, president of Anthem Blue Cross and Blue Shield in Connecticut.

After more than four hours of debate Wednesday night a bill that allows municipal employees, small businesses, and nonprofits join the state employees health insurance plan passed the House on a largely party-line vote.

The overall bill passed 102-43, but an amendment which included the main provisions of the bill passed with only one Democrat, Rep. Linda Schofield of Simsbury, voting against it. The bill now heads to the Senate.

“This makes the few hairs I have left on my head hurt,” Minority Leader Lawrence Cafero, R-Norwalk, said in the middle of the debate Wednesday. He said he’s concerned that if certain people come into the insurance pool they may drive up costs.

Cafero said the insurance companies that administer the state employee plan are telling the state this bill changes the negotiated rates and “we can’t guarantee our price because the risk may change,” if more people are allowed to join the pool.

Rep. Melissa Olson, D-Norwich, said the four companies don’t have to accept any new people if they don’t want to. She said the insurance companies will be motivated to add people to the pool because “we know they’re earning money, so it must be working for them.” The way insurance companies make money is by adding more lives to the pool, she said. She said she can’t imagine that the companies would walk away from new business.

Office of Policy and Management Secretary Robert Genuario said in a letter to legislative leaders that the four companies administering the state program would have to re-rate their bids immediately if the bill passed, leaving a potential $54 million hole in the state budget.

HARTFORD — The House of Representatives approved a bill Wednesday that would open the state employee health insurance program to towns, small businesses, and nonprofit agencies.

But the measure, which appeared headed for trouble until advocates pledged not to force towns into the system, could punch a hole worth tens of millions of dollars in next year’s state budget.

And while Gov. M. Jodi Rell hasn’t said whether she’ll sign the bill — which still must be considered by the Senate — her budget office warned it could drive up expenses in one of the fastest-growing and largest components of the state budget.

“This is a beneficial thing for so many people,” House Majority Leader Christopher G. Donovan, D-Meriden, who spearheaded the bill, said shortly before the Democrat-controlled House adopted it in a 102-43 vote along party lines. “We’ve been working so hard on this for two years now, and I think the potential is tremendous.”

The state, which lawmakers acknowledge offers some of the most beneficial yet affordable health care plans to its workers, is able to leverage huge savings while negotiating with insurance companies.

Both the size of the state health care pool — more than 200,000 employees, retirees, and dependents — and the influence of state government help produce the savings.

Just over $1 billion of this year’s $17.6 billion budget will pay for coverage. The state negotiated for no rate increases next year, and already is projected to save $54 million.

Donovan said that by opening this plan to towns, businesses with 50 employees or less, and nonprofit groups — which provide the bulk of state-ordered social services in Connecticut — there is a great opportunity to extend affordable, better benefits to tens of thousands more people.

But some community officials have argued that even with the big savings the state negotiates, it would cost them more to provide the superior insurance to employees.

The Connecticut Conference of Municipalities was prepared to fight the bill until advocates offered a last-minute compromise, agreeing that no community or municipal union could force the other to join by taking the issue to a binding arbitration panel during contract talks.

“That was a big step, and now we’re confident the plan is purely voluntary,” CCM Executive Director James Finley said.

Rell’s budget director, Office of Policy and Management Secretary Robert L. Genuario, said the proposal would put at risk a good portion of the state’s projected $54 million savings.

Two of the three companies that provide the state with health insurance have warned they’ll immediately reopen talks and set new rates if the health care pooling bill becomes law because of the changed risk. The third company said it would re-rate as well, after one year.

“These additional costs to the state are not budgeted anywhere and additional resources would have to be budgeted if the bill passes,” Genuario wrote to lawmakers this week.

House Minority Leader Lawrence F. Cafero Jr., R-Norwalk, said he fears the legislation could add millions of dollars to insurance costs at a time when state revenue is slowing.

And with health care and insurance costs among the fastest-growing state expenses, the potential for a huge increase in state coverage costs in years to come is real, opponents added.

HARTFORD — An amendment to a state bill that would allow small businesses, nonprofits and municipalities to join the state employee health insurance plan has won the backing of the Connecticut Conference of Municipalities.

CCM joins the ranks of House Bill 5536 supporters such as House Majority Leader Christopher Donovan, D-Meriden, and Secretary of the State Susan Bysiewicz.

Gian-Carl Casa, director of public policy and advocacy for CCM, said the organization endorsed the bill once it was changed to allow cities and towns to join voluntarily, and a provision was added giving municipalities the option to pool their employees with each other instead of with the state.

Both approaches are meant to create a large pool of people and thereby increase overall bargaining power while lowering costs.

The House approved the bill Wednesday. The Senate is expected to vote next week.

“We’re supportive of the bill as it will be amended by the House,” Casa said.

“What’s most important is that municipalities be able to judge for themselves case by case, town by town.”

But Gov. M. Jodi Rell’s administration and the Connecticut Business & Industry Association have reservations about the proposal.

The state recently rebid its state employee health care plan and was able to save about $54 million.

State Office of Policy and Management administrators say two of the three insurers that offer policies to state employees plan to immediately re-rate their bids if the bill passes.

“That’s most likely going to be going up,” said Eric George, associate counsel for CBIA, which helps procure health insurance plans for its members.

The association objects to language that exempts the state-sponsored plan from state health care laws and makes enrollment mandatory for three-year increments.

CBIA memberss shop around for the most affordable rates annually, George said, but under the bill, participants would be “locked in” for three years, even if rates spike in the second or third year of enrollment.

HARTFORD — A bill that would allow municipalities, small businesses and nonprofit organizations to join the state’s health insurance plan was passed 102-43 by the House of Representatives Wednesday after nearly five hours of debate.

Supporters of the bill say a partnership would increase bargaining power and lower costs, but opponents question whether a health care partnership would be truly beneficial, calling the projected savings highly optimistic.

“This is no small matter,” said Rep. Antonietta Boucher, R-Wilton. “It’s a very large matter, and that’s why many of us have questions.”

House Majority Leader Christopher G. Donovan, DMeriden, has pushed the bill through the legislative process, but before a health care partnership can be formed, the bill must be passed by the Senate and signed by Gov. M. Jodi Rell. Donovan has traveled throughout the state to talk about the partnership, dubbed the health care pooling bill and said to be a first step toward universal health care in Connecticut. Municipalities such as Meriden are expected to save nearly $2 million under the plan.

The state Office of Fiscal Analysis says the partnership would cost the state $500,000 in fiscal year 2008-2009. The expense would pay for new positions in the comptroller’s office that are necessary to run the program.
While House Bill 5536 is supported by many, including unions and the Connecticut Conference of Municipalities, there are those who have spoken against it.

The governor’s budget director, Robert L. Genuario, has questioned the bill. Genuario has said opening the state health care plan would allow those who bid on the state employees to re-rate their bids, and additional costs are not budgeted. The bidding process locked in prices for the state plan for fiscal year 2009 and provided a cap on increases for fiscal years 2010 and 2011 — numbers used in both the governor’s budget and the budget passed by the Appropriations Insurance companies, such as Anthem Blue Cross and Blue Shield, also have told state officials they have reservations about the bill.

“If you are anything like me, this stuff is confusing,” said House Minority Leader Lawrence F. Cafero Jr., R-Norwalk, during Wednesday’s debate.

Cafero said one of his concerns is the health care cost containment committee that would be created under the legislation. The committee would be the body that determines who can come into the plan, and it would have the right to reject certain high-risk applicants, Cafero said. Proponents of the bill are recognizing that risks might change and taking a chance during tough economic times is difficult, he said.

“We’re taking the dice and rolling it,” Cafero said. “This affects lives, and it has the potential to affect them in a negative manner.”

Rep. Melissa M. Olson, DNorwich, who was responsible for explaining the bill’s details during the debate, told her colleagues that they had an opportunity to make a difference. Quality, affordable health care is needed, she said.

Olson stressed during the debate that the partnership would be voluntary. She also repeatedly said the bill would not change collective bargaining and arbitration law. Initial participation would be voluntary and would happen because of mutual agreement, she said. Once an employer enters into the partnership, however, it must offer the state’s plan as a health insurance option to unionized workers, which could eventually lead to binding arbitration.

Donovan characterized Wednesday’s debate as wonderful, and reminded lawmakers that health care is not a partisan issue.

“I think this is a great moment to tell people we’re breaking down differences,” Donovan said.

The state House of Representatives passed historic legislation Wednesday designed to cut skyrocketing health care costs by allowing more people to join the state employee health insurance pool.

The bill would permit municipalities, nonprofit groups and small businesses with fewer than 50 employees to voluntarily join the state's gigantic pool, thus driving a hard bargain on costs and saving money. Democrats have pushed the bill for years, dating at least from 1991, when the idea was broached by then-Comptroller Bill Curry.

But the bill passed this time because it was pushed by one of the General Assembly's most influential members — House Majority Leader Christopher Donovan of Meriden. As a key player in the 107-member House majority, Donovan was able to gather enough votes to ensure passage. Nationally, 24 states allow municipalities in their pools, and others are considering it.

In a debate that lasted more than 4½ hours and finished shortly before 10 p.m., the House approved the overall bill by 102-43 on a largely party-line vote. The chamber had earlier approved the main provisions of the bill with only one Democrat, Rep. Linda Schofield of Simsbury, voting against it. The bill now goes to the Senate, where proponents are hopeful of passage.

Despite enthusiasm by Democrats, the idea was immediately blasted by a powerful coalition that includes Republican Gov. M. Jodi Rell's budget office and the Connecticut Business and Industry Association — the state's largest business lobby.

"While this bill has been touted as saving significant dollars for municipalities, our research indicates that is not the case," Rell's budget director, Robert Genuario, said in a letter to top legislators. "Thus, if passage of the bill will cost the state money and there is little or no savings for municipalities, the bill should not be acted upon."

Rell's office declined to comment Wednesday night on whether she intends to veto the bill.

A major problem with the bill, opponents said, is that it could place in jeopardy $54 million in projected savings that the state expects to receive under recent contract negotiations with health insurers. For contracts that start on July 1 for the new fiscal year, the state will save that amount because of bids made by private insurance companies. But two of the three bidders — Anthem Blue Cross and Blue Shield of North Haven and Health Net of the Northeast Inc. in Shelton — said in letters that if the bill becomes law they would need to recalculate their bids because the rules would be changing because far more people would be added to the rolls.

Eric J. George, an attorney and lobbyist for Hartford-based CBIA, said the system would operate outside the state's insurance laws, as well as place the state budget savings in jeopardy.

"This is really the first step to single-payer, and that is of great concern to us, as well," George said.

During the lengthy, detail-oriented debate, Republicans fired off numerous questions about the bill to Rep. Melissa Olson, an attorney who represents Norwich and serves as an assistant majority whip. She said the bill would provide property tax relief to cities and towns and rejected the idea that the bill would be a problem for unionized town employees.

"An arbitrator cannot order a municipality to participate in the state plan, and that is the voluntary nature of this plan," Olson said. "This amendment does not change collective bargaining or binding arbitration as it exists in statute."

"It has never passed because it's bad policy," said Michael Cicchetti, Rell's deputy budget director.

Hartford — Democrats in the House of Representatives argued for hours Wednesday for a plan to open up the state's employee health insurance pool to thousands of new entrants — including municipal employees and small business workers.

But critics of the proposal, which has the backing of House Majority Leader Chris Donovan, D-Meriden, and Secretary of the State Susan L. Bysiewicz, say it could eliminate millions of dollars in expected health care savings in next year's budget, and questioned the Democrats' claims that opening the state health care pool will really save its new participants money.

“The bottom line is this is an option, a voluntary option for folks to save money,” said Rep. Melissa Olson, D-Norwich, who introduced the bill on the House floor.

Roughly four hours later, Olson was still there, taking a string of questions from skeptical Republicans who challenged the sponsors' conclusions that it would save cities and towns money.

The so-called “pooling” proposal is intended to allow municipalities, nonprofit organizations and small businesses with 50 or fewer employees to take advantage of economies of scale in covering their employees' health insurance, advocates argued on the floor of the House Wednesday evening.

There are currently about 250,000 current and former state workers covered by state insurance, Olson said. She said supporters are not sure how many individuals might enter the state risk pool if the bill becomes law.

But the very hour of the evening suggested the difficulty they had experienced in moving the proposal forward.

While Donovan and others had expected the debate on the measure to begin when the House convened in the morning, it was held up by efforts to fine-tune it until past 5 p.m., while surrogates for Republican Gov. M. Jodi Rell and business lobbyists pushed back against the proposals in conversations with reporters and lawmakers.

Both the governor's budget and the legislative proposals assume savings of $54 million in the next fiscal year thanks to new bids accepted for the state employee insurance program, said the governor's deputy budget director, Michael J. Cicchetti. But those rates could be adjusted upward if the three insurance vendors see that the legislature has approved the pooling bill, which could add an unknown number of new individuals to the state's risk pools.

Cicchetti provided letters from executives at two of those vendors, Anthem and Health Net, stating that they would reserve the right to recalculate their rates if the legislation passed.

Democratic aides countered that the legislation would save municipalities on their health care costs, and said it was too soon to predict that rates would be revised upward, since it is too early to know exactly how numerous the new entrants to the state insurance pool may be.

The aides also noted that the third insurance vendor, United, had not written to suggest its rates would rise, suggesting that could be because the competing companies might be willing to absorb any municipal clients that are not desired by Anthem and Health Net.

HARTFORD - The House of Representatives last night passed a bill that would allow municipalities, small businesses and nonprofit groups to join the state's health insurance plan.

The 102-43 vote mostly fell along party lines and came after five hours of debate.

"It's basic - let's have good health care available to people at a lower price," House Majority Leader Christopher Donovan, D-Meriden, said in an interview during the debate.

The bill must now pass the Senate and be signed by Republican Gov. M. Jodi Rell to become law.

Donovan and Secretary of the State Susan Bysiewicz have been championing the proposal as a way to reduce health care costs.

They said adding enrollees to the state's crop of 200,000 insured public employees would lead to greater savings when the plan is put out to bid to major insurers.

State Rep. Christopher Perone, D-Norwalk, is also a major proponent of the bill.

That is no longer the case, helping persuade some Democrats and the Connecticut Conference of Municipalities to sign on this session.

The bill also was changed so that unions cannot make joining the plan part of binding arbitration, unless a city or town agrees in writing to put it on the table.

"It was very important to us it was optional," said state Rep. William Tong, D-Stamford.

Tong and other members of Stamford's Democratic delegation said city officials are satisfied with their current health insurance plan and did not want to be forced to give it up.

"But this could mean the world to small businesses in Stamford and the rest of Fairfield County," said state Rep. James Shapiro, D-Stamford.

In February and March, Donovan and Bysiewicz shopped the proposal to small-business owners in Stamford and Norwalk and generally received an enthusiastic response.

But the Connecticut Business & Industry Association is opposing the legislation, in part because it requires participants to make a three-year commitment with no guarantees that rates would not increase.

Budget Director Robert Genuario of Norwalk, in a letter to House leaders, said the state has already gone out to bid for health insurance and achieved significant cost savings next year.

Genuario said two of the state's insurers already have indicated they would have to reconsider their bids if the bill is passed, while a third would only honor its bid for one year.

"Furthermore, while this bill has been to touted as saving significant dollars for municipalities, our research indicates that is not the case," Genuario wrote.

But state Rep. Bruce Morris, D-Norwalk, said that by enacting the bill, the state would make the health insurance industry more competitive.

Morris said that if municipalities now have the option of signing up with the state's plan, their existing health care carriers will have to provide the best, most economical bids possible to retain them as clients.

Many lower Fairfield County Republicans, including House Minority Leader Lawrence Cafero of Norwalk, Antonietta "Toni" Boucher of Wilton, and Lile Gibbons of Greenwich, spoke against the bill.

"The state screws up everything," Gibbons said. "We can't handle education. We can't handle the Department of Transportation. Why should we possibly be able to handle health insurance?"

HARTFORD, Conn. - The House of Representatives approved a bill Wednesday night that would open up the state employee health insurance program to municipalities, small businesses and nonprofit agencies.

Proponents claim the voluntary proposal would lower medical costs for cities and towns and ultimately lead to lower local property taxes.

"We're talking about stimulating the economy, finding ways to help the small businesses in our state," said Rep. Melissa Olson, D-Norwich, who was peppered with questions from Republicans about the bill for hours during the debate.

After more than 4½ hours of debate, the bill passed 102-43 on a mostly party-line vote.

The legislation, championed by House Majority Leader Christopher Donovan of Meriden, various unions and a group that represents municipalities, is facing criticism from legislative Republicans and Gov. M. Jodi Rell's budget director.

Robert Genaurio, the secretary of the Office of Policy and Management, said the proposal will likely risk about $54 million in savings the state recently achieved by rebidding its state employee health care plan. Two insurance companies that offer policies to state workers said they'll immediately re-rate their bids if the bill passes because of the changed risk.

"These additional costs to the state are not budgeted anywhere and additional resources would have to be budgeted if the bill passes," Genuario wrote.

House Minority Leader Lawrence Cafero Jr., R-Norwalk, said he fears the legislation could potentially add millions of dollars to the state's insurance costs at a time when the state's revenues are slowing.

Olson said the insurance companies are not mandated to cover the additional people. But she believes it likely would be in their financial interest to do so. If they don't, Olson predicted that competitors would likely bid on the new enrollees.

Olson also pointed to $54 million in savings the state recently negotiated as an example of the bargaining power the state's employee health insurance pool can wield. About 200,000 to 250,000 are currently covered.

"Think if we add more numbers to that pool," she said. "We could see cost savings."

Donovan, who traveled the state to garner support for the bill from small busineses and municipalities, said people want the same plan that lawmakers receive.

"We know we have a good plan, we know it's saving money and we know we've done it by getting a lot of people together," he said. "Let's offer it to others."

If the bill passes in the House, it's uncertain whether there's enough support to pass it in the Senate, also controlled by Democrats. And given the concerns of Rell's budget director, there's uncertainty about whether Rell would sign the bill into law.

Earlier this month, State Comptroller Nancy Wyman launched a similar program that pools municipal employees into one large risk group. Her plan does not open up the state employee system.

Eric George, associate counsel for the Connecticut Business and Industry Association, said his group prefers Wyman's concept. He said CBIA is concerned that small businesses would be hurt under the bill debated in the House.

While the program would be voluntary, he said they'd be locked in for three years.

"There's no guarantee the rates are going to stay the same in years two and three," he said.

Matt O'Connor, communications director for CSEA/SEIU Local 2001, lauded the bill as a long-awaited solution to the healthcare problem.

"The bill is good for workers, it's good for the towns they work for and it's good for taxpayers," he said.

Hartford (AP) - Democratic leaders of the state House of Representatives say they’ll take up a bill that would open up the state employee health insurance plan to municipalities, small businesses and nonprofit agencies.

The bill is being pushed by House Majority Leader Christopher Donovan of Meriden and is an attempt to reduce costs for the groups and boost benefits for their employees.

But Gov. M. Jodi Rell’s budget director has concerns. The state recently rebid its state employee health care plan and was able to save about $54 million. But he says two of the three insurers that offer policies to state employees say they’ll immediately re-rate their bids if the bill passes.

Rell’s office also questions whether cities and towns will actually save money under the Democrats’ proposal.

TOWNS MAY GET HEALTH COST RELIEF
Two state plans would pool buying power to negotiate lower rates.

The need for affordable health care coverage and the need for the state’s cities and towns to balance their budgets have converged this year at the Capitol.

Nancy Wyman, the state comptroller, plans to start a health insurance plan for the state’s municipal workers and teachers. By taking advantage of a large number of people buying insurance together, Wyman estimates that a town with 1,000 employees could save $720,000 a year.

Her plan has picked up support from the Connecticut Council of Small Towns, the Connecticut Conference of Municipalities and labor unions.

At the same time, state Rep. Christopher G. Donovan, D-84, the House majority leader, is promoting legislation that would open the state’s health care plan, which covers more than 200,000 people, to municipalities, nonprofit organizations and businesses with fewer than 50 members.

Donovan says his plan offers a savings of $1,000 per employee thanks to the bargaining power the state wields because of the number of people covered. He cited a potential savings in Danbury’s health care insurance of $2.8 million if Danbury could buy health coverage through the state.

Wyman already operates a separate insurance pool for nonprofits and small businesses. Her office negotiated a zero percent increase in premiums for the state employees’ health coverage for the coming fiscal year.

Donovan’s plan has the advantage of having a large pool of people already covered. Wyman’s plan will soon begin enrollment and will need at least 20,000 town employees for it to be able to gain the size it needs to negotiate lower premiums.

The state plan costs more because the insurers bear the financial risk of claims, while Wyman’s plan is self-insured — the premiums directly pay claims. The state plan costs a bit more because it offers slightly richer benefits.

Donovan’s plan still needs legislative approval. Health coverage under Wyman’s is scheduled to begin July 1.

The state’s willingness in both its executive and legislative branches to offer inclusive and innovative solutions to the rising costs of health care promise some much needed relief soon for strained municipal budgets.

Do you have trouble recalling the last time your government served your interests? Do you find yourself turning from politics to more realistic avenues of self-betterment, like office pools or Powerball? Would you rather watch a school cafeteria food fight than sit through another political debate?

I may have good news. It comes from your state Capitol and concerns, of all things, health care. A bill will soon reach the floor of the House of Representatives allowing cities and towns, nonprofits, small businesses and the self-employed to join the state employee health care plan.

The cost to the state would be virtually nil; those who sign up would pay their own way. The program is purely voluntary; anyone who got in and was unhappy could get out, just as with any other health plan. The state could even save money, as a bigger pool would be an advantage in negotiations with insurers and other providers.

Why's this a big deal? The state, just by lending its expertise, market clout and efficiency of scale to smaller buyers, can deliver enormous savings. House Speaker Chris Donovan has been collecting municipal numbers: New Haven could save $8.6 million; Danbury $2.8 million; East Hartford $1.1 million; Windham $850,000.

Small businesses and the self-employed get hit even harder than cities and towns. A family of four may pay $15,000 a year for health care. A savings of just 10 percent would mean $1,500 every year for families in real need at no cost to taxpayers.

We talk about our current economic crisis as a downturn in the business cycle. We prescribe stimulus packages and bailouts, tax and interest rate cuts; medicine known to work well for minor economic fibrillations. The president's advisers promise that by year's end we'll return to the anemic, job-starved expansion we've enjoyed since he took over.

Middle-class families aren't holding their breath for that. Their deepening pessimism mystifies many pundits, politicians and economists. Maybe they're in touch with their own lives in ways economic statistics don't quite capture.

In Connecticut, median household income has risen 1 percent over inflation since 2000. The cost of health care is up nearly 50 percent. Gasoline prices are up 93 percent since 2001.

Health care is the killer. If you get yours courtesy of your employer, you may hold your place in the middle class despite higher costs for energy, education and other necessities. If not, your family effectively faces this choice: Drop out of the middle class or drop your coverage.

Choose the second route and you can remain in the middle class until a family member gets really sick, after which the only route back in may be through bankruptcy. What is to some a third option — keeping their coverage and their standard of living by drawing down savings, piling up credit card debt or engaging in risky refinancings — leads quickly to the same end.

It's often said that ours is a consumer-driven economy. Our automobile, home-building and financial sectors are already in deep trouble. Unless we provide families relief from high property taxes, high energy costs and most of all the high cost of health care, other sectors, and then the middle class itself, will follow them down.

Our problems are structural, not cyclical. So many badly broken systems need fixing. Money alone won't fix them, not even close, which is just as well because we haven't got any. We are all about to be fiscal conservatives because we are all about to be broke. From now on, relief must come not from new money but from new rules.

Let this be the first: Henceforth taxpayers may take advantage of any system they already pay for.

As state comptroller I proposed doing this 17 years ago. The issue has come up periodically since, only to be beaten back each time by lobbyists. But times change; insurers leave the health care racket behind; cities, unions and doctors change their minds. Small businesses speak up. The moment becomes ripe for leadership.

Too many political crusades end at the press conference. Chris Donovan deserves great credit for the tenacity and conviction he has shown in this fight.

He has a month left to speed his bill through the legislature's various chutes and ladders. If he can do it, this legislature will make history, which would make us all a little less cynical and a lot healthier.

Bill Curry, former counselor to President Bill Clinton, was the Democratic nominee for governor twice. His column appears Sundays on the Other Opinion page. He can be reached at billcurryct@gmail.com.

Curry on Healthcare
A LACK OF HEALTH INSURANCE COSTS LIVES IN CONNECTICUT EACH WEEK

Last year at this time, we talked with our political analyst Bill Curry about the possibility of universal health care in Connecticut. There was some hope amongst advocates that it would be a key issue in the legislature. That didn't happen - but the last year's national debate about health care costs and the effects of poor health coverage on people around the nation - have pushed the debate back into the forefront.

A new plan to extend state health benefits to a variety of residents is gaining traction in both houses of the state legislature - and a new study is out today, talking about the long-term impact on residents who don't have coverage.

We're going to talk about state health policy today with someone who's been writing a lot about it recently - our politcal anayst Bill Curry. He's a columnist for the Hartford Courant, the former state comptroller, and a two-time democratic nominee for governor.

For a complete gallery of pictures from today’s show, visit WNPR Images on Flickr.com.

HARTFORD — Christopher G. Donovan’s healthcare pooling bill was approved 39-14 by the Appropriations Committee Friday.

“The bill continues to move along,” said Donovan, D-Meriden, the House majority leader.

Donovan’s bill would foster a healthcare partnership between the state and municipalities, small businesses and nonprofit organizations. The plan calls for employees in those sectors to join the state’s insurance plan — the same plan enjoyed by state officials and lawmakers.

“I think the intent of the bill is to provide better coverage at a lower cost,” said Rep. Kevin Ryan, D-Oakdale, a member of the Appropriations Committee who explained the bill to his colleagues Friday.

The Appropriations Committee is the second legislative committee to pass the bill. The Labor and Public Employees Committee approved the bill 7-1 earlier this month.

The bill is also supported by many throughout the state, including the Connecticut Conference of Municipalities, the state’s Office of the Healthcare Advocate and several local elected officials and municipal employees.

Rep. Antonietta Boucher, RWilton, said she is concerned about incorporating small businesses into the plan.

“They live in a very volatile world,” she said, adding that lawmakers should recognize that instability.

Boucher continued, saying that she is not convinced that offering the state’s plan to small businesses would be a financial benefit to small businesses.

“Our plan is expensive,” she said. “It’s considered a goldplated program — platinum at times.”

Donovan’s legislation is a laudable effort, but maybe the General Assembly should focus on getting healthcare for all instead, Boucher said. Donovan has said that the partnership could be a step toward universal healthcare.

Sen. Dan Debicella, R-Shelton, said his issue with the bill is about cost. He also questions whether the state’s plan will be cheaper than the plans cities and towns currently have. If a partnership costs more for a municipality, Debicella envisions two outcomes. Either the municipality will choose not to participate, or it will and property taxes will increase, he said. Despite concerns by those like Boucher and Debicella, the healthcare pooling bill will move forward, and Donovan said he hopes those who oppose the bill see the need for such a partnership.

The bill’s next stop will most likely be the floor of the House and Senate, at which time it will be referred to other committees like the Public Health Committee, Donovan said.

HARTFORD - State Rep. Christel Truglia, D-Stamford, is not yet sure whether her city could benefit from a proposal allowing municipalities, small businesses and nonprofit groups to join the state's health insurance plan.

But she voted in favor of the bill yesterday when it came before the legislature's Appropriations Committee.

"There may be communities for which it will be helpful," Truglia said afterward.

Legislation creating the Connecticut Health Care Partnership made it out of the Appropriations Committee yesterday with a 39-14 vote and is now heading for the full General Assembly.

The concept has been championed by House Majority Leader Christopher Donovan, D-Meriden, and Secretary of the State Susan Bysiewicz as a way to reduce health care costs.

The state has more than 200,000 public employees, including lawmakers, enrolled in its health insurance plan.

Donovan and Bysiewicz have said that adding more enrollees from local governments, small businesses and nonprofit groups would lead to greater savings when the plan is put out to bid to major insurers.

The two have spent the past few months touring the state selling the plan to anyone willing to listen.

Stops included meetings with small business owners in Stamford in February and in Norwalk earlier this month.

State Sen. Bob Duff, D-Norwalk, an Appropriations Committee member, also backed the plan yesterday although he is unsure whether Norwalk or Darien, which he also represents, would.

"But it's voluntary. If they don't like it, they don't have to do it," Duff said.

Under the current bill, those who do join would commit for three years and then could decide to renew or back out.

"One of their biggest complaints is the cost of health insurance," he said. "If we can help them lower those costs, they have a better competitive advantage. . . . Let this be part of the marketplace. If it's good, the market will respond. Representative Donovan's done a great job reaching out on this issue."

Donovan is not on the Appropriations Committee, but he said in a phone interview that yesterday's vote bodes well for the bill's success in the full House and Senate.

Although Republicans generally have opposed the proposal, he noted he garnered a couple GOP votes.

He's also working to win over a cautious Republican governor, who has the power to veto the legislation.

"I'm talking to the governor's office," Donovan said. "I'd like it to be bipartisan."

The Appropriations Committee's three Republicans from lower Fairfield County - state Sen. Judith Freedman, R-Westport, state Rep. Antonietta "Toni" Boucher, R-Wilton, and state Rep. John Stripp, R-Weston - opposed the Health Care Partnership.

Freedman said municipalities on their own can form a pool to buy health insurance and find savings.

She said she does not believe small businesses would be able to afford the state's health plan, which is considered to have a generous benefits package that is locked in until 2017.

She and many of her GOP colleagues said they are concerned the legislation is the next step toward government-run universal health care.

"You start out as voluntary, but who knows where it's going to end up?" Freedman said.

CTNJ file photo
Rep. Chris Donovan - CTNJ file photo

On Friday evening the Appropriations Committee passed Majority Leader Chris Donovan’s bill which allows municipalities, nonprofits, and small businesses to join the state employees health insurance plan.

Proponents say the state employees health insurance plan creates a large pool of lives, which will increase bargaining power and lower costs for most cities and towns. Click here to read more about the plan and see how much it would save more than a handful of municipalities.

Renee Gere, owner of Presto Print II in Hamden, covers all health care costs for her four fulltime employees, at no cost to them.

Tina Ostrowski, co-owner of Go-Environmental in Milford, has a 50-50 split with five employees for insurance premium costs that will run about $43,800 this year.

Both entrepreneurs are weighing the potential to save money if the General Assembly passes a bill that would allow businesses with fewer than 50 workers to join the state employee insurance pool.

House Bill 5536, An Act Establishing the Connecticut Healthcare Partnership, would also allow municipalities and nonprofit organizations to join the pool. The legislature’s Labor and Public Employees Committee voted 7-1 in favor of the bill earlier this month, and the proposal is headed to the floor of the House for consideration.

House Majority Leader Christopher G. Donovan, D-Meriden, the bill’s author, and Secretary of the State Susan Bysiewicz, Connecticut’s registrar for businesses, jointly conducted roundtables in New Haven and around the state, pitching the plan’s benefits.

Donovan estimates municipal savings, for example, could be as much as $1.9 million for Meriden, $896,758 for New Britain and $8.6 million for New Haven, while offering coveted benefits.

“Our proposal is to allow small companies to have access to state rates,” Bysiewicz said, adding that participants would secure more affordable rates by combining their buying power.

More than 200,000 state employees are in the pool, Bysiewicz said. Under the state plan, individuals who now pay $12,000 per year under some plans would see their costs drop to $5,000, she said, and people paying $25,000 a year for a family package could lower their premium to $13,000.

“I think it’s an awesome opportunity to be able to take advantage of the state’s buying power,” Ostrowski said. Go-Environmental conducts environmental site evaluations and assists clients with remediation plans, brownfield cleanups and hazardous waste management.

Gere said she wants to hear more about how the state’s pool works. Her company provides printing services and promotional products distribution. “I would love to bring down those rates,” she said.

But Eric George, associate counsel for the Connecticut Business & Industry Association, which helps procure health insurance plans for its members, said the association opposes the bill because the pool would be exempt from state health care laws and enrollment is mandatory for three-year increments.

Workers might not have protections against practices that in the past raised premiums or denied renewals for the most infirm enrollees. “Our primary concern is that it’s unregulated,” George said.

BILL PROPOSES EXPANSION OF STATE HEALTH COVERAGE
One small business calculated that they would see healthcare savings of 50%

State officials held a roundtable Monday on proposed legislation that could cut the health care costs for thousands of Connecticut residents.

For small business owners in Connecticut getting health care for its employees oftentimes carries a hefty price tag.

So House Majority leader Chris Donovan introduced a bill that will give the option to towns, non-profits and small business to buy into the state’s health plan.

Secretary of the State Susan Bysiewicz supports the bill. She says small business can enter the huge pool of 200,000 employees that the state already insures.

“This plan actually uses the bargaining power of the State of Connecticut and economies of scale to provide affordable coverage to small businesses.”

Bysiewics says while one company will have only a dozen employees, small businesses created 96 percent of the new jobs in the State over the last ten years.

Bysiewicz and Donovan held roundtables in five different cities around the state. Small business owners who attended the meetings were enthusiastic about the plan, asking questions about qualifications, cost and choice.

At one roundtable in Stamford, partners in a public relations firm calculated that they would see savings of fifty percent with the proposed plan.

The bill passed the labor committee last week. It awaits passage from at least another committee before it goes for vote on the house floor.

LOOKING TO LIGHT A FIRE
Top state pols got what they wanted in New Haven --
small-business enthusiasm for a health insurance bill.

The two pols, Secretary of State Susan Bysiewicz and state House Majority Leader Chris Donovan, have been barnstorming the state on behalf of a proposal to allow small businesses, not-for-profits and local governments to join the state employees' health insurance plan.

They sold small-business bosses like Tina Feola Ostrowski on the bill during a road show stop at New Haven's Gateway Community College Monday. Eighteen representatives of small employers showed up at the gathering.

Now Bysiewicz and Donovan (pictured) want people like Ostrowski to convert that enthusiasm into emails to legislators and the governor in order to pass the proposal, House Bill 5536, over the coming month. The bill passed the Labor Committee and is headed to the House floor. Fifty-four state representatives have cosponsored the bill; it needs 76 votes to pass.

"I am already making a list of all the legislators I want to contact," Ostrowski said toward the end of the one-hour sessions.

Ostrowski considers health care costs the biggest burden on the seven-member company she runs, Go-Environmental of Milford. She said she pays more than $40,000 for health insurance for her employees -- and pretty lousy health insurance at that, with high deductibles, high co-pays, and no dental coverage. Her most recent hire was a woman whose family coverage is costing $15,000 a year.

"It's hard to attract the high-quality employees you need" when you can't offer benefits competitive to those offered by larger companies, she said.

If Donovan's bill passes, businesses like Ostrowski's across the state -- those with under 50 employees -- could become part of the state employees' health plan. So could all not-for-profits and local governments. The plan's highlighhts include:

"I could automatically lower my deductibles and offer better care" with this plan, Ostrowski said.

Cities stand to be among the biggest winners if the plan passes, according to Donovan. Meriden would save $2 million a year on employee health insurance if it signs up; Danbury, $3 million; New Haven (which is putting its health plan out to bid), $5-$8 million.

The savings come because larger pools of people or companies or governments can command better deals from insurers -- who in turn can offer lower rates because they can spread the risks among greater numbers of people. The state employee plan already has 200,000 people in it.

The Donovan plan is not a universal health care solution. Universal health care appears to be off the agenda this legislative session. Instead, competing plans are looking to help at least some of the state's uninsured or underinsured families get better and/or cheaper coverage.

This plan differs from Gov. M. Jodi Rell's offering, the Charter Oak Plan, in philosophy. Rell's plan (which is aimed at lower-income people not qualifying for the state's HUSKY program) is envisioned to cost less ($250 a month for adults), but also offers less coverage and charges higher deductibles. Donovan argued that it makes sense -- and saves more money in the long run, through preventive care -- to avoid trying to expand health care on the cheap.

If it helps everyone to have larger pools of people under one umbrella, why not just go to single-payer health care, in which the entire state could belong to one plan?

Bysiewicz said such a plan would involve "mandates" -- forcing people to belong whether or not they want to. She said Connecticut doesn't want that.

Donovan said the will doesn't exist to pass such a sweeping plan this year. Too many people are convinced that reform plans take something away from them. They need to see how a more modest plan like this can work, he said.

"People are confused about health care. This proposal is to get people to realize that they can have a good health care plan that actually saves money. People don't believe. People believe if you ahve universal health care right now, it will be a bad plan," Donovan said.

The bill faces opposition, notably from the Connecticut Business and Industry Association, the Capitol's most influential corporate lobby.

Donovan said he's "disappointed in the leadership of the CBIA" because the group's grassroots business-owning members are "jumping up and down" for this plan. CBIA is opposing the bill in order to fight off potential competition for its own insurance plan, Donovan claimed.

"That's not true", responded CBIA Associate General Counsel Eric George, contacted later in the day.

If "everybody's playing on the same playing field," George said, "if we can't compete againstthe state, we shouldn't be in business."

George said CBIA opposes the bill because it would put the new program "outside of our health insurance laws" and therefore outside "good safeguards" for "the small guys"; and because it requires a three-year commitment to join.

Donovan told the Long Wharf gathering that one of the advantages of his proposed plan is that employers wouldn't need to worry about suddenly skyrocketing rates that force them to look for new plans. This year, he said, the state employee plans' premiums rose 0 percent (i.e., not at all).

State Rep. Chris Perone, D-137, and Secretary of the State Susan Bysiewicz listen to House Majority Leader Chris Donovan, D-84, talk about health care initiatives to local business owners during a forum Thursday at City Hall. Hour photo/Erik Trautmann

Two Democratic leaders came to Norwalk Thursday to drum up support for a health care bill making the rounds through the state legislature.

An Act Establishing the Connecticut Healthcare Partnership would allow businesses, municipalities and nonprofit organizations to buy into the state's health care plan.

Secretary of the State Susan Bysiewicz and state Rep. Christopher Donovan, D-84, House majority leader, were joined at Norwalk City Hall by state Rep. Christopher Perone, D-137, to tell local business owners and insurance agents about the plan.

"One of the things I hear about constantly is that businesses are struggling to offer health insurance for themselves and their employees," Bysiewicz said, adding that one in 10 Connecticut residents is either underinsured or has no coverage.

Supporters of the bill believe towns, nonprofits and businesses can save money compared to their existing health care plans by entering into a coverage pool with the state. Donovan said he ran the numbers on his hometown of Meriden and found the city would save $2 million annually.

For individuals, the plan would cost between $5,000 and $6,500 annually. Coverage for families would cost $13,000 and $17,000 annually.

While business owners lauded the state's efforts, those who set businesses and people up with health insurance had some concerns.

Bob Twombly, a group sales manager for ConnectiCare, said he didn't want the plan to migrate toward Massachusetts' health care reforms, where coverage is required for nearly every resident.

"It's not Massachusetts," Donovan said. "It's what we're offering right now. It's a concrete thing."

Jim Murphy, chief executive officer of Benefit Planning Services, which connects businesses to insurance firms, said he would love to refer clients to the state plan. His main worry is the bill's use of a "modified community rating," which charges higher premiums to older groups.

Donovan said the program is not mandatory. "If the option doesn't work, don't join it," he said.

Further, Donovan said the program uses census data to calculate premiums, not the past claims and medical needs of its enrollees. Experience-based systems can hurt small businesses, he said, because if one employee gets sick, everyone's rate goes up the following year.

While some insurance agents faulted the census-based system as being unrealistic, Donovan brushed off their criticisms.

"When you look at the businesses that buy insurance, they were thrilled," he said. "When you look at businesses that sell insurance, they were nervous, because in a sense we're competition."

The act was voted out of the legislature's Labor and Public Employees Committee Thursday and will likely face other committee votes before reaching the floor.

Staff writer Jared Newman may be reached at (203) 354-1045 or jnewman@thehour.com.

But after hearing details of a bill that would allow small businesses like his to join the state's health insurance plan, Mertz said yesterday lawmakers finally got something right.

"I love this opportunity to shop, and I love alternatives," said Mertz, managing partner of Proforma Branding Solutions in Norwalk. "I applaud you people. Please keep it up."

Mertz was praising Secretary of the State Susan Bysiewicz and House Majority Leader Christopher Donovan, D-Meriden, who yesterday hosted a roundtable discussion on their proposal to allow small businesses, municipalities and nonprofit groups to get health insurance through the state's plan - essentially pooling their buying power with the state's.

About a dozen small-business owners and members of the health insurance industry attended the City Hall event, along with state Rep. Christopher Perone, D-Norwalk.

Since last fall, Donovan and Bysiewicz have toured the state, pitching the proposal. They spoke to small-business owners in Stamford last month.

A similar bill failed in the 2007 legislative session, in part over concerns it would require cities and towns to join. That is no longer the case, but those who participate must do so for three years.

In a 7-1 vote yesterday along party lines, the legislature's Labor Committee moved the bill on to the Appropriations Committee.

Republicans oppose the plan and have said the legislation is the next step toward government-run universal health care.

The state has more than 200,000 public employees, including lawmakers, enrolled in its health insurance plan. Adding more members from local governments, small businesses and nonprofit groups would lead to greater savings when the plan is put out to bid to major insurers, Donovan said.

Some cities and towns have resisted the plan in part because of its generous benefits that are locked in until 2017, under an agreement adopted under former Gov. John Rowland. Benefits include, for example, co-pays of $3 for generic drugs and $6 for brand names. Local officials say such a plan could become too costly.

In an interview last fall, Norwalk Personnel Director James Haselkamp said the city, along with Stamford and about a dozen other municipalities and school boards, already realize savings through membership in the Connecticut Public Sector Healthcare Purchasing Coalition.

Haselkamp said the difference with Donovan's pool is coalition members bid together but are allowed to maintain their own contracts with insurance companies with distinct benefits. Donovan and Bysiewicz yesterday emphasized the state's health care plan might not be for everyone, but that is no reason to reject the pooling concept.

Saul Haffner, who runs a Westport-based search engine for justices of the peace, said he was pleased to learn that a small business that joined the proposed state program could offer it as supplemental insurance to retirees on Medicare.

But some of the insurers doubted the plan would be successful. They said it could become too costly, particularly if those groups that join are made up of older, less healthy employees. Those concerns are shared by the state budget office.

Costs might go down "if everyone coming in was healthy," Jeffrey Beckham, a state budget office spokesman, said in an phone interview yesterday. "We just don't know the (health) profile of who's coming in or what their experience is. And that's how these things get rated by the insurance industry. . . . Costs may go up more."

James Ingle, a health insurance agent from Cromwell, said during yesterday's roundtable the state's generous benefits may encourage people to over-use medical services.

"This bill isn't going to get the consumer to think how they're utilizing their health care," Ingle said.

Connecticut would not be breaking new ground by embracing pooling. According to the General Assembly Office of Legislative Research, about two dozen other states share their employee health care plans with all municipal employees or school employees.

But even some of Donovan's allies acknowledge the benefits are not a sure thing.

"They're trying something new and creative, and he's going to hope to God it will bring in the savings," House Speaker James Amann, D-Milford, said in an interview yesterday. "He's putting himself in front of the state with a very gutsy proposal."

Amann said he will support the bill if the majority of his Democratic caucus is on board.

Derek Slapp, a spokesman for Senate President Pro Tempore Donald Williams, D-Brooklyn, said Donovan's proposal "has a ton of merit."

Slapp also noted the General Assembly last year created the HealthFirst Connecticut Authority to consider how to provide primary care and prescription drugs to all residents, including through pooling.

"Don thinks the work Majority Leader Donovan is doing is really valuable," Slapp said. "If the details can get worked out, he's open to it, sooner rather than later."

By Amanda Falcone

HARTFORD — Christopher G. Donovan ’s health-care partnership proposal received high praise Friday during a Labor and Public Employees Committee public hearing on the bill.

The House majority leader, a Democrat from Meriden, has promoted the idea of a healthcare partnership between the state and municipalities, small businesses and nonprofit organizations. The plan calls for employees working in those sectors to join the state’s insurance plan.

The idea is that employers would have more bargaining power and the cost of health insurance would be lower if there were more people under the state’s plan.

The bill being considered by lawmakers would not require groups to join the state’s plan; participation would be encouraged but voluntary.

“This is just another option that saves towns money,” Donovan said in his testimony Friday.

Donovan said health-care pooling advocates have done their homework. A Connecticut Healthcare Partnership Working Group, made up of legislators and stakeholders, was created to review the bill and make suggestions. Donovan has traveled throughout the state sharing the details of his plan with cities and towns. “In every instance we found savings,” he said.

For example, Meriden is expected to save nearly $2 million under Donovan ’s proposal, and a local union president and the director of a city nonprofit said they are pleased.

“It seems to me that Meriden needs a bold idea like healthcare pooling,” said Diana Naimo, president of Local 595 of the American Federation of State, County and Municipal Employees, the union that represents more than 100 Meriden public employees.

David Radcliffe, director of Meriden Children First, also submitted testimony Friday.

“This bill is a win-win for all concerned about the rising costs of providing quality, affordable health-care coverage,” he said. “While this bill is not universal health care, it will provide expanded access to quality care, preserve consumer choice, contain costs without eroding quality of care or benefits and encourage competition.”

Meriden is not the only municipality that is predicting savings under a pooling plan; Windham anticipates saving about $850,000.

“If I had that money, I could buy a senior center,” Windham First Selectwoman Jean de Smet said.

People are excited about the possibility of a health-care partnership, Donovan said, and are asking him why the state has not opened up the plan sooner.

While enthusiasm was building Friday, Robert L. Genuario, secretary of the Office of Policy and Management, urged caution, suggesting that the bill, as written, would likely drive up costs for the groups it looks to help. He also said he believes the bill would change collective- bargaining law, making the partnership mandatory for one of the two parties involved.

Donovan disagreed with both of Genuario’s comments, showing statistics to support his point.

Genuario also questioned why cities and towns were not flocking to a pooling option that exists. That option allows municipalities to join together for health insurance negotiations, but they do not get the same coverage enjoyed by the state.

Genuario attempted to answer his own question. Pooling plans are more expensive than the plans the municipalities currently have, he said.

While most Labor and Public Employees Committee members expressed support for the health-care pooling bill Friday, Sen. Anthony Guglielmo, RStafford Springs, said he was worried that Connecticut was tackling a complex issue too soon.

“I really get concerned when a small state like Connecticut jumps out in front of something experimental,” Guglielmo said, adding that he was not against the bill but would want input from experts, including actuaries, if it were to move forward in the legislative process. “Sometimes, you’d rather be an aggressive follower.”

Twenty-four states, including Massachusetts and New York, have local government employees insured under a state plan, Donovan told him.

“It’s not a new idea, but it’s an idea that can save municipalities real dollars,” he said.

HARTFORD - John Hopper, founder of a Stamford marketing firm, had never heard about a proposal to open up the state's health insurance to small businesses like his.

But Hopper was sold on the proposal to enable employers to participate in the state employees' health insurance plan last month during a meeting with the plan's architect, House Majority Leader Christopher Donovan, D-Meriden, in Stamford.

"It's a no-brainer," said Hopper, who plans to sign up himself and his three full-time staffers should the General Assembly pass the legislation this year. "We could be saving quite a bit of money and hopefully employ two or three more people."

Donovan, during the 2007 session, pushed for pooling the state's health care resources with small businesses, nonprofit groups and municipalities. But he failed to sway enough lawmakers.

He continues to do so even as a revised health insurance pooling bill is debated by the General Assembly. Donovan spoke on Feb. 26 in Stamford and, along with Secretary of the State Susan Byciewicz, will tout the pooling plan at 11:30 a.m. Thursday at Norwalk City Hall.

At a public hearing yesterday in front of the legislature's Labor Committee, Donovan said the major difference between last year's proposal and this year's iteration is participation is no longer mandatory; last year's proposal would have required all municipalities in the state to join."This is a voluntary plan," Donovan said. "I repeat, a voluntary plan."

The bill had received significant opposition last year from municipalities, including Stamford, Norwalk, Greenwich and Weston, where officials argued they already are achieving savings in their own insurance plans.

They were unsure that partnering with the state on its generous health care package would cut costs further.

"Everywhere I've been, the towns have said, 'This gives us real money,' " he testified.

Terry Edelstein, president of Connecticut's Community Providers Association, which represents many nonprofit groups in southwestern Connecticut, told the Labor Committee the insurance pooling would help her members.

The association has been pushing lawmakers to provide members a $200 million "rescue fund" this session to help provide cost-of-living wage increases to staff and cover rising energy costs and other bills.

Edelstein said the pooling plan would alleviate some of those financial pressures.

But state budget director Robert Genuario, of Norwalk, urged caution. He told lawmakers there still was not enough data for a useful comparison between current health care costs and those under the pool.

The Connecticut Conference of Municipalities, the Connecticut Association of Boards of Education and the Connecticut Business and Industry Association all argued the bill is not truly voluntary.

They say, as now written, the bill would allow unions to force municipalities or businesses to participate in the state health insurance plan through binding arbitration.

George also was concerned that the plan is being sold at three-year intervals. He said that could hurt small businesses that now can shop for insurance annually.

When Donovan visited Stamford last month, Elsa Peterson, a freelance editor based in Norwalk, attended.

Peterson said yesterday she is constantly frustrated by her health insurance costs and is optimistic the pooling plan would pass this session.

"Paying for my own medical insurance has always been just a huge burden and headache," Peterson said. "Premiums keep going up. Networks change. I find a doctor I'm satisfied with, and suddenly they're not in the network, or I can't afford the plan or I'm not eligible for the plan anymore."

Peterson said she believes public opinion is on the side of health insurance reforms like Donovan's.

"The general public is much more ready for this kind of thing now," she said. "You can't run for president without talking about it."

Chris Donovan. Photo by Christine Stuart

There was only one item on the legislature’s Labor and Public Employees Committee public hearing agenda Friday: Majority Leader Chris Donovan’s “Connecticut Healthcare Partnership” bill.

The first person to speak about the bill wasn’t Donovan, it was Gov. M. Jodi Rell’s Budget Secretary Robert Genuario, who said it’s not clear who bears the cost of administration and coverage if the state employees health insurance pool is opened to municipal employees, nonprofits, and small businesses.

Donovan said what you need to know about this plan is “you can get good health care that costs less.” He said it’s really that simple.

Donovan said all the rural, suburban and urban municipalities he’s spoken to would save money by joining this plan. An Office of Legislative Research report found a small number of towns that are self-insured may not save money by joining the state employees pool.

Genuario seemed to take the Connecticut Business and Industry Association’s position on the bill and said the way its written makes it look like it’s not voluntary. He said if that’s the case then it may drive up costs for municipalities that currently have cheaper health insurance plans and ultimately drive up taxes in those towns.
Donovan said his intention is to make it a voluntary program. He said the state employee health insurance plan is a great plan and expanding it will spread out the risk. For people who want good health insurance the question is, “Why haven’t we done it sooner?” Donovan said.

Juan Figueroa, President of the Universal Health Care Foundation said in an emailed statement that he supports the plan. “Allowing municipalities to voluntarily enter the state’s health insurance plan has the potential to reduce health care costs to municipalities and increase benefits for their employees. In addition to the potential cost savings to cities and towns, the plan would demonstrate the capacity of public-private partnerships to address some of our state’s knottiest health care and economic problems,” he said.

Opponents to the plan like CBIA have said, “advocates admit that a pooling system is merely a stepping stone for a future single-payer health care system. The impact of a single-payer system in Connecticut would be devastating to the state’s health insurance industry, placing tens of thousands of jobs at risk and striking a damaging blow to the economy.”

Bev Brakeman, executive director of Citizens for Economic Opportunity, said the opposition to the bill is coming from the businesses and associations that would lose money if this bill were passed. She said opponents are concerned because their sales and administration of health insurance would be diminished.

DUELING HEALTH PLANS
Bysiewicz, Donovan hit the road to sell a plan that would allow
small biz and non-profits to join existing state employee program

House Majority Leader Christopher G. Donovan (D-84) of Meriden and Secretary of the State Susan Bysiewicz are meeting with business owners and others around the state to drum up support for a health plan that would extend the state employee insurance program to small companies and non-profits as well as municipal employees.

Donovan has been pitching the "Connecticut Health Care Partnership" plan to municipal leaders and business groups in more than ten towns and cities since he introduced it last November, and doing so in tandem with Bysiewicz since last month. They've held "business roundtables" in Ledyard and Stamford, and should make at least one stop in New Haven County (at press time an appearance was being arranged for East Haven) before the end of March.

Donovan's plan, which has approximately a dozen options and includes co-pays of $3 for generic drugs, $10 to $15 for doctor office visits and no-fee emergency room visits, is the latest variation on a proposal that has yet to become law.

Last year state Comptroller Nancy Wyman failed to gain traction on a similar plan that would have added municipalities to the state employee health insurance program.

"There are 250,000 lives in the state health-care plan, and we can use that added volume [of more enrollees] to bargain for health care that's affordable," says Donovan, who plans to introduce the bill in the labor committee early this month.

"What's different this year is the idea that small businesses could be a part of this," Bysiewicz says, adding it was she who made the suggestion to Donovan.

"Our clients are businesses, and most are businesses with fewer than 50 employees," she says. "One of their biggest challenges is how to afford health care.

"What's very attractive [about the Connecticut Health Care Partnership plan] is it would give them the opportunity to purchase at the state rate...which is much cheaper and cost-effective" than existing alternatives.

Initially, Bysiewicz says, the idea was to add small businesses to the plan as a pilot program.

But if the "enthusiastic" response she and Donovan have gotten from business owners so far turns out to be the norm "in all parts of the state," she says, "we may go forward with a proposal that's more broad-based than a pilot."

The response hasn't been 100-percent enthusiastic. Opponents of the Connecticut Healthcare Partnership Plan include Stephen Glick, administrator of Chamber Insurance Trust in Orange, which manages benefit programs to members of chambers of commerce.

"It's something that everyone wants but they're not getting into the details," Glick says. "I doubt there's any thought to the utilization of this program, which I understand is very, very high. A state employee is more likely to use the plan unnecessarily because there's no reason not to."

Glick believes that in order to succeed, the plan would need to be modified with cost-control strategies.

"It's not just the front end of access the employer might pay for," he says. "The back end is we'll all pay for it in taxes."

Donovan and Bysiewicz are hoping the Connecticut Health Care Partnership plan will emerge as law at the end of the General Assembly's spring session.

To cover his family of five, John Hopper pays about $24,000 a year for health coverage, including a $40 co-pay for many prescription drugs.

So the idea of small-business owners paying significantly less for health insurance by pooling with the coverage plan currently offered to state employees is a slam dunk for Hopper.

"This sound almost too good to be true," said Hopper, managing partner of Power Marketing Partners, a Stamford-based marketing consulting firm that employs three people. "I'm not sure why any (small business) wouldn't do this."

Secretary of the State Susan Bysiewicz and House Majority Leader Christopher Donovan, D-Meriden, want small-business owners like Hopper to know this kind of affordable yet effective coverage is a reality for them.

During a round-table discussion at the University of Connecticut Stamford campus yesterday, Bysiewicz and Donovan told about 20 business professionals that the General Assembly is working on a bill that would allow small-business owners and municipal employees to enroll in the health coverage plans that are used by nearly 250,000 state employees.

The plan, which has coverage by Anthem Blue Cross, Health Net and Oxford Health would offer co-pays of $10 to $15 for doctor visits, co-pays of $3 for generic drugs and $6 for a 100-day supply of maintenance drugs. Premiums for individuals range between $5,000 and $6,000 a year and $13,000 to $17,000 for family coverage.

"What we hear most from our small-business constituents is how difficult it is for them to find affordable health care coverage that actually covers you," Bysiewicz said. Some companies "spend the first couple of years in business without insurance."

Donovan originally proposed the bill to allow just municipal employees to join the pool but at Bysiewicz's urging has expanded it to small businesses. As someone who uses the plan, he said he stands by the state's health coverage.

"It's a good plan," Donovan said. "I didn't know much about my health coverage until I hit 50, but now I'm a regular customer."

Businesses would be offered the option to join the state coverage pool, and it won't be mandatory, he added.

"We'll see on a competitive basis if it makes sense and if people choose it," Donovan said.

There were some concerns about the proposal.

Representing the Business Council of Fairfield County, Tanya Court, the group's director of public policy and programs, asked how affordable the coverage would be for taxpayers.

"We do wonder if your plan is sustainable in terms of its cost in the future," Court said. "We're not saying its a bad plan. It's a great plan for individuals and great for the employer. It's just what's this going to cost the taxpayer?"

Bysiewicz and Donovan said as more people become covered by the plan, costs could go down because the risk would be spread within a larger pool.

Both said they have not noticed huge fluctuations in plan costs since they've been covered.

Elsa Peterson, of Norwalk-based Elsa Peterson Ltd., which provides editorial services for college textbook publishers, said the plan could lower costs for taxpayers by allowing employees to get coverage at the right time for illnesses, rather than putting off a doctor's visit because of high costs.

Someone avoiding a visit to the doctor "ends up in the emergency room, and then they can't pay their bill," Peterson said. "And who ends up paying for that?"

Myron Seligman, who runs Pet Nutrionals Science LP in Fairfield with his wife and company president, Rosemary Szepesi, said this kind of health coverage could allow their company to expand.

"We're getting ready to take our business to the next level," Seligman said, but he added that they would have trouble affording health coverage for an illness or injury.

KEN DIXON Kdixon@ctpost.com

Universal health care is one of those things that we'd all like to live long enough to see. But it's elusively similar to the way the 17th- and 18th-century poet/engraver/dreamer William Blake, best known for "Songs of Innocence," described the artistic muse: she was always just out of arm's reach.

In Connecticut, part of the problem that keeps better health coverage away from hundreds of thousands of people, I believe, is that lawmakers and state employees have it so good, thanks to a little-known legacy of John "Why Should I Resign If I've Done Nothing Wrong?" Rowland.

It was about 10 years ago, around the time the crooked former governor was accepting a state contractor's renovations to his summer place on Bantam Lake and the state was finally crawling out of the rubble of the last national recession.

Rowland, in exchange for union peace that lasted until the 2003 state-budget deficit when he ordered layoffs and early retirements, agreed to a very long, very lucrative health care package for unionized employees — and therefore all state employees — that will take them well into the next decade.

These health-insurance amenities are so good that your average state worker — and there are 52,000 of them — can in no way relate to the obstacles that Athena Kurtzenacher, a Shelton school-bus driver, faces.

The 38-year-old Kurtzenacher works for First Student, driving yellow-bus loads of kids each day to Shelton High, Mohegan, Elizabeth Shelton and Sunnyside elementary schools for hourly pay under a municipal-union contract.

She is entrusted with the lives of Shelton kids, yet she and other drivers face a budgetary dilemma.

"For us as far as cost-wise, especially myself personally as a soon-to-be-divorced single mom, it needs to be cost-effective," Kurtzennacher, vice president of Chapter I95, CSEA/SEIU Local 2001, said.

"Things are really expensive," said the mother of a 15-year-old. "Do I pay my bills or do I want health insurance?"

It's still too early in the short legislative session that runs until midnight May 7 to determine whether House Majority Leader Chris Donovan's plan to offer health care coverage to municipalities, unions, nonprofits and small businesses will fly away like Blake's muse.

But Donovan, D-Meriden, has been laying the foundation for more than a year, visiting people throughout the state and listening even to the woman who cuts his hair, who're tired of soaring health care costs and diminishing coverage.

Donovan even recently put his hair cutter on a panel of wide-ranging expertise, with the challenge of coming up with practical ideas.

Part of the solution is the potential for doubling the state's benefit pool, which currently covers about a quarter million active and retired state employees and their families.

He figures his hometown of Meriden could save $2 million a year if its municipal employees, on a voluntary basis, pooled benefits with state employees.

One of the reasons I think this might work springs from something Bob Genuario, who as secretary of the state Office of Policy and Management is Gov. Jodi Rell's budget chief, said the morning three weeks back that the governor presented her budget adjustments to the General Assembly.

Almost as a throwaway line to reporters, Genuario — whose predecessor, Marc Ryan, approved the landmark benefits for state employees under Rowland — mentioned that the state recently saved $55 million during bidding for health-insurance contracts.

In a two-year, $36-billion budget, $55 million is pretty decent money.

William Blake did a fantastic engraving of his idea of the gates of Hell, which reminds me here that many devils will lurk in the details of Donovan's dream.

"It's a good plan and we hope it costs less," he recently said of the legislation, which is before the Labor Committee and would have a long, perilous way to go to succeed this session.

About two dozen states have opened their state insurance pool to municipal employees, reducing premiums and eliminating administrative and carrier charges.

Donovan's plan is innovative in that small businesses and nonprofits would also be encouraged to join. First off, participating towns and cities would have to fully commit.

"We don't want to be a risk washer," Donovan said. "They can't just shift the risk of say, their fire and police departments, into the pool."

Local teachers' units would also have to join the more-risky professions, if the pool is to get deep enough.

Then there are those municipal unions that have even better plans than the state has. Existing municipal contracts would have to be renegotiated — unlikely — or attracted into the pool as the local pacts expire over the next few years.

But if a city of 60,000 such as Meriden could save $2 million, maybe Bridgeport could save $5 million; maybe Ansonia, with 19,000 people, could save $700,000; maybe Shelton, with a population 40,000, could save $1.5 million.

That could be the kind of local property-tax relief — hundreds of millions of dollars throughout the state — that's been as elusive as Blake's muse for far too long.

Ken Dixon's Capitol View appears Sundays in the Connecticut Post. You may reach him in the Capitol at (860) 549-4670 or via e-mail at kdixon@ctpost.com. His daily web log, Connecticut Blog-o-rama, can be seen at forum.connpost.com/politics.

Last month, we supported a proposal by state House Majority Leader Christopher Donovan to include municipal employees and teachers under the state’s health insurance program.

In doing so, we acknowledged the proposal might not be the best way to go for every city and town, but could offer many communities significant cost savings. Donovan and others are now expanding that plan, suggesting a pilot program also be launched that would allow small businesses with fewer than 50 employees and nonprofit organizations to be included.

As we noted in our early support, the plan may not be the best for everyone. But it is a proposal that is clearly worth examining, especially for nonprofit organizations that provide a critical service to communities without much support from the state.

Donovan and Secretary of the State Susan Bysiewicz presented the idea last week at a meeting hosted by the Eastern Connecticut Chamber of Commerce and attended by about 70 small business and nonprofit representatives, the first of a series of statewide programs they plan to conduct.

Many could be covered.

Last week, State Rep. Melissa Olson, D-Norwich, was named chairman of the Connecticut Healthcare Partnership Working Group. That group will be charged with drafting the legislation during this session to implement the plan. But the committee will have less than two months to complete that task if it hopes to introduce legislation this year.

The premise of Donovan’s plan is increasing the number of people covered by the insurance will lower its cost. There are roughly 250,000 state employees covered under the state plan. If municipal and school employees were included, that number swells to 500,000. Adding in small businesses and nonprofits potentially increases the pool to nearly 1 million.

Health care costs are the No. 1 problem for business — and nonprofits, of which there are many here in Eastern Connecticut — and municipalities. A recent survey of businesses in northeastern Connecticut showed health care costs are the No. 1 concern among business leaders who fear a stable-to-worsening state economy in the coming year.

Providing a vehicle that could lower health care costs is good for the economy and taxpayers.

It’s a good idea, but again, not necessarily the right answer for everyone. Business and community leaders will have to look closely at how they gain versus what they may lose, and whether the potential savings is worth any sacrifices in existing coverage that might be needed. It would be a voluntary program, but one that will require a three-year commitment for those who join.

Hartford - Thousands of municipal, nonprofit and small-business employees could soon pool with state employees in an effort to reduce health insurance costs.

The legislature Friday formally introduced the Connecticut Health Care Partnership working group, made up of representatives of the state, municipalities, business and labor unions.

House Majority Leader Christopher Donovan, D-Meriden, said the existing draft proposal would allow municipalities, nonprofits and specifically defined small businesses to voluntarily enroll their employees in the existing medical plan.

“We’re basing this on things we’ve heard all around the state,” Donovan said. “It could potentially save $1,000 to $2,000 per employee. It could save Meriden $2 million, Danbury $3 million, smaller towns hundreds of thousands.”

State Rep. Melissa Olson, D-Norwich, will serve as co-chairman of the group. She said projected savings will help strapped local governments — and by extension their taxpayers — save money on their annual tax bills.

“We really need health care reform and property-tax reform,” Olson said. “If we find a way to do this, it can pass savings on to municipalities.”

Olson still is waiting for numbers for projected savings for towns in Eastern Connecticut.

Donovan said the state would be careful to avoid any municipality that tries to shift only its high-risk workers, such as police and firefighters.

Sal Luciano of the American Federation of State, County and Municipal Employees is on the panel. He said there might be an issue of unions whose existing contracts appear better at first than the state plan.

“But if they get a 3 percent pay raise but have to kick in more for (premiums) and prescriptions, that can eliminate your raise,” he said. “This plan buys pills by the millions. It’s economy of scale. And do you know what the renewal fee was on the state plan this year? Zero.”

Olson said the group expects to have a bill ready for the Labor Committee by early March.

Reach Michael Gannon at mgannon@norwichbulletin.com.

HARTFORD — A working draft of a health care bill is circulating, and a new Connecticut Healthcare Partnership Working Group is ready to review it.

The group hopes to help House Majority Leader Christopher G. Donovan ’s health care-pooling proposal become a reality.

Donovan , D-Meriden, has traveled throughout the state to talk about a health care partnership between the state and municipalities, small businesses and nonprofit organizations. Donovan ’s plan calls for employees working in those sectors to join the state insurance plan. With more people under the state plan, employers would have more bargaining power and the cost of health insurance would be lower.

“It’s an option for towns, small businesses and nonprof-its,” Donovan said, noting that he does not want to require the groups to join the state’s plan.

A draft of the legislation has been created, but Donovan said it needs input fromthe newly established working group, which is made up of legislators and stakeholders. Unions for municipal workers, boards of education, nonprofits and small businesses are represented on the committee. The Connecticut Conference of Municipalities will be the voice for cities and towns.

“Certainly, in this short session, we are going to be working pretty quick and pretty fast,” said Rep. Melissa M. Olson, D-Norwich, the group’s cochairwoman.

Olson said this is the group’s opportunity to talk about health care, adding that it also is an opportunity to educate people on the topic.

“Everyone’s concerns should be heard,” she said. “I’m really looking forward to working on this particular issue.”
While the group has words with which to work, Donovan said his plan has no official fiscal analysis. But in talking with several communities, Donovan said, the idea of pooling for health care could save cities and towns money.

For Meriden, Donovan ’s office estimates a savings of more than $1,500 per person on an individual plan. An individual health care plan in Meriden costs $7,550, while the same individual plan for state employees costs $6,000.

Members of the working group plan to do similar cost comparisons for small businesses and nonprofits.

Donovan said reaction to his health care proposal has been positive. People want good health care, and they want to participate, he said, adding that this is a concrete proposal that people can understand.

The majority leader also said his legislative colleagues —Democrats and Republicans — are supporting his initiative.

Donovan has said his plan is a step toward attaining universal health care in Connecticut and that the idea of health care pooling is not uncommon. Twentysix states, including Massachusetts and New York, have local government employees covered by state plans.

CT HEALTHCARE PARTNERSHIP WORKING GROUP ANNOUNCED
Healthcare pooling bill to be reviewed

House Majority Leader Christopher G. Donovan (D-Meriden) announced the formation of the Connecticut Healthcare Partnership Working Group and unveiled legislation that will cut healthcare costs for municipalities. The working group is made up of legislators and stakeholders who have been asked to review the legislation.

“Quality healthcare that costs less, that should be the guiding principle of the Connecticut Healthcare Partnership Working Group,” Rep. Donovan said. “This is money municipalities could be using for schools, seniors or property tax relief.”

The Connecticut Healthcare Partnership was unveiled by Rep. Donovan in November as a means to achieve taxpayer savings through healthcare pooling. Municipal employees would join the state employee health insurance plan, creating a large pool of insured lives leading to increased bargaining power and lower costs. Since November, Rep. Donovan has traveled around the state talking to groups including, municipal representatives, union members, small business owners, doctors, and elected officials.

Rep. Donovan announced the Connecticut Healthcare Partnership Working Group would be co-chaired by Rep. Melissa Olson (D-Norwich) and Sen. Mary Ann Handley (D-Manchester)

Rep. Olson said, “Healthcare pooling will provide much-needed tax relief to our overburdened property taxpayers. The Connecticut Healthcare Partnership Working Group will work expeditiously to make its recommendations to the legislature.”

“Our proposal recognizes that the most effective way to reduce property taxes is to reduce costs for municipal governments, and our proposal tackles one of the most expensive portions of any municipal budget: health care coverage for its employees, teachers, and their dependents,” Sen. Handley said. “Today we propose to include all Connecticut cities and towns in the state’s health insurance pool to use economies of scale and improve the state’s buying power, adding leverage that will have an immediate impact on costs.”

Ledyard — Health insurance that now covers 250,000 state workers could be extended to municipalities, nonprofits and even small businesses, saving Connecticut taxpayers millions of dollars, House Majority Leader Christopher Donovan and Secretary of the State Susan Bysiewicz said Monday.

“It's a good plan for everybody,” Donovan told about 100 local business executives, nonprofit leaders and politicians who gathered at the United Way's offices in Gales Ferry for a business roundtable arranged by the Chamber of Commerce of Eastern Connecticut. “Health care is health care. It cuts across party lines,” said the Meriden Democrat.

The meeting Monday that featured Donovan and Bysiewicz was the first of a series of gatherings they will be holding with businesspeople across the state to promote their voluntary plan, called the Connecticut Health Partnership.

The plan, which will be considered by the General Assembly during its current session, would extend state employee insurance to municipal employees, including teachers. A pilot program also would allow small businesses and nonprofits to buy in.

The projected savings on insurance costs for the state's 169 municipalities has been put at tens of millions of dollars. New London alone could save nearly $700,000.

“We're the wholesaler,” Donovan said. “How do we do it? Volume. And we put it out to bid.”

Savings will be found by adding more people into the state insurance pool, cutting the cost of insuring each individual while often providing better coverage, Donovan said. Adding municipal workers from around the state could produce a pool of 500,000 people, Bysiewicz said, and adding nonprofits and small businesses of up to 50 employees could bring the total to more than 1 million.

Anyone who participates in the insurance pool, which includes companies such as Health Net, Anthem and Oxford USA, would have to commit to staying in for at least three years.

Municipalities would have to pool all their employees, not just high-risk workers such as police and firefighters, Donovan said. “It's a voluntary plan,” he said. “It's not the government saying here's a plan for everybody.”

The plan includes co-pays of only $3 for generic drugs and $6 for name brands. Emergency-room visits are covered at no out-of-pocket cost, and doctors' office visits range from $10 to $15, depending on the insurance plan chosen.

“Good plan, costs less,” said Donovan, who represents the 84th District. “It's like 'Tastes great, less filling' (from the old Miller Lite beer commercials).”

But several people at the meeting expressed concerns about the proposal, especially insurance brokers who objected to the government potentially running them out of business. Even Tony Sheridan, the chamber president, asked philosophically whether government should step in and interfere in the private business sector.

Sheridan also pointed out that unions have been at the forefront of determining what types of insurance coverage should be offered, and asked if the small-business community will have some say in the process.

“We should stay engaged on this issue, because it may not be what we want,” he said.

Renee Main of the Builders Association of Eastern Connecticut questioned why the state insurance program couldn't be opened up to everyone. Donovan said he was taking the process step by step.

Later, he suggested, individuals and big businesses could be included, assuming the proposal works. Others asked why such a simple idea, already implemented in about half the states on the municipal level, hadn't already been tried in Connecticut.

“We're the Land of Steady Habits, but we're also the Land of Stubborn Habits,” Donovan said.

HEALTH INSURANCE PITCH MADE
Having Municipal Workers In State Plan Could Be Better Option, Lawmaker Says

VERNON— - Having municipal workers obtain health insurance through the state employee health insurance plan could save taxpayers lots of money while providing better coverage to employees, the majority leader of the state House of Representatives told a gathering in Rockville Thursday.

The proposal, which the General Assembly will consider in its coming session, grew out of talk about how the state could help provide property tax relief.

The thinking is that enrolling municipal employees in the state employee plan could save, at minimum, $1,000 a year per employee, Rep. Christopher Donovan, D-Meriden, told the gathering of municipal and labor leaders.

Donovan termed the proposal a partnership between towns and the state. Participation would be optional, he said.

Donovan has been meeting with officials in several communities across the state, and all have indicated interest because of the potential savings. Savings could range from $1,000 for employees with individual coverage to $2,000 to $4,000 for those with family coverage, Donovan said.

Including the town and the board of education, Vernon has about 700 employees.

Premium increases in the state plan have been lower than in many communities, said Sal Luciano, an official with the union that represents many state employees. And the increase in cost in the coming year is expected to be especially low, Luciano said.

Health insurance for employees is a huge cost for municipalities, and is often second only to salaries.

"Why haven't we done this before?" Donovan said. "I can't give you a good reason."

Some Vernon employees said they liked what they heard.

Catherine Earley, president of the Vernon Education Association and a teacher at Vernon Center Middle School, said better coverage for a lower premium is worth investigating.

Jim Tedford, vice president of the union local that represents Vernon's public works, parks and recreation and pollution control employees, said the proposal sounds good.

"If it saves the taxpayers money and it works for everybody, I think it would be a plus," Tedford said.

Donovan said it is important for all or most employees in a town or city to enroll in the state plan. Officials do not only want those unions that represent police officers or firefighters, who have riskier jobs.

At the same time, Vernon Mayor Jason L. McCoy expressed concern that if a small group of employees opted not to join the state health plan, the town might be forced to buy costly insurance for them.

Luciano responded that because employees share in the costs of the premiums, they have an incentive to seek the best deal.

Contact David Owens at dowens@courant.com.

The 2008 election may be the most entertaining and important in a generation, which is why I'm not writing about it. I'll tell you soon why I think the elections of '32, '68 and '08 are the most historic of the past 100 years. But not today.

Today it's time to talk about the state legislature and the good or ill it may do when next it gathers under the stately pleasure dome in Hartford. When national elections heat up, we tend to overlook more mundane business transacted closer to home. Big mistake.

It's easy to get caught up in the airy soap opera of a presidential campaign. Inquiring minds want to know: Did the Clintons play the race card? Is Rudy just plain nuts? Is there a job in this for me?

Legislative queries are prosaic and obscure by comparison: Say, how does that spending cap work? And what exactly is "tax effort" anyway?

Federal elections raise hopes of solving big problems: energy, health care, Iraq. But you can get a new Congress and still not end a war. Washington's last health care fix was Medicare Part D, which forbade negotiating the prices of the drugs it subsidized. (Oddly enough, this approach is called "free market.")

Health care's a fine example of why we must look for change closer to home. It's hard to effect change, but easier here than down there. Lobbyists, including insurers and HMOs, wield more power in Washington than in Hartford. We have public financing of elections now, which for bargain basement prices will rein in those who routinely bilked us out of billions. Our legislative process is less of a problem; our state Senate can't even filibuster.

In 2007, the legislature flirted with real health care reform but at the eleventh hour turned tail and ran. They did some useful things, expanding coverage for kids and hiking payments to hospitals. But they perpetuated a useless pattern: the public footing the bill for the very old, the young poor or sick, leaving costs to spiral, the middle class to fend and spend for itself and insurers to chase their ideal customers — joggers with trust funds.

This year, there's a chance something big might happen, even in a session that opens in less than three weeks and lasts just three months. One reason is leadership. Some history:

When it came time last year to pull the trigger on change, politicians flinched. There weren't enough data, they said, to support it. Never mind that health care is in certifiable crisis and may be the most exhaustively studied public policy issue of modern times.

So they rounded up a blue ribbon commission — or a task force or maybe it was a posse — to hunt up some fresh facts, and told it not to report back till next December — that is, until after another legislature had come and gone.

Enter Chris Donovan, the puckish and progressive House majority leader. Donovan wants to open the state employee health care plan to municipalities and, on a pilot basis, to nonprofits and small businesses. The program is purely voluntary and costs the state little or nothing.

Donovan's doing the hard work of laying the foundation, touring cities and towns, collecting data, pitching change. Any politician who takes a bold position and does the grunt work ought to get a medal. From crunching the numbers, Donovan knows the real risk lies in doing nothing. He asks a simple question: Why not give it a shot?

As readers may recall, this is an idea close to my heart. It was first proposed in 1991. Every year since, the insurance industry, fearing the bargaining power of big pools, has flicked it like a caterpillar off its shoulder. But the game's drawing to a close. Donovan's leadership brings the end even closer.

The state's mayors and first selectmen came to Hartford this past week, on the prowl for a handout. Many truly are desperate. But the state is flush up against a spending cap and a recession. Donovan's analysts say New Haven alone would realize over $8 million in savings just by joining the state plan.

Donovan isn't alone. Appropriations Chairwoman Denise Merrill, once a skeptic, knows if we don't cut health care costs there'll be nothing for the mayors or anyone. AFSCME, the state's largest public employees union, has stepped up.

It's the beginning of a powerful coalition. All it needs is your participation. So enjoy the high drama of the presidential campaign, but remember: The stakes here are just as high and a legislature always needs supervision.

Bill Curry, former counselor to President Bill Clinton, was the Democratic nominee for governor twice. His column appears Sundays on the Other Opinion page. He can be reached at billcurryct@gmail.com.

House Majority Leader Christopher G. Donovan (D-Meriden), following up on his November meeting in New Britain City Hall, announced the Connecticut Healthcare Partnership would yield $896,758 in annual savings for New Britain taxpayers. The savings are based on what the city currently pays for healthcare versus what the state pays for comparable benefits.

“Good healthcare that costs less, that has been our message all along,” Rep. Donovan said. “This is money the city could be using for its schools, seniors or for property tax relief. I am happy to see these savings available for the people of New Britain. It is another clear argument in favor of healthcare pooling.”

The Connecticut Healthcare Partnership would achieve taxpayer savings through “pooling.” Municipal employees would join the state employee health insurance plan, creating a large pool of insured lives leading to increased bargaining power and lower costs.

Rep. John Geragosian (D-New Britain) said, "This is a no-brainer. It will save the taxpayers of New Britain money and ensure our city employees will have a good insurance plan to cover their families. I applaud Chris Donovan for working so hard to make this plan a reality."

"This would save taxpayer money by making government more efficient, which the people want us to do to keep property taxes down," said Rep. Tim O'Brien (D-New Britain). "And I want to expand this idea so that businesses and individuals can get this good health coverage at the same bulk price the state can get."

Rep. Peter Tercyak (D-New Britain), "Once again we see that the power of working together is better than working alone. By partnering with the state, we can achieve real savings for the people of New Britain."
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The Connecticut Healthcare Partnership would be voluntary for municipalities interested in pooling. The proposal could also be expanded to include small businesses.

Since the November meeting in New Britain, Rep. Donovan has traveled around the state talking to and receiving positive reactions from groups including, municipal representatives, union members, small business owners, doctors, and elected officials.

Connecticut Healthcare Partnership

In the News 2008