SustiNet: Connecticut Health Reform in the Wake of Federal Action

Universal Health Care Foundation of Connecticut

Small Business Meeting

April 12, 2010

Stan Dorn

The Urban Institute

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Overview

What is SustiNet? How would SustiNet work under national

reform? SustiNet and small business

Part I

What is SustiNet?

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The history of SustiNet

Small business deeply involved in SustiNet’s genesis and development

2009 legislation SustiNet Board of Directors must issue:

5/30/10 report analyzing federal reform legislation 12/31/10 report proposing state legislation for 2011

SustiNet committees and task forces Present recommendations by 7/1/2010

More than 150 volunteer experts now serving on SustiNet Board, committees, and task forces

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SustiNet’s basic idea

The state can do a better job providing health coverage to people for whom the state is responsible SustiNet: a self-insured plan that implements best

practices for a 21st-century health care system Examples: incentives to promote health, implement IT,

improve prevention, coordinate care for the chronically ill, etc.

SustiNet becomes an option for individuals and employers to buy

HUSKY and other subsidies cover the low-income uninsured

Part II

How would SustiNet work under national reform?

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One possible approach

Before 2014, SustiNet could be open to small firms In 2014 and later, SustiNet is one additional health plan

option in the Exchange How does SustiNet differ from other plans?

Implements best practices for 21st-century health care, using new resources available under national reform

o Potential to lower premiums Other features can be added to SustiNet

o Multi-year contracts, for more predictability?o Transparency re: how premium dollars are spent?o Benefits affordable to small employers? o What else makes sense?

Part III

SustiNet and small business

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The impact of adding SustiNet as an additional health plan option

If SustiNet slows premium cost growth, private insurers may do likewise to preserve market share

Applying to state-funded populations best practices for 21st-century health care makes it easier to implement these reforms more broadly

Other features can be built into SustiNet to help it serve small business more effectively and affordably

SustiNet positions CT to benefit from new federal resources available under reform

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Short-term imperative: engage SustiNet Board and committees

Board member Joe McDonagh is a small business owner and insurance broker whose clients are small employers

For ongoing information, visit http://www.ct.gov/sustinet Possible issues to raise

Offer SustiNet before 2014 Permit SustiNet to be sold through current channels that market

to small firms (e.g., brokers, chambers of commerce, CBIA) Design SustiNet to meet the needs of small firms

A real challenge: getting good information

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Conclusion: overall effects of national and state reform on small business Disadvantages

If > 50 FTE employees, new costs for companies not offering health benefits

People earning > $250,000 (joint filers) pay more Medicare taxo But special protections for small-firm income

Advantages Most small firms that now offer coverage will be much better off

o Lower premiumso Tax creditso Less administrative hassle

At small firms not offering coverage today: o Better ability to recruit and retain employeeso Firm owners can get good insurance without discrimination against

people with health problems More entrepreneurs, since people who need insurance can

leave jobs to start new companies