🔒Businesses are not asking for a public health insurance option

Last week, I was happy to see Connecticut ranked No. 3 nationally in healthcare by U.S. News & World Report.

The ranking was based on healthcare access and quality as well as public health. I’m not surprised by the ranking considering the incredible combination of hospitals, health plans and pharmaceutical companies headquartered here.

Last week, I also watched in dismay as Comptroller Kevin Lembo unveiled a massive healthcare bill that would include a new government-run insurance program for the state known as a “public option.”

As president of the Connecticut Retail Merchants Association, we watch all bills that can have an impact on businesses, especially retail business. We know when government moves to create a new health insurance program nothing is free and that often business will get the bill to fund it.

While nothing is perfect, we are lucky here in Connecticut that we have a health insurance marketplace that provides options, and provides consumers and small businesses access to several different policies to meet their needs and their budget.

It makes sense that our state has so many health-insurance options.  We are the “Insurance Capital of the World” and that makes the insurance industry more important to our state’s economy than it is for any other state. We have tens of thousands of Connecticut residents employed by insurance companies that shop in our stores and provide an important economic lift to our economy.

That’s why it does not make sense for legislators to turn their backs on this core state industry and pursue a “public option.” The state should not be in the business of running a health insurance program for businesses. This is not something that retailers or other business owners have been clamoring for and demanding.

In fact, it’s become more clear that this is a policy idea by activists who are clear that they eventually want a single-payer system for the state.

We fear such proposals will result in a destabilized private insurance market and higher taxes. Given the history of government health plans, these fears are well-founded. Just look at the state’s municipal partnership plan, which provides health coverage to municipalities and has a $10 million current-year deficit, or the government-run health exchange Access Health, which costs $30 million to run.

The comptroller promises a 20 percent savings in his plan but establishes no rationale on how that would happen. Some of the bill details are concerning, including a new $10 per member, per month surcharge on individual health insurance policies and a new $5 per member, per month surcharge on group health insurance policies. Plus, it includes adoption of a new individual state mandate with a penalty provision of $695 per adult, or 2.5 percent of their annual income. I wonder whether this is factored into the 20 percent savings?

If legislators create such a plan, the inevitable result will be the erosion of private-sector insurance. The regulatory advantages and ability to be subsidized by state tax dollars will provide a huge market advantage for the government-run plan. We will see a death spiral for private insurance across the state, leaving the government program as the dominant — or only — insurance provider.

Experts are warning legislators about the negative consequences of a public option. Lawmakers should not rush into enacting a new healthcare system that will have such profound long-term consequences for the state. We are not asking for this.

Tim Phelan is the president of the Connecticut Retail Merchants Association.