In a bitter piece of irony, Connecticut’s infernal practice of shifting health insurance costs to employers is about to come back and bite the state right in the wallet.
For years, it has seemed legislators never met an additional coverage they didn’t think was absolutely necessary. Despite persistent warnings that the practice was contributing to the state’s unhealthy business climate, the legislature moved ahead. In the just concluded session alone, seven new mandates were added to the 59 already on the books, as reporter Greg Bordonaro details on our front page. Even before the new mandates, Connecticut ranked fifth in state-imposed health insurance mandates.
Major employers who self-insure are regulated by federal rules, thus dodging the state mandates and their costs. Small- and medium-sized businesses aren’t as fortunate. They have no choice but to buy state regulated insurance coverage for their employees and swallow the tab for the mandated coverage.
But under the federal healthcare reform scheme, some of these businesses — and some individuals — will be buying their health insurance through state-specific insurance exchanges starting in 2014. The feds will mandate a minimum level of coverage and any state is free to add its own mandates. But if a state does, it’s the state that will be getting the bill for that extra coverage.
Gulp.
Given Connecticut’s looming long-term unfunded obligations, taking on new costs isn’t an attractive option. So all those legislators who so eagerly raised their hands to pass mandates when the cost was being transferred to business will now have to raise their hands on finding a way to solve this self-inflicted wound.
Will they suddenly channel the voices of the business community saying these are real costs and just say no? Will they tighten state spending someplace else to compensate? Or will they try to find a way to pass the cost back to business, perhaps in yet another new tax?
It’s hard not to be cynical about where that conversation will take us. But it’s not too early to start reminding legislators that in healthcare, much like life, there just is no free lunch.
Â
When will melodrama end?Â
It is with mixed emotions that we cheer the leadership of SEBAC, which has performed amazing contortions of logic to defy the original vote on a concession agreement with the governor.
In the end, the labor leaders appear on track to saving their members from themselves.
Never mind that the ‘new’ agreement will have to be worse than the old one because the state must recapture the millions in raises it was forced to pay July 1. Those raises would not have occurred if the original vote had approved the deal. By some calculations, the state is losing an extra $1.6 million a day from July 1 until a new deal is signed. That’s money the governor correctly is saying state employees will have to give back in some form.
And therein lies the next potential rub. As Team Malloy continues the drumbeat of layoff notices, unionized employees are chafing. Some are unhappy that they’ll now be asked to give back even more; others are miffed that the leaders have hijacked the union’s internal process, threw out a result they didn’t like and are now talking about approving the new deal without a full vote; still others — the core 43 percent who voted no the first time — still think it’s a bad deal, despite being assured it’s the best labor deal in the nation.
What could possibly go wrong here?
At this point, a new deal is the less awful of two ridiculous options. Let’s get it done, wipe the egg from our collective face and move forward.
