An independent cost estimate of Connecticut’s comprehensive health care reform proposal doesn’t put a final price tag on the measure but said it could cost the state hundreds of millions of dollars a year.
The state’s Office of Fiscal Analysis (OFA), an independent body that analyzes the cost impacts of legislative proposals, issued a report late Monday that crunches numbers on several aspects of Sustinet, which calls for payment reforms and creating a public insurance option, among other initiatives.
The biggest cost driver identified by OFA is the creation of a “basic” health plan for low-income adults, which would run an annual tab between $222.8 million and $478.6 million a year. That basic health plan would also provide insurance coverage to about 100,000 people.
An earlier analysis done by MIT economist Jonathan Gruber said that measure would save the state $50 million a year because it would increase the amount of federal government funding to Connecticut. But OFA concluded that the ultimate costs of that part of the proposal would exceed the federal funding.
And creating a quasi public agency to oversee the Sustinet program would cost $4 million to $6 million a year, the OFA report said.
But OFA did not provide an all-encompassing price tag in its report, which adds a fresh wrinkle in the debate about how Sustinet will ultimately impact state finances. Last week a report commissioned by the insurance industry, which opposes Sustinet, said the proposal will cost rather than save the state money by mid-decade.
But proponents of Sustinet said the reform bill could potentially save the state more than $226 million a year.
Read the rest of the OFA report here.
Keith Stover, a lobbyist for the state’s insurance industry, said the OFA report should put to bed the idea that Sustinet will actually save the state money on health care costs.
“I think the OFA report is so clear that it marks the end of aspirational math on this issue – the fact that some folks want to believe that there are “savings” doesn’t make it so, no matter how strong the belief,” Stover said.
The Universal Health Care Foundation, which has been instrumental in shaping and pushing Sustinet, issued a statement saying there are parts of the OFA analysis “that are problematic and merit closer attention.”
Juan A. Figueroa, president of the Foundation, said OFA significantly underestimated the amount of federal subsidies the state will gain, and the cost of covering low-income adults was significantly overestimated. Â
“In fact, our experts, including Dr. Jonathan Gruber, one of the nation’s leading economists at MIT, actually calculated savings of $50 million,” Figueroa said.
All of the different cost estimates continue to add to the confusion over the controversial measure, which has opponents and supporters deeply divided.
Democratic lawmakers, along with the Universal Health Care Foundation, at least one small business group, and others, have been pushing for the adoption of the proposal, which has passed three committees so far.
But Republicans and the Connecticut Business & Industry Association oppose the measure over concern about its overall costs, which still remains uncertain and may ultimately prove difficult to pinpoint exactly.
Even Democratic Gov. Dannel P. Malloy has raised concerns about the cost and scope of the measure as he tries to close a $3.2 billion budget gap.
And support from the medical community is on the wane with the recent decisions by doctors and cardiologists to either withdraw their support for the measure or raise deep concerns about it after lawmakers decided to remove medical liability protection from the bill.
Besides the public insurance option Sustinet calls for other sweeping changes including implementing the medical home model concept and linking provider payments to performance; expanding the state’s Medicaid program; and investments in electronic health records.
