From halfway around the globe, Governor Malloy put his finger on the problem:
“I don’t think we have competed on an equal footing with other states,” Malloy told the media in a late-night call from his China trip. Here he was, the first Connecticut governor to visit Beijing in 25 years, playing catch-up in an international treasure hunt.
Meanwhile, back in Connecticut, UConn economist Steven Lanza was unleashing a new study that suggests the state’s efforts to throw millions of dollars at job retention are ill advised. So little of our economy can be affected by state policy, Lanza says, that spending our money on infrastructure, education and business climate makes more sense.
Fellow economist Nick Perna took the analysis a step further, suggesting the whole region is wasting money competing for business when the states should be cooperating to leverage their similarities and attack their common problems.
So the battle is joined. Do we throw more logs on the fire in a rush to catch up with other states or do we try being the voice of reason that works with other states to end this arms race?
Clearly, the economists have a point and if we had any statesmen on our team, perhaps we could broker sanity in our time. But, alas, such is not the case. We have a governor who enjoys media mud-wrestling with New Jersey Gov. Chris Christie. We have a congressional delegation of rookies, backbenchers and a lame duck. And, as Malloy correctly points out, we’re behind in the game.
We’re not exactly in the strongest position to make a case for a new way of thinking and acting. So, we’ll defy the wisdom offered by economists and throw more money into the game.
The silver lining is that at least this time, the money being wasted is going to business.
Insurance rates
The spokesman for the Kaiser Family Foundation seemed almost giddy in reporting the big-picture view of health insurance costs.
“These are strikingly low numbers to those of us who have been studying health costs for a long time,” said Drew Altman, president of the foundation. “A 4 percent increase in health premiums is good news.”
But like so much in healthcare, there are statistics and then there’s personal experience.
While the 4 percent average may sound good, it still significantly exceeds wage growth. And it masks the experience of small group policy holders here in Connecticut who are staring at 12 to 14 percent increases. State regulators are reviewing the requests, which fall just below the threshold at which the state would be required to hold public hearings.
So regulators will dance a little, gnash their teeth, lean on the insurers — including Anthem and ConnectiCare — and still approve double-digit increases.
Aetna, for example saw its bid for a 14 percent hike for its small group plans whittled to 12.6 percent last spring. Oddly, the Insurance Department lashed out at Oxford, which sought the lowest rate increase of 8.7 percent. That bump was not justified by Oxford’s experience, the department said in approving hikes between 7.4 and 8.4 percent for Oxford’s small group clients.
In a world where wages aren’t growing and prices — aside from gasoline — are fairly stable, a double-digit increase in premiums is a real blow to small businesses. And the rate spiral will be one of the factors weighing on owners as they evaluate whether they even want to continue to offer employee health insurance in the brave new world of ObamaCare, come 2014.
There’s a delicate balance here and nobody can say with certainty that the reforms will work as planned. But the one certainty is that the existing system is broken and over the past decade has produced costs that are unsustainable to small business.
