A new report commissioned by Connecticut’s insurance industry says the state’s proposed health care reform law will cost rather than save the state money by mid-decade, contradicting an earlier assessment of the controversial measure.
The study by Hay Group, a consulting firm commissioned by Connecticut’s powerful health insurance lobby, which strongly opposes Sustinet, said a key element of the proposal that converts the state-administered general assistance program, or SAGA, into a Medicaid program will have a net cost of $62 million by 2017, rather than save the state money as was previously predicted.
In addition, the report said implementation of SustiNet, which calls for the creation of a  self-insured public insurance option, carries “insurance risk” and liability implications for Connecticut, because the state would be responsible  for paying the benefit costs for all SustiNet enrollees – and the associated risk if premiums are lower than the actual claim costs.
The Hay Group study, released Wednesday, contradicts earlier assessments of Sustinet, which said the plan could potentially save the state more than $226 million to $277 million a year.
The Universal Health Care Foundation, which has been instrumental in shaping and pushing Sustinet, issued a statement Wednesday calling the Hay Group study “deeply flawed” and containing numerous “factual errors.”
“We’re taking a closer look at the report, but the most superficial read shows it contains glaring inaccuracies,” said Juan A. Figueroa, president of the Foundation. “They clearly misunderstood the SustiNet report. They’ve taken numbers and used them selectively to arrive at erroneous conclusions.”
The conflicting assessments 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.
