Connecticut Gov.’s Budget Shifts $9M in Public Health Expenses to Insurers

Some of Connecticut’s insurers would pick up the tab for breast and cervical cancer detection, AIDS services and venereal disease control under Gov. Dannel P. Malloy’s proposed two-year, approximately $40 billion state budget.

The Democrat’s plan, which is being considered by the Democrat-controlled General Assembly, shifts nearly $9 million in public health expenses to the state’s Insurance Fund each year. The account is funded by assessments of insurance companies operating in the state.

The proposal comes about three years after the state decided to charge about 20 health insurers and third-party administrators for some routine childhood vaccinations made available to health care providers. Malloy’s office said the same insurers would be affected by this plan.

The Insurance Fund also pays for other state expenses, including operations at the Department of Insurance and the Office of the Healthcare Advocate. Approximately 100 domestic insurers, including property, life and casualty companies, contribute to the account.

Sen. Kevin Kelly, R-Stratford, the ranking Republican senator on the legislature’s Insurance and Real Estate Committee, contends Malloy’s latest proposal is a way to offload the state’s budget woes onto the Insurance Fund and ultimately ratepayers, who likely will cover the expense in higher insurance premiums.

“This is going to get buried in, and I don’t think it’s fair to the consumer or Connecticut taxpayers that they’re being treated this way,” said Kelly, adding that lawmakers are considering legislation that calls for better disclosure of fees and costs for insurance products.

“One of the biggest gripes we hear from people who purchase insurance is that the cost of insurance in Connecticut continues to go up,” he said. “When we bury these costs into insurance, it increases the cost, thereby making it less affordable.”

Ben Barnes, Malloy’s budget director and the secretary of the state’s Office of Policy and Management, contends shifting the cost to the insurers in a difficult budget year is a way to protect services such as the needle and syringe exchange for drug addicts and X-ray screening and tuberculosis care.

“Obviously, there are a lot of cuts in this budget, and we struggle to find ways to make those cuts in ways that preserve critical programs,” Barnes said. “We ultimately feel like this is a good way to ensure that these programs continue to operate.”

Malloy’s plan to shift more of the state’s public health expenses onto the insurance industry comes several years after he pledged to “find new and innovative ways in which we can grow the insurance sector in our state.”

Last May, Malloy spoke about the industry’s importance to Connecticut at a National Association of Insurance Commissioners’ forum in Washington, D.C. He said insurance represents 9 percent of the state’s gross domestic product, and insurance and financial services companies employ more Connecticut residents than any other industry.

Barnes said the administration’s 2012 decision to cover the cost of vaccinations through an assessment on insurers actually helped the industry save money. He said the state is able to buy vaccines from the federal government at a cheaper rate than the insurers.

Barnes acknowledged the administration has “moved the line a little bit” by adding these public health costs to the assessment. But he said insurers could still benefit.

“These are important public health programs that either offset costs, which would be borne potentially by private insurers, or that potentially reduce the spread of disease, which is important,” he said. “We think the impact is reasonable for the value they get from having these programs.”

Topics Carriers Connecticut