Business groups say relief fund transfer shows state insurance fund is shaky

Transferring $40 million from a COVID-19 relief fund into the state’s insurance plan for municipal employees would appear to be routine.

The office of state Comptroller Kevin Lembo on Tuesday characterized the move benefiting the state’s Partnership Plan as just that. But only months after a bruising battle between business and health insurers on one side and Lembo and legislative Democrats on the other over legislation to give the state greater reach into running health insurance, critics weren’t buying it.

“Committing $40 million in COVID relief funds to cover ongoing deficits in the Partnership Plan underscores what we’ve said all along,” said Susan Halpin, executive director of the Connecticut Association of Health Plans. “Premiums appear to be artificially suppressed.”

Chris Dipentima, president of the Connecticut Business & Industry Association, said the plan is “completely unstable.”

“This continues to verify what our members say, that government is not capable of running something the private sector is running,” he said.

Joshua Wojcik, assistant state comptroller, said the comptroller’s office transferred the federal COVID19 relief funds into the Partnership Plan to avoid letting the funds expire Dec. 31. The money was for allowable expenses such as COVID-19 testing and treatment, he said.

In a letter to administrators of the Partnership Plan, Lembo said the money will significantly increase the balance and reduce health care costs and premium adjustment next year.

Lembo, who is resigning Dec. 31, and the business groups have squared off repeatedly over the past few years over legislation to expand insurance offered by the state to private businesses and nonprofits. This year’s legislation died when Gov, Ned Lamont said he would not support it.

Lembo and business critics argued early this year over the Partnership Plan’s solvency. He insisted that the plan most often paid out less in claims than it raised in premiums. Exceptions were in 2018 and 2019 before the General Assembly made fixes to regional cost disparities, Lembo had said.

In the most recent 12-month period the medical loss ratio was 92.3%, or for every $1 in premiums, the plan paid out 92.3 cents for claims, the comptroller’s office said.

Dipentima said the transfer demonstrates the Partnership Plan, which he called a “bottomless pit,” is losing money.

“It needs $40 million to stabilize itself,” he said. “The taxpayers are the backstop of this plan.”