We now have doubts about this latest state plan

Our editorial board has said that “a plan that anyone in the state could buy into could unleash a wave of growth in Connecticut.” But this plan isn’t open to everyone, and it’s pricey.

Whether it’s a town or a tiny business, small employers desperately need affordable health insurance. Up to now, we have supported the state’s efforts to provide that insurance. The latest attempt, however, looks costly for customers and risky for a state with huge debt.

Senate Bill 842 would create a state-run health insurance option for small businesses and nonprofits (but not individuals). If it passes, it will be the state’s fifth or sixth attempt at such a plan. The previous attempts have disappointed. This one might too.

Here are four questions about the proposal.

How will this work when others haven’t?

The first failed attempt, a quarter-century ago, was the Municipal Employee Health Insurance Program, also open to small businesses and nonprofits. It became “too expensive,” says Ellen Andrews. She signed up her Connecticut Health Policy Project, but couldn’t afford it after a year.

Next was the Charter Oak Health Plan. It no longer exists.

Then came the CT Partnership Plan and Partnership Plan 2.0, for municipalities only. Those plans mirror the state employee health plan.

Senate Bill 842 would create a similar plan for nonprofits and small businesses (up to 50 people).

Strangely, “very little information on the Partnership Plan or the State Employment Plan are available publicly,” says the Connecticut Health Policy Project.

It took the crowbar of the state’s Freedom of Information Act to pry lose that information. The records show that Plan 2.0 had a deficit of nearly $32 million in fiscal 2019, the last normal year for insurers.

Who covered that deficit? Taxpayers.

They can be forgiven for wondering whether government should get out of the insurance business. Connecticut has other financial demands right now, including the billions of dollars it owes in debt.

Defenders of the newest plan say taxpayers won’t be on the hook this time. The state will buy insurance to cover any deficit. That insurance, however, will be expensive — adding to the program’s cost.

Speaking of cost, let’s take a look at the price of the current plan.

Partnership Plan 2.0 now costs $10,536 to $12,252 a year for single coverage. Private-sector insurers offer coverage for $7,607 per year on average. Admittedly, the private-sector plans are not as rich in benefits as the Partnership’s. Nevertheless, the Partnership would have to lower prices by a third to compete on cost.

Our editorial board has said that “a plan that anyone in the state could buy into could unleash a wave of growth in Connecticut.” But this plan isn’t open to everyone, and it’s pricey.

Isn’t Connecticut supposed to be the insurance capital?

It does seem odd that state government is competing with the state’s most famous industry. It might be dangerous too. Five top insurance executives have made clear that they can take their offices elsewhere.

Connecticut can’t afford to lose any more jobs. Unemployment is already at 8.3 percent, two points above the national rate.

By the way, CEOs aren’t the only opponents of this new plan. The 4,000-member union representing firefighters across Connecticut wants nothing to do with it.

Will the playing field be level?

Maybe — or maybe not. The revised bill now says the new plan must follow the same state rules as other insurers. But some Democratic leaders want that language stripped.

State Comptroller Kevin Lembo says making the new plan abide by the state regulations “would prevent all of the cost savings baked into the bill.”

That’s not very sporting. Other insurers must play by those rules. Why can’t the state?

Is this the right way to make health care affordable?

Connecticut can squeeze health insurers only so much.

Yes, insurers have had a good year. Customers sheltering at home from COVID have skipped doctors’ appointments, which means more money in insurers’ pockets. And yes, their CEOs do make millions of dollars.

But salaries and profits are limited under the Affordable Care Act. Insurers must spend at least 80 percent of premiums on health care costs and improvements. They can’t spend more than 20 percent on administration, overhead and marketing.

CEO pay isn’t causing high insurance costs. The cause is high health care costs. The question is how to lower spiraling drug prices and other costs.

It’s with sadness that we say this, but Senate Bill 842, laudable in its goal, seems tricky for a state in deep debt.

The math just doesn’t work. It’s hard to see how taxpayers don’t end up with the bill.

Hearst Connecticut Media The Capital building in Hartford.