With No Reserves, Unregulated State Health Insurance Partnership Plan Seeks Another Expensive Rescue From Taxpayers.

Extraordinary exemptions from common sense requirements have not been enough to steady the finances of the comptroller’s health insurance Connecticut Partnership Plan. The program requires another bailout to keep its municipal members from a 10.5% increase.

The Connecticut Partnership Plan received a $40 million infusion from the state in December. Without it, the Plan would have inflicted a 14.5% increase on plan members this year. Members were advised to plan for an 8% increase in their budget deliberations. They were recently told that advice had become inoperative. The cost of coverage would be hiked by 10.5%.

Legislators and Local leaders locked in three-year contracts with the plan scambled over the weekend to claw another $25 million from taxpayers. Then-State Comptroller Kevin Lembo told legislators last year, “The Connecticut Partnership Plan has an enrollment of nearly 60,000 members and over 140 participating groups. That plan has allowed the municipalities that voluntarily join to protect themselves from skyrocketing costs due to a few catastrophic health events, keep costs predictable and offer the highest-quality care to teachers, first responders and other town and city workers.”

What’s been predictable is that without the reserves required of private health insurance companies, the state treasury will constantly be at risk of looting by the the Connecticut Partnership Plan. Rates charged by private health insurance companies are regulated by the state’s insurance department. Those companies are required to maintain significant reserves to deal with the swings and roundabouts that circumstances can inflict on the most prudent expectations of human behavior.

In February 2021, Lembo told legislators, “The Partnership Plan is now projected to run at an MLR under 100% for the foreseeable future, cementing its reputation as a market-leading option for municipal and non-state government groups.” Fifteen months have battered that declaration.

At the same public hearing, Senator Matt Lesser pointed out in what now looks like a misbegotten attempt to be helpful to Lembo that “in fact you’re directed to reduce risk to taxpayers and to make sure we are protecting the General Fund in the State of Connecticut.” Lembo replied, “That’s correct, Senator.”

A correct statement of the law but not of the plan’s finances. Lesser should have an opportunity to explain what’s gone wrong in the past 14 months.

Approval of an annual increase of 14.5%, 10.5% or 8% sought by a private insurer would draw the fury of consumer groups and the comptroller’s office. The same people who criticize companies that operate in the regulated market will likely remain silent as the comptroller’s plan scrambles to convince legislators to require taxpayers to provide tens of millions more in rescue financing.

Published May 2, 20222.