Health plan no big deal for city

Joining state workers’ insurance pool won’t produce any local savings

By Mary E. O’Leary
Register Topics Editor
NEW HAVEN — City officials support the concept of a voluntary health care pool plan just approved by the General Assesmbly, but said their analysis found no savings for New Haven.
The legislature approved a historic bill that allows towns, businesses with fewer than 50 people and nonprofit groups to join the pool of state employees to get better and more stable insurance rates.
Estimates by Democratic House Majority Leader Chris Donovan’s office on projected savings for several towns included an $8.6 million savings for New Haven.
But city budget chief Lawrence Rusconi Thursday said its health benefit consultant looked at a sample of 2,242 New Haven workers and compared the costs of the current health plan versus those offered state workers and found New Haven’s was 1.06 percent cheaper. “Essentially, they are even,” Rusconi said. “An $8.6 million savings is unrealistic.”
Sean Matteson, chief of staff to Mayor John DeStefano Jr., said just because New Haven didn’t benefit “is not to say smaller communities wouldn’t see significant cost savings.”
New Haven covers about 14,000 employees, family members and retirees in negotiated health plans with its 14 unions.
The city is self-insured. It paid out a net rate of $50.7 million for claims last year, which includes $3.4 million to Anthem Blue Cross and Blue Shield to administer the program. The gross amount of claims was $70 million, which was offset by $22.7 million in employee contributions.
The contribution ranges from 10 percent to 20 percent, Rusconi said, and the city is hoping for a higher share to help offset a projected $14.2 million city deficit next year.
Rusconi said if the city opted to join the state pool, it would cost $15 million to make the transition, which it was in no position to do.
New Haven put out a request for proposals for health insurance for next year, which are due Tuesday, and Rusconi said it also invited the state to bid on the plan.
State Democratic leaders have been looking for some time to open up the state employee health plan to more employers to help them with costs.
The proposal, which is voluntary, will soon go to Gov. M. Jodi Rell, but she has been hinting she may veto it.
The state recently renegotiated rates with the three bidders offering choices to state workers and is projecting a $54 million savings. If more residents are added to the pool, however, two said they would have to recalculate their bids, leaving the amount of savings up in the air.Senate President Donald Williams Jr., D-Brooklyn, and Senate Majority Leader Martin M. Looney, D-New Haven, urged Rell Thursday to sign the legislation.
“This landmark bill was one of the concepts associated with the HealthFirst Connecticut initiative passed last year and is one of the most important accomplishments of the 2008 legislative session,” Williams said.
“The status quo is crushing local taxpayers and small businesses,” said Looney. Union leaders and Juan Figueroa, president of the Universal Health Care Foundation of Connecticut, praised the bill, while the Connecticut Business and Industry Association opposed it because of the potential loss of state savings.
Another option available to towns is the Enhanced Municipal Health Insurance Plan offered this year by state Comptroller Nancy Wyman.
This plan is self-funded, like New Haven’s, with the towns pooling money to pay claims and an insurer hired to administer it. About one-third of the state’s towns are looking into it.