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SustiNet Won’t Help the Uninsured or the Most Vulnerable

SustiNet Won’t Help the Uninsured or the Most Vulnerable

Despite the best intentions, SustiNet will not make the poor and sick any healthier.

Although some see a public option or government-run insurance company as a panacea, even the experts who designed SustiNet knew that it wasn’t. The public option would cover 150,000 people, they reported, but a maximum of 3,000 would have been previously uninsured.

Insuring 147,000 people so that 3,000 new people can get insurance is not a well-designed solution. Yet, the initial version of SustiNet this year included a public option. (There have been several versions this year, in addition to versions from previous years, including a study bill that passed in 2009.)

In addition to the dismal projections by SustiNet’s backers, state-run health care doesn’t have a good track record.

Medicaid is more of a false promise than a path to better health. Many doctors simply choose not to accept Medicaid patients at discount reimbursement rates, turning holders of state-issued insurance cards into second-class patients.

Another problem with SustiNet legislation is its size. The number of components make it difficult to see which changes save money, which ones add costs and how much each change impacts health. Perhaps some of the smaller parts of the bill – there are many – could pass on their own with broad support.

If state employees, Medicaid patients and the new public option are combined under one bureaucracy – as they are in SustiNet – the true cost of health care for each subgroup will be obscured. Some state employees, for example, fear they will end up subsidizing the other groups.

And even with seven plans under the SustiNet umbrella, five would be administered by the Department of Social Services, one by the Comptroller and one by the new SustiNet Authority, which would minimize any administrative savings or bulk-purchasing discounts.

In any state, the government entering the insurance business would have problems, but in Connecticut it is self-destructive. Aetna CEO Mark Bertolini, whose company employs 7,200 in Connecticut, told the Hartford Business Journal last December that a government-run insurance plan would not be “supportive of the state’s private insurance industry.”

Unfortunately, many people who genuinely want better health for the people of Connecticut have come to believe that SustiNet would provide it. Instead, the plan to change health care in Connecticut will give more power to those already in power – the State of Connecticut.

Rather than a centralized attempt at a single solution, Connecticut needs a more targeted approach.

For example, there are a number of reasons why people don’t have health insurance. Some people are already eligible for government help, but don’t receive it. Others make too much for existing subsidies, but can’t afford insurance. And finally there is a group that can afford insurance, but choose not to buy it.

A solution for the one group won’t work for the others and a solution that attempts to help all three isn’t likely to help anyone.

The uninsured who are already eligible for Medicaid or HUSKY may respond to improvements to those programs. In turn, those improvements also have to be targeted. Some people are on Medicaid because of a lost job, while others are on Medicaid because of old age or severe health problems. Ultimately, these three populations need different types of health care.

The goal of a program like Medicaid should be to put itself out of business or, realizing the impossibility of that ideal, to serve the smallest number of patients. By focusing Medicaid on the people who most need it, the poorest and least healthy will get the best health care customized to their unique needs.

Medicaid should help those who can transition from its programs to do so smoothly and with a good chance of not returning.

All Connecticut residents suffer from the poor design of Medicaid. Low reimbursement rates put pressure on local hospitals and doctors, crowd out charity and encourage the state to restrict the supply of health care.

Raising reimbursement rates will make Medicaid more attractive to people who qualify but don’t bother to sign up.

If the government actually pays for the health care it buys, everyone will get a better price. This will make insurance affordable for a new group of people who can’t afford it at current prices. Lower prices may also encourage some people who choose to go without insurance to see more value in it.

If private insurance becomes more affordable, Medicaid can better serve fewer patients.

The SustiNet plan to expand government-run insurance will do the opposite: it will take the focus away from serving those most in need.

* * *

At the end of the legislative session, the General Assembly passed a piece of legislation called SustiNet, although it has a limited relationship to the earlier, more aggressive bills under the same name.

This year’s pseudo-SustiNet bill is a marketing tool for future legislation bearing the SustiNet brand.

Beware the people who, during the next legislative session, say that since this watered-down SustiNet did no harm, a more complete version should be passed.

Zachary Janowski is an investigative reporter for the Yankee Institute for Public Policy, Connecticut’s free-market think tank. In 2010, he completed the Connecticut Health Foundation’s Health Leadership Fellows program. He publishes his work at www.RaisingHale.com.

About Zachary Janowski

Zachary Janowski is an investigative reporter for the Yankee Institute for Public Policy, Connecticut’s free-market think tank, and a 2012 Phillips Foundation Robert Novak Journalism Fellow writing about government’s contribution to the rising cost of healthcare. Learn more about Zachary here.

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