Connecticut”™s largest business organization is calling for an independent audit of the state-run health care plan for municipal employees.
The CBIA”™s announcement follows the release earlier this month of a report produced by the insurance agency Brown & Brown that raises what the association terms “serious questions about the Connecticut Partnership Plan”™s fiscal performance and outlook.”
The plan is administered by Comptroller Kevin Lembo, who is also an advocate of legislation implementing a public option health care plan that is largely modeled on the state-run municipal plan.
In letters emailed Feb. 24 to CBIA president and CEO Chris DiPentima and assistant counsel Wyatt Bosworth, Lembo challenged the testimony Bosworth shared with a legislative subcommittee and an article posted on the organization”™s website Feb. 18.
“It is incumbent on policymakers to address the significant questions surrounding the state-run municipal plan”™s fiscal outlook and solvency status, given that it is the model for the public option legislation,” DiPentima said today.
“As a proponent of transparency and open government, we are sure the comptroller can appreciate the public”™s interest in a full accounting of the plan and its operations and will support our call for a fully independent audit,” he continued. “That audit should be reviewed and approved by a certified actuary who is a member of the American Academy of Actuaries. We make this request in the interests of sound public policy.”
Bosworth”™s testimony before an Appropriations Committee subcommittee Feb. 22 was based on Brown & Brown”™s detailed analysis of the municipal plan. Some of the agency”™s clients are public entities covered by the plan.
The Brown & Brown report, released Feb. 12, utilized underwriting projections that “raise some concerns regarding the adequacy of the premiums being collected versus the claims being paid out.”
Brown & Brown estimates that a total of $519 million in premiums will be collected by the partnership plan in 2020-2021.
However, the report says that total premiums needed to cover claims and fixed costs for fiscal 2022 are projected at $616 million — a shortfall of $96.4 million.
The Brown & Brown report notes the plan”™s annual premiums need to increase 18.57% to cover the projected deficit. The comptroller”™s office has released a preliminary premium increase of 3% for next fiscal year.
Last year, the agency reported that the partnership plan lost $31.9 million in fiscal 2019, more than triple the $10.1 million in losses recorded the previous year.
In his letter to Bosworth, Lembo disputed the Brown & Brown analysis, claiming Bosworth”™s testimony had “many erroneous statistics and inaccurate information.”
The comptroller asked Bosworth to submit corrections to the Appropriations Committee, “and that CBIA should inform its members that the post on its website is also wrong to stop the spread of further misinformation.”
In a Feb. 25 response to Lembo, Bosworth wrote: “After careful consideration of your allegations and an additional review of the Brown & Brown report, which formed the basis of my testimony and web post, CBIA remains confident in the accuracy and substance of the information we presented.”
DiPentima said CBIA works diligently to ensure the credibility of the information it provides to its thousands of member companies, the legislature, the media, and the general public.
“We may disagree from time to time with members of the legislature and administration on policy issues, but we firmly believe that collaborating with open, honest discussions leads to the best outcomes for Connecticut and the state”™s residents,” he said.
“We trust that the comptroller will support our call to open the books on the state partnership plan,” he added, “and we would welcome an opportunity to work with him and other stakeholders to address the major issue of health care costs.
“We can — and we have to — lower the cost of health care. We are proposing viable alternative solutions that deserve further discussion,” DiPentima concluded.
Lembo”™s office did not have an immediate comment.
