1. SustiNet: Connecticut Health Reform in the Wake of Federal Action Universal Health Care Foundation of Connecticut Small Business Meeting April 12, 2010 Stan Dorn The Urban Institute

2. 2 Overview What is SustiNet? How would SustiNet work under national reform? SustiNet and small business

3. Part I What is SustiNet?

4. 4 The history of SustiNet Small business deeply involved in SustiNet’s genesis and development 2009 legislation SustiNet Board of Directors must issue:  5/30/10 report analyzing federal reform legislation  12/31/10 report proposing state legislation for 2011 SustiNet committees and task forces  Present recommendations by 7/1/2010 More than 150 volunteer experts now serving on SustiNet Board, committees, and task forces

5. 5 SustiNet’s basic idea The state can do a better job providing health coverage to people for whom the state is responsible  SustiNet: a self-insured plan that implements best practices for a 21 st -century health care system  Examples: incentives to promote health, implement IT, improve prevention, coordinate care for the chronically ill, etc. SustiNet becomes an option for individuals and employers to buy HUSKY and other subsidies cover the low- income uninsured

6. Part II How would SustiNet work under national reform?

7. 7 One possible approach Before 2014, SustiNet could be open to small firms In 2014 and later, SustiNet is one additional health plan option in the Exchange How does SustiNet differ from other plans?  Implements best practices for 21 st -century health care, using new resources available under national reform o Potential to lower premiums  Other features can be added to SustiNet o Multi-year contracts, for more predictability? o Transparency re: how premium dollars are spent? o Benefits affordable to small employers? o What else makes sense?

8. Part III SustiNet and small business

9. 9 The impact of adding SustiNet as an additional health plan option If SustiNet slows premium cost growth, private insurers may do likewise to preserve market share Applying to state-funded populations best practices for 21 st -century health care makes it easier to implement these reforms more broadly Other features can be built into SustiNet to help it serve small business more effectively and affordably SustiNet positions CT to benefit from new federal resources available under reform

10. 10 Short-term imperative: engage SustiNet Board and committees  Board member Joe McDonagh is a small business owner and insurance broker whose clients are small employers  For ongoing information, visit http://www.ct.gov/sustinethttp://www.ct.gov/sustinet Possible issues to raise  Offer SustiNet before 2014  Permit SustiNet to be sold through current channels that market to small firms (e.g., brokers, chambers of commerce, CBIA)  Design SustiNet to meet the needs of small firms A real challenge: getting good information

11. 11 Conclusion: overall effects of national and state reform on small business Disadvantages  If > 50 FTE employees, new costs for companies not offering health benefits  People earning > $250,000 (joint filers) pay more Medicare tax o But special protections for small-firm income Advantages  Most small firms that now offer coverage will be much better off o Lower premiums o Tax credits o Less administrative hassle  At small firms not offering coverage today: o Better ability to recruit and retain employees o Firm owners can get good insurance without discrimination against people with health problems  More entrepreneurs, since people who need insurance can leave jobs to start new companies