Testimony on SB 1004: AAC Public Insurance Options for Small Business Employees Insurance and Real Estate Committee

Insurance and Real Estate Committee

March 12, 2019

Submitted By: Stephen Wanczyk-Karp, LMSW

On behalf of the National Association of Social Workers, CT Chapter representing over 2500 members, NASW/CT is in support of SB 1004. Much is spoken about helping small businesses but very little is done. SB 1004 is an exception.

 Health care is a right, not a privilege, yet due to the continuing high costs for coverage far too many residents of Connecticut still cannot afford quality coverage at an affordable cost. This is particularly a problem for employees in small businesses or in solo businesses where having an employer who offers comprehensive insurance coverage is unlikely.

SB 1004 offers an option for small businesses to acquire quality health care at a more affordable rate than can be found in the private marketplace. With the negotiating power of the State Comptroller, lower out of pocket costs to employees of small businesses will be possible

As an Association that represents social workers many of our members work in small non-profits or have their own private practice. I hear from these social workers who contact us seeking to find out if NASW has health insurance coverage for members. Unfortunately, NASW cannot offer a national plan, so I can only suggest they see if they are eligible under the Municipal Employees Health Insurance Plan (MEHIP) or they can contact an independent insurance broker. Neither MEHIP or a broker is a satisfactory answer as the options through these avenues are limited and still unaffordable for comprehensive coverage. It is ironic that a number of our members, who are health care providers, cannot afford high quality health coverage.

Until 2.5 years ago, NASW/CT was in the small business health insurance market. I know from personal experience how hard it is to find coverage, how limited the choices are and how expensive it is to provide our employees with good coverage. During the first 25 years as the executive director I struggled every year with premium increases that often were double digit. We increased co-pays, passed a percentage of the premium onto the employee, eventually dropped dental coverage in order to afford the medical coverage, limited salary increases, and even reduced staff hours (though I had enough work to expand staffing if I could have afforded it). In 2017 the National Office of NASW “nationalized” all staff and we now are covered through a national plan.

Rate increases in the small group market in some cases rise into the double digits.This cost increase has led to an increase in the already troubling trend of employers shifting costs to employees by increasing co-pays and deductibles, plus switching to plans with more restrictive coverage. Compare this to the state employees’ value-based insurance design since 2011, where the state employee plan has seen a low single digit rate increase. Such a positive step in cost containment will be replicable for small businesses under SB 1004.

A significant portion of workers are employed in small businesses. We as social workers often see these workers who are struggling to make ends meet. Having a lack of affordable health coverage adds to the financial stress of such clients. It is not only a financial stress, it is a psychosocial stress of fearing what will happen if a serious health care need occurs. How will one pay for necessary care? What other costs will have to go unpaid? For parents the pressure of having an ill child when you do not have the means to pay for doctors, prescriptions and other care, can lead to anxiety, difficulty with family relations, and even depression. These are the hidden social costs that rarely are discussed in this debate. They are real costs with ramifications that go beyond simply health insurance coverage, with negative impacts that ripple into many non-medical aspects of life. As social workers we know that “life can change in a second” and when that change is a health crisis and comprehensive health insurance is unavailable, the results of that change can be devastating.

By offering a public option to small businesses SB 1004 will not only offer affordable options for health coverage, it may also have a positive effect on the private small business insurance market. Under our economic system competition is commonly viewed as a way to increase innovation and reduce costs. Those in the private sector that profess to believe in our economic system should support a competitive marketplace. Clearly, small businesses owners and employees will benefit from increased options and greater choice for health insurance coverage.

NASW/CT strongly urges passage of SB 1004 as a positive step in addressing the health insurance coverage needs for small businesses.

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