Some legislators have the perception this would create savings for a city or town so they could then lower property taxes, etc, However, facts tell us it will not really save. Why?
Connecticut’s Secretary, Office of Policy and Management, brought out in public testimony on the proposal that it included many problems.. He indicated: “We have not seen any data to back up the savings often claimed to be associated with this proposal.”
The American Academy of Actuaries in a Sept. 2006 Issue Brief concluded when employees of non related organizations are brought together theses groups tend to have higher claim costs.
This proposal will be seen as a way to achieve cost relief by organizations with high medical claim costs. They may achieve a one-time savings by enrolling but the proposal does nothing to address why their current medical treatment costs are high. It does however create adverse selection for the state employee plan and will thus increase plan costs. The big question becomes:
+ Who will make up the difference between the premium organizations pay, which are to be the same as the state employee plan, and the actual medical treatment costs this group of employees creates? The state employee plan? Taxpayers?
The bottom line on unrealistic proposals like this - state legislators have a responsibility to make decisions based on facts not perceptions.