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CT Government Weekly Rundown - August 18

  • Aug 18, 2013
  • by Alexandra Forrester
CT Government Weekly Rundown - August 18

Access Health Launches Informational Campaign Amidst Concerns Over Rates
Your next beach day might have you taking home more than sand and a tan as representatives from Access Health, Connecticut’s Public Health Exchange, plan to hit the shoreline the next three weekends to distribute information about the exchange.  Access Health is also holding Q&A sessions around the state.   

Public health exchanges are government-managed markets where private companies and non-for-profits cansell health insurance plans that meet certain patient acceptance, coverage, and rate criteria. The 2010 U.S. Affordable Care Act (often known as “Obamacare”) requires each state to establish an exchange by 2014, but leaves it to states to set their own regulations.  The goal of these exchanges is to create more standardized, transparent, and competitive insurance markets where consumers can easily access, understand, and compare coverage information across plans.  Connecticut’s exchange is controlled by a board in which eight of twelve voting members are appointed by the Governor and legislative leaders. 

On August 5 insurance giant Aetna announced it would not participate in Connecticut’s exchange for individual plans because it felt the premiums Access Health was requiring were too low to cover costs.  A few weeks earlier ConnectiCare withdrew its application to sell small business health insurance on the exchange.  These announcements have lead some to question whether there are enough participants in the exchange to constitute a competitive market.  On August 5 Access Health announced premium rates for remaining participants.  It appears that aggregate premiums will be higher than pre-reform rates, but on an individual basis the comparative cost will vary based on location, gender, age, and plan type. Several employers have complained that employees are being asked to decide whether to join the exchange with minimal information and that employers are not in a position to effectively answer their questions.

What It Means For You: It remains up in the air whether Access Health will meet its goal of being more consumer friendly and cost-competitive than the existing insurance market. Initially, using the system may be troublesome—only 3% of users are expected to enroll without assistance as the exchange works out administrative and technological kinks.

Concerns over State Budget & Fiscal Climate as CT Goes to Bond Markets
On Wednesday, August 14, Connecticut issued $500M in new bonds. A bond is the state’s version of a credit card.  The state borrows money now, but it has to repay that money later – with interest.  Like a person, states that borrow to spend more than they can afford eventually run into trouble. In recent bond sales, Connecticut has had to pay a higher interest rate than states with good credit ratings, and a series of recently released financial and policy analyses suggest that more trouble is on the way.  Fitch Ratings and Connecticut Voices for Children are just the latest organizations – including the CPI – to criticize the state for raising taxes, failing to spend responsibly, and claiming the budget is balanced even though $600 million of expenses are being paid on credit and another $400m through accounting slights of hand. Connecticut already spends $1.2 billion per year on debt interest and its per capita debt is one of the highest in the country. Connecticut's high taxes, large debt, and ongoing deficits were identified as drivers of the state’s lackluster economic performance in both a recent Forbes profile on Connecticut and a presentation by John Rathgeber, Connecticut Business & Industry Association CEO, at an Aug. 6 CPI forum.

What It Means For You: If Connecticut does not get its fiscal house in order, the government will have to cut services, raise taxes yet again, or both.  This means less money in your pocket and fewer benefits back to you from your tax dollars.  And if businesses remain concerned about the state’s fiscal outlook they will be less likely to come to, or expand in, the state. That means fewer job opportunities for state residents.

Department of Labor Releases July 2013 Jobs Numbers
Speaking of jobs, the Department of Labor on Friday released the July results of its monthly employment surveys of Connecticut employers and residents.  The employer survey showed the state’s “nonfarm payrolls” increasing by 11,500 in July – the largest single-month increase since May 2010 and a larger increase than the previous six months combined.  With the July bump Connecticut’s 2013 nonfarm payroll growth rate is now roughly equal to that of the country as a whole.  The Department of Labor’s survey of Connecticut residents paints a more concerning picture.  Even with a slight increase in July, Connecticut has 10,600 fewer residents employed today than at the beginning of the year, continuing a trend from 2012.    

What It Means For You: Connecticut’s economy has performed slightly better in the first seven months of 2013 than it did in 2012, though this says more about the state’s dismal 2012 than it does about economic performance this year.  The next six months will shed light on whether the July jobs report is a statistical outlier or indicative of meaningful long-term trends.  In the last year Connecticut has seen other strong jobs reports, only to have them followed by weak ones. 

Department of Education Releases 2013 Connecticut Mastery Test Results
The Connecticut Department of Education released the state’s 2013 Connecticut Mastery Test (CMT) results this week, and overall student achievement decreased in every academic subject tested for grades 3 through 8. Education Commissioner Stephen Pryor blamed the decrease on the state’s transition to the Common Core Curriculum, noting the CMT is aligned to previous curricula.  Other states have also seen a drop in test scores as a result of the transition to the Common Core, though in most of those states the tests themselves have changed.  Connecticut’s drop in scores occurred on the same metric measured in previous years.  Pryor also noted substantial improvement in student achievement at the four Commissioner’s Network schools – the schools with the worst scores that were taken over by the state as part of the 2012 education reform package.  The limited scope of this improvement, together with the state’s overall decline in scores, may indicate, as CPI has previously noted, that while last years' reforms included some positive steps the core structural problems with CT public education that are impeding low income students’ access to high quality opportunities remain unaddressed.

What It Means For You: Improving Connecticut’s underperforming public schools remains one of the paramount policy challenges facing the state.

About the Author: Alexandra Forrester is a a CPI policy analyst.