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Research Questions

  1. How would reforms aimed at improving health insurance coverage and affordability in the individual market in Connecticut affect enrollment, premiums, consumer out-of-pocket spending, and the state budget?
  2. How would reforms aimed at enhancing employer insurance options in Connecticut affect enrollment, premiums, consumer out-of-pocket spending, and the state budget?
  3. How do the results differ by race, ethnicity, or income group?

Policymakers in Connecticut are considering various options to increase the affordability of insurance in the state, such as expansions to premium and cost-sharing reduction subsidies on the state's health insurance marketplace, as well as expanded plan offerings, including extending eligibility for the state employee health plan (SEHP) to other groups and a publicly contracted, privately operated plan (the public option plan) offered to individuals on the marketplace. The authors used the RAND Corporation's COMPARE microsimulation model to estimate the impacts of such policy options. For each policy scenario, they calculated enrollment, premiums, consumer spending, and state spending and considered whether the results differed by race, ethnicity, or income group.

The individual market reforms substantially increased affordability for people with incomes between 175 and 200 percent of the federal poverty level (FPL), reducing out-of-pocket spending as a share of income by 50 percent in some scenarios. Changes to affordability for higher-income groups were smaller, in part because the proposed policy changes for people with incomes between 200 and 400 percent of FPL were relatively modest and focused only on reducing cost-sharing (not premiums). New costs to the state for 2023 ranged from $19 million to $94 million, depending on the scenario.

All four SEHP specifications led to the same bottom-line conclusion that offering a SEHP plan would improve insurance coverage and affordability for those eligible for the plan. Expanding eligibility for the SEHP holds promise for stabilizing or reducing consumer costs, improving plan generosity, and bringing more people into the market.

Key Findings

The individual market reforms substantially increased affordability for some

  • The individual market reforms that were modeled substantially increased affordability for people with incomes between 175 and 200 percent of FPL.
  • These reforms reduced out-of-pocket spending as a share of income by 50 percent in some scenarios.
  • Changes to affordability for higher-income groups were smaller, in part because the proposed policy changes for people with incomes between 200 and 400 percent of FPL were relatively modest and focused only on reducing cost-sharing (not premiums).
  • New costs to the state for 2023 ranged from $19 million to $94 million, depending on the scenario.

Offering a plan similar to the SEHP would improve insurance coverage and affordability

  • There were minor differences between the four SEHP specifications, but they all led to the same bottom-line conclusion that offering a SEHP plan with higher actuarial value but lower administrative costs than typical employer-sponsored insurance would improve insurance coverage and affordability for those eligible for the plan.
  • Expanding eligibility for the SEHP holds promise for stabilizing or reducing consumer costs, improving plan generosity, and bringing more people into the market.
  • The cost of the SEHP plan was substantially lower than the cost of traditional employer coverage under current law, reflecting the lower administrative costs of these plans, despite the higher generosity.
  • The total number of uninsured individuals in the state fell by 3 to 4 percent across scenarios.
  • The four SEHP scenarios resulted in little to no effect on the state budget.

Research conducted by

This research was jointly funded by Arnold Ventures and the Commonwealth Fund and was carried out within the Payment, Cost, and Coverage Program in RAND Health Care.

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