Cost cap project sets limits on healthcare spending without public input, ignoring pandemic impact

Print Friendly, PDF & Email

In meetings of the committee setting limits on healthcare spending for all Connecticut residents, it appears the advocates’ sign on letter and detailed concerns about the Office of Health Strategy’s (OHS’s) Cost Cap project were not heard. The plan is being developed by a Technical Advisory Team, with members chosen only by OHS, including some with conflicts of interest. OHS and their consultants, Bailit, are continuing to rush ahead to have the cap plan out next month. Despite historic disruptions to healthcare spending due to the pandemic, they intend to use 2020’s healthcare costs as the base for calculating allowed future healthcare costs.

At their last meeting, the group chose to limit increases in Connecticut per capita healthcare spending at levels well below other states. If the OHS cost cap had been in place in the past, it would have forced severe cuts to healthcare in Connecticut.

OHS aggregate caps on per capita healthcare cost increases:

  • 3.1% next year
  • 3.0% in 2022
  • 2.9% in 2023
  • 2.8% in 2024
  • 2.7% in 2025

According to OHS’s consultants, per capita healthcare costs are growing more slowly in Connecticut than any of the other states considering a cost cap. Connecticut Medicaid’s per capita costs are exceptionally low, growing only 0.3% annually on average for the last seven years. Commercial per capita costs rose either 3.9% or 6.6% annually depending on how you measure it.

The Technical Team considered how to “market” the cap to the public by choosing a metric that can be defended. None of the economic metrics used to define the cap was designed for this purpose and an unrealistically low cap may have serious unintended consequences.

Advocates raised concerns about the Cost Cap causing cuts to necessary care for Connecticut residents. There has been no consideration of monitoring for harm when the cap is applied. When the Technical Team considered including triggers for future reconsideration of the cost cap, only economic triggers were considered. No one in the meeting, staff or members, mentioned reconsidering the cap if there is evidence of harm to people.

Since 1991, the methodology for Connecticut’s analogous state budget spending cap has been revised often to allow policymakers to spend on important priorities and mitigate undue harm to state residents.

Advocates have been concerned that public input is not being considered in developing the cap. OHS and Bailit stated at an earlier meeting that the only outside input beyond the Technical Team in developing the proposal will be through OHS’s Stakeholder Advisory Committee, also with membership chosen only by OHS, mirroring the failed SIM project. Although it is not related to the COVID public health emergency, the Cost Cap project was created by the administration under an Executive Order with no legislative action.