HARTFORD – The Connecticut version of Obamacare called SustiNet could add more than $2 billion in new annual spending to the state budget with no means to pay for it, a new study by the Yankee Institute finds.

Dr. SustiNet’s Prescription for Big Government Healthcare” rings the alarm about how much the ambitious government-driven heath care plan passed over Gov. M. Jodi Rell’s veto in 2009 is likely to cost Connecticut taxpayers. The report finds SustiNet’s backers significantly overstated the number of uninsured in Connecticut, dramatically understated the likely costs of SustiNet, and ignored many of the effort’s likely negative side effects.

Highlights of the report:

• Connecticut spends $4.1 billion a year on its existing taxpayer-funded state health care
programs, including Medicaid and three state health insurance programs
• SustiNet will cost Connecticut taxpayers at least $2 billion more in new, annual government
• 90 percent of Connecticut residents have insurance coverage.
• Of the 343,000 people who do not have health insurance, most are either eligible for existing
government-sponsored health insurance programs, can afford some form of health insurance and choose to forego it, or are only temporarily without coverage.
• SustiNet underestimates the cost of expanding the HUSKY program; understates the cost of subsidizing insurance; ignores the tendency of taxpayer-subsidized insurance plans to cause those with existing private insurance to switch to government plans; and ignores “adverse selection,” by which new enrollees have higher medical expenses than current enrollees.
• SustiNet’s unpleasant side effects will include higher taxes, reduced employment, longer waits, higher costs, fewer choices, and rationing.

“Connecticut residents who are worried about the big government health care bills being debated in Washington should be just as concerned about SustiNet,” said Fergus Cullen, executive director of the Yankee Institute. “SustiNet is to the Connecticut health care system what Obamacare is to the national health care system. Given Connecticut’s existing budget deficit, it is not realistic to believe the state can afford SustiNet as envisioned by its backers. State officials should revisit the whole idea of SustiNet before it’s too late,” Cullen said.

Cullen emphasizes that the Yankee Institute supports SustiNet’s stated goals of increasing coverage and lowering costs, but the report argues that there are market-based alternatives to SustiNet’s big government approach to health insurance change that can achieve some of SustiNet’s stated goals at a fraction of its likely costs. These include:

• Allowing Connecticut residents to purchase health insurance across state lines
• Relaxing Scope of Practice and Certificate of Need laws that artificially limit supply and drive
up costs
• Reforming existing state health insurance programs

Download the full report now.


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