February 14, 2012 | last updated June 1, 2012 12:35 pm

Health Foundation raises red flags on CT health exchange

The Universal Health Care Foundation on Tuesday raised fresh concerns about Connecticut's health insurance exchange including strongly cautioning the state against adopting the exchange currently run by the Connecticut Business & Industry Association.

The Foundation, which has been a strong advocate for a state-run health plan, also raised objections to the Health Insurance Exchange Board's lack of small business and consumer representatives and is looking for new seats to be added to the board.

Jill Zorn, a senior program officer at the Foundation, said in a written statement that legislation should be adopted that adds four new board members, including two consumers and two small business representatives.

Additionally, the UHCF also raised concerns about the recommendation by national benefits consulting firm Mercer, which was hired by the state to analyze the insurance market, that the Connecticut Business & Industry Association run the SHOP exchange for small businesses.

The federal health care reform law requires states to set up insurance exchanges by 2014 to serve as a marketplace for individuals and small employers to shop for health insurance coverage.

The mercer recommendation, which was first reported by the Hartford Business Journal, urged the state to consider leveraging CBIA's experience with its Health Connection's exchange by utilizing it as a statewide vehicle.

In its analysis, Mercer also warns that very few small employers, particularly those that don't receive government subsidies, will likely join an exchange run by the state because it won't offer products that aren't already available in the marketplace or that can provide a pricing advantage.

Foundation officials say there would be too many potential conflicts of interest if CBIA ran the exchange.

"It is unclear how CBIA could manage this conflict, given that the Health Connections program raises significant revenue as well as requires payment of dues to join CBIA," Zorn said.

The Foundation also raised concerns about CBIA's lobbying role, saying the business organization represents the state's private sector health care industry and has consistently opposed non-profit or public alternatives being added to the market.

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