A recent study on economic impact of Connecticut-based health plans indicates they have a significant influence on the state’s economic health. The health plans – all household names in Connecticut – provide $15 billion a year in positive economic output, according to a study by the Connecticut Economic Resource Center (CERC).
Economic activity generated by the health plans - Aetna, Anthem, Cigna, ConnectiCare, Harvard Pilgrim, and United – are reflected, first and foremost, in employment. The companies employ more than 17,000 employees directly and support another 31,000 indirectly in Connecticut, for a total of 48,000 jobs.
More than $11.2 billion of the economic output was generated by the health insurance industry in Connecticut - including activity by health insurance carriers, agencies, and brokerages in Connecticut as well as in-state insurance work such as claims adjustment. The health insurance industry also generated almost $4.3 billion through independent secondary activities, according to CERC’s preliminary analysis.
The industry is highlighting the data in the waning weeks of the legislative session, expressing concerns about proposed legislation that would establish a public health insurance option for the first time. A new proposal was unveiled by legislators on Thursday.
“The study proves how important health plans are to Hartford remaining the insurance capital of the world. As a state, we need to stay competitive and support the growth of the industry here, which includes pushing back against legislation that says government run insurance is a better model,” said Steve Jewett, a West Hartford homeowner, a former health executive, and spokesperson for the coalition Insurance Matters to CT. “The region’s economy, housing prices, and vitality are all dependent on a healthy local insurance workforce.”
The Connecticut Business and Industry Association (CBIA) and the Connecticut Retail Merchants Association (CRMA) also raised concerns regarding the public option proposal now being considered at the State Capitol.
“A public option poses a significant risk to Connecticut's economy, including the loss of 5,000 private sector jobs and $1.6 billion in annual economic output," said CBIA president and CEO Joe Brennan. "That's not a risk worth taking for a state-run healthcare program that will neither lower premium costs nor improve the quality of care while further burdening taxpayers and small businesses.”
“Big anchor companies support the eco-system of small business and retailers. When they get downsized, we feel the impact too. We need to create a business environment where the health plans choose to grow here and not in other parts of the country. They have operations throughout the US and global footprints, they have choices,” said Tim Phelan, President of the Connecticut Retail Merchants Association.
The preliminary report pointed out that the “health insurance industry remains in a state of change due to national and state-level policy and technology changes,” adding that “If the health insurance industry were to decline in Connecticut, it will have an impact on overall output, value added, labor income, and the number of jobs in Connecticut.”
The Insurance Matters to CT coalition includes insurance industry leaders and business and municipal organizations throughout the state. They include: Aetna, America’s Health Insurance Plans (AHIP), Anthem, Chamber Insurance Trust, Cigna, ConnectiCare, Connecticut Association of Health Plans, Connecticut Business & Industry Association, Connecticut Council of Small Towns (COST), Connecticut Restaurant Association, Connecticut Retail Merchants Association, CT River Valley Chamber of Commerce, Greater Danbury Chamber of Commerce, Greater New Haven Chamber of Commerce, Hartford Chamber of Commerce, Harvard Pilgrim Health Care, Insurance Association of CT (IAC), Middlesex County Chamber of Commerce, National Association of Health Underwriters – CT Chapter, Northeastern Connecticut Chamber of Commerce, Northwest CT Chamber of Commerce, UnitedHealthcare, and Windham Region Chamber of Commerce.
The study by CERC uses the IMPLAN economic impact method. For this study, economic output measures the value of production by a business or industry, including total sales and inventory changes. CERC is a nonprofit corporation and public-private partnership that drives economic development in Connecticut by providing research-based data, planning and implementation strategies to foster business formation, recruitment and growth. The full report, which is to include additional data, is to be released shortly, officials indicated.