Testimony of Lori J. Pelletier, Secretary-Treasurer, Connecticut AFL-CIO before the Insurance and Real Estate Committee

March 6, 2007

Good Afternoon Senator Crisco and Representative O’Connor and the Members of the Insurance and Real Estate Committee I am Lori Pelletier and I serve as Secretary-Treasurer of the Connecticut AFL-CIO, I am here on behalf of our 900 affiliated local unions from all across this great state who represent 211,000 working men and women, and I appreciate the opportunity to address this committee.

H.B. No. 7284 (RAISED) AN ACT ESTABLISHING THE STATE HEALTH INSURANCE PURCHASING POOL PROGRAM.

S.B. No. 1371 (RAISED) AN ACT ESTABLISHING THE CONNECTICUT SAVES HEALTH CARE PROGRAM.

Again I want to “Thank” this committee as well as the leadership in this General Assembly for the attention they have given to this issue of health care coverage. The affiliates of the Connecticut AFL-CIO at our convention last summer called on us to make Universal Health Care our top priority at this legislative session. Why? Because health care cost are out of control. Profits are skyrocketing, CEO pay is at an all time high and middle class families are caught in between.

In 1997 while working for Pratt & Whitney, I had excellent health care coverage thanks to my union’s efforts. No weekly deductible, no co-pays at the Doctor’s office and minimal prescription co-pays. I didn’t have to pay out of my pocket for MRI’s or X-Rays. All of these benefits were part of a negotiated plan. We gave back raises, and took pay freezes to keep these quality benefits. It was a trade off for both sides, and because most of the competition provided similar benefits it was negotiations between just our two parties. But today, because more often than not, workers do not have good, quality coverage, negotiations are rarely about the two parties. Instead it’s about a race to the bottom.

We keep hearing about this “Cadillac” health care plan that state employees have. The truth is when it was negotiated in 1997 it paled in comparison to the plan I had or many other private sector workers had. But because the Rowland administration offered a twenty year commitment on their health care plan, the State Employee Bargaining Agent Coalition (SEBAC) agreed to the offer. This race to the bottom is now pitting those who are covered under this SEBAC plan against those caught in the web of Insurance company profits which are driving up the cost of health care.

At your informational hearing early this year, the organization which represents health care plans admitted that by their estimates that their “administrative” costs are roughly 15% of every health care dollar. According to the Kaiser Family Foundation this cost is closer to 31%. Yet Medicare’s administrative costs are roughly 4%. So what we are looking at is an 11-27% in excessive expenditures.

This is again why the Connecticut AFL-CIO is so adamant about a single payer-Medicare for all type system. By eliminating the excess costs from our health care dollars, we can put more into care and caregivers without increasing the price tag. Health care decisions should be left to the consumer and their physician, not to a board of directors and Wall Street.

The current system is broken and broken badly. We need an overhaul not a Band-Aid. People are avoiding health care decisions, not because they aren’t getting sick, but because they can’t afford to pay for it. Then when they do finally seek treatment it is often in the emergency room where it is most expensive, instead of at your Doctor when the condition first arises.

For the past twenty five years the Connecticut AFL-CIO has supported a Single Payer health care system. Single payer comes from the fact that doctors and hospitals are paid by one organization: a single payer. By having only one payer, you can simplify the health care system enormously.

· Single payer saves lives because everyone has health insurance. According to the Institute of Medicine, 18,000 people die each year across this country just because they have NO HEALTH CARE coverage!

· Single payer saves time. If you were to accumulate all the time spent by doctors and hospitals on the infinite number of insurance forms (there are nearly 1500 separate insurance carriers nationwide), all that time could be spent on patients instead of paperwork.

· Single payer saves money because have only one organization handling all the administrative duties of this health care system greatly decreases the cost of that administration. Over 30% of every health care dollar goes to paperwork, overhead, CEO salaries, profits and other non-clinical costs. As compared to Medicare which operates at about 3%.

· Finally single payer is about choices. Within a single payer system, patients decide which doctor or hospital they want to utilize, instead of having to pick off a list provided by some HMO trying to make a profit off of the sick and injured. Patients would also be covered even if they lose their job or are starting their own business. Workers wouldn’t be stuck in a job because it provides health care coverage.

Health care costs are responsible for nearly 50% of all bankruptcies filed in the U.S. today, and four out of ten adults under 65 have problems related to medical bills or debt according to research done by the Kaiser Family foundation. Billions of dollars are spent annually on health care yet millions of Americans and nearly 400,000 Connecticut residents are without health care coverage, according to a Families USA Report. The current crisis in our health care system needs to be addressed immediately. The longer we wait the harder it will be to correct the problems. Connecticut residents deserve better and single payer is the answer.

I want to Thank the Committee for their time this afternoon and would be glad to answer any questions you may have.