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Murphy Pitches “Medicare Buy-In” … Would it Kill State’s Insurance Industry?

April 19, 2018 By Staff
Murphy Pitches “Medicare Buy-In” … Would it Kill State’s Insurance Industry?

The junior senator and possible 2020 presidential candidate wants Medicare to compete with private health insurance. Connecticut's insurance industry remains vital to the state.

On Wednesday, Sen. Chris Murphy (D-CT) introduced a ‘Medicare buy-in’ bill that, if passed, would have a version of Medicare compete with private health insurance plans for coverage.

Murphy made it clear in his statement that he believes Medicare can beat private insurance options in the market.

“Our belief is that the Medicare plan will be the most affordable and the most efficient, but we can’t know that unless everyone is given the choice to purchase a Medicare plan.”

This is not too surprising, given the government could theoretically set premiums lower than the private market, since it doesn’t have to worry as much as a company about running a deficit.

But some pointed out – including Twitter user @CTIronman – that Medicare ‘beating’ private insurance would have a serious negative impact on the insurance industry, one of Connecticut’s most important.

Indeed, Connecticut’s own state government website points out that the state is “the Insurance Capital of the World.”

Connecticut is 1st in the U.S. for actuaries per capita and 1st in the U.S. for insurance employees per capita. (Bureau of Labor Statistics, 2015; Moody’s Analytics)

…Insurance and financial services accounts for nearly one-fifth of Connecticut’s Gross State Product. (2016 Connecticut Insurance Market Brief)

And a 2017 PwC analysis of Connecticut’s insurance industry found that insurance carriers made up 2.5 percent of Connecticut’s employment in 2016, and over five percent of the state’s 2016 payroll – much higher than the U.S. averages of under one percent and just over one percent, respectively.

Could Murphy’s 2020 presidential play actually kill one of the most vital industries to the state of Connecticut? It’s the clearest indication yet the junior senator could abandon the state’s workers in order to win a Democratic presidential primary.