Connecticut’s state-run health insurance partnership for municipal workers paid nearly $22.6 million more in claims than it collected in premiums in the 2024-25 fiscal year, which ended June 30, according to a report from state Comptroller Sean Scanlon’s office released this week. The plan paid out nearly $731.4 million in total claims during the year, serving roughly 60,000 public-sector workers and their family members across 109 of the state’s 169 cities and towns. Scanlon attributed the shortfall to surging hospital service fees and medical inflation, which he said have pressured health plans nationally.
The deficit has renewed a partisan debate in Connecticut over government-run health programs, with Republican lawmakers citing it as a fiscal warning sign while Scanlon argues the plan remains sound over the long term.
Connecticut Comptroller Sean Scanlon’s office reported this week that the state’s public-sector health insurance partnership paid nearly $22.6 million more in claims than it collected in premiums in the 2024-25 fiscal year, which ended June 30.
The Connecticut Partnership Plan paid out nearly $731.4 million in total claims over the year, serving roughly 60,000 public-sector workers and their family members employed by municipalities and other non-state government entities. Of the state’s 169 cities and towns, 109 have at least a portion of their workers covered through the partnership.
Scanlon, a Guilford Democrat, attributed the shortfall to rising hospital service fees and medical inflation that have strained health plans nationally. “The partnership plan, like every other health plan in the United States of America, had a tough time last year,” he said.
He said the plan is not in financial distress. “I don’t view that as a harbinger of impending doom and crisis,” Scanlon said. “I view that as what’s happening to everybody is happening to us.”
Republicans raise alarms
The deficit drew a sharp response from Republican lawmakers in the General Assembly. Sen. Tony Hwang of Fairfield, the ranking Senate Republican on the Insurance and Real Estate Committee, and Senate Minority Leader Stephen Harding of Brookfield described the shortfall in a joint statement as “a precursor to universal, single-payer health care in Connecticut.”
Hwang and Harding also noted that state officials transferred nearly $40 million from an emergency federal COVID-relief grant into the partnership approximately five years ago to maintain program reserves. They questioned whether officials would continue supplementing the public plan with state funds rather than allowing private insurance to cover those workers — and whether additional state-sponsored health programs were forthcoming.
Scanlon dismissed the criticism. “I guess the clock struck 2026 and it’s campaign season, and the Senate Republicans are dusting off their playbook of old tropes and scare tactics,” he said.
Plan history and long-term performance
The Connecticut legislature created the partnership in 2015 to give municipal and other non-state public-sector workers an additional option for health coverage. The comptroller’s office administers the program and contracts with private companies to manage benefits.
In its first two fiscal years of operation, the plan paid $31 million more in claims than it received in premiums. Lawmakers responded by changing the premium-calculation process, triggering higher fees for many enrollees. Since those 2019 reforms took effect, premium collections have exceeded claim payments in four of the last six fiscal years, Scanlon said.
Cost pressures in the broader system
Hospitals have faced sustained cost pressure since the early years of the coronavirus outbreak in 2020 and 2021, when they were forced to raise wages to avert staff shortages while federal Medicaid and Medicare payments failed to keep pace with medical inflation, according to the American Hospital Association. Patient volumes and case complexity have also increased since the pandemic.
Scanlon said his office is working to offset rising costs, including steering participants toward generic prescription drugs where possible. “We’re not just accepting these increases as a fait accompli we can do nothing about,” he said.
The comptroller also cautioned that proposed federal health care funding cuts could worsen underlying cost pressures in coming years, as reduced Medicaid and Medicare reimbursements could limit Americans’ access to primary care physicians — compounding the forces already driving up claims.