Another Government Run Health Care Experiment, Another Failure

Like Connecticut’s Partnership Plan 2.0 and State Employee Health Plan, New Jersey System Deep in the Red, Shifting Burden to Taxpayers

HARTFORD, Conn. – The evidence is mounting that government-controlled health care systems do not work, and Connecticut policymakers must reject any proposals to create, or expand, such systems.

Nearby New Jersey provides the latest case study underscoring that government-controlled systems produce unfulfilled promises and unsustainable costs. According to POLITICO, the local government portion of New Jersey’s State Health Benefits Program — which provides coverage to public-sector workers, retirees and their dependents like Connecticut’s partnership plan — still owes taxpayers $120 million after borrowing from the state health benefits fund. The local plan has repaid just $30 million, and as of May 31 had only $99 million on hand.

The loan was created to help the financially struggling local government health plan continue covering expenses. But this short-term fix has not solved the underlying affordability problem. Premiums for the local plan increased by approximately 36 percent this year, with the cost of loan repayment factored into the rate increase.

Now, state leaders are weighing loan forgiveness in exchange for long-term reforms. But forgiving the loan would not erase the program’s cost. It would simply shift the burden elsewhere — onto the state fund, taxpayers, public employers, workers or future budgets.

Connecticut is facing a similar reality: when government-controlled health care systems spend more than they collect, the financial burden often falls on taxpayers.

According to a January 2026 story in the CT Mirror, the Connecticut Partnership Plan 2.0, a state-government-administered plan that certain public or quasi-public entities, such as municipal governments, can elect to participate in, paid out almost $23 million more in claims than it collected in member premiums in the last fiscal year. In its first two fiscal years of operation, the plan paid out $31 million more for claims than it received in premiums.

Connecticut’s state employee health plan has also been in poor financial health, and helped push Connecticut over its FY2025 budget, with CT Insider noting that “higher costs for Medicaid coverage and state employee and retiree benefits account for significant portions” of the anticipated budget overruns.

When government-administered health plans are underfunded, underpriced or financially strained, the costs do not disappear. They reappear as debt, premium hikes, taxpayer exposure, cuts to provider reimbursement and pressure for state bailouts.

Connecticut lawmakers have previously considered public option proposals that would have expanded government control over health coverage through state-administered systems, including the state employee health plan or Partnership Plan 2.0. Supporters of these proposals often claim they would be self-sustaining through premiums. The experience of Connecticut’s existing state government-controlled health care systems, New Jersey’s experience and the results of public option models in other states all demonstrate that this promise would be false.

According to a recent KNG Health study, implementing of a public option could reduce revenue from premium taxes and health insurance assessments, which help fund critical state services, by between $44.5 million and $1.1 billion from 2026 to 2035.

New Jersey’s experiences are a reminder that there is no successful public option in any state in the nation. This one-size-fits-all system has failed in the states where it has been tried – raising costs for residents, threatening access to care, and limiting coverage choices. Creating the same unaffordable new state government health insurance system in Connecticut would jeopardize patients’ access to the affordable coverage and high-quality care they need and deserve.

The lesson is clear: government-controlled health care systems do not reduce costs. They raise them — often leaving workers, providers and taxpayers to pay the price.

Connecticut should avoid that path.

Read the full POLITICO coverage on the shortfall in the New Jersey system HERE.