* Connecticut plan could be in place by 2012

* Critics say it’s too expensive at $1 billion a year

HARTFORD, Conn., July 22 (Reuters) - Lawmakers in Connecticut are moving ahead with plans for universal healthcare in the absence of federal legislation, following the lead of a pioneering law in neighboring Massachusetts.

As the Obama administration and Democratic leaders in the U.S. Congress struggle to find support for a plan to extend healthcare to millions of Americans, Connecticut is one of a handful of states seeking to go it alone and reverse a trend that has left more than 47 million Americans uninsured.

The Democratic-controlled legislature overrode a veto by Republican Governor Jodi Rell on Monday to create a nine-member board to craft a universal healthcare system.

The board will make recommendations to lawmakers by Jan. 1, 2011, on a healthcare plan called SustiNet that will cover nearly all of Connecticut’s 3.5 million people, including an estimated 350,000 in the state without coverage.

Democrats hold veto-proof, two-thirds majorities in the state’s House of Representatives and Senate and voted along strict party lines to pass the SustiNet bill.

Massachusetts passed a first-in-the-nation law in 2006 that makes health coverage mandatory, bringing it within reach of poorer people through subsidies and industry reforms. Other states are also moving ahead with reforms, including Vermont and Maine, as Massachusetts struggles to pay for its law.

Connecticut’s system will be built around a large health insurance pool in which state employees are pooled together with participants in Medicaid, the joint federal-state health insurance program for the poor and elderly.

That pool would then be expanded to include private employers and people without health insurance who would be offered the same health benefits available to state government workers. Any state resident can join, regardless of health.

Specific details, including how it will be funded, are to be determined. It is scheduled to begin on July 1, 2012.

COST CONCERNS

Backers contend it would drive down costs by covering primary care treatment for patients, reducing the need for expensive emergency room care. Critics say it’s too costly, would sink the state deeper into debt and shatter the state health insurance industry, a mainstay of the state economy.

The bill itself does not mandate health insurance for all citizens, as Massachusetts does, but instead directs those designing the law to explore whether such a mandate is needed. The panel would also create task forces addressing obesity, tobacco use and the number of healthcare workers.

Governor Rell said she vetoed it because of concerns over cost, estimating it will require $1 billion a year. The state has been without a budget since July 1 and projects a $8.9 billion deficit over the next two fiscal years.

“The Democrats in the legislature have not passed a biennial budget yet they have approved a new, $1 billion spending program without providing a way to pay for it,” said Rell. “The simple fact is that the families and employers of Connecticut cannot afford the new taxes that will be required by this new program,” she added.

Universal Health Care Foundation, a Connecticut non-profit group, said at least 325,000 people in the state lack health insurance coverage. “Under SustiNet, we do anticipate affordable public health insurance options starting in 2012,” said its president, Juan Figueroa. He said a goal is to cover 98 percent of the state’s population by 2014.