Insurance companies in Connecticut would be prohibited from raising rates on health care plans offered to state workers if the coverage is extended to municipalities, small businesses and nonprofit agencies, Attorney General Richard Blumenthal said Tuesday.

In a written opinion, Blumenthal said legislation approved this year by the General Assembly would not affect pending contracts with Anthem Blue Cross and Blue Shield, United Healthcare and Health Net.

The newly enrolled members would constitute a separate pool of workers covered by new contracts, not become part of the state worker pool already covered by the three legally binding contracts, he said.

"There is no legal or practical reason to veto this legislation because of an unfounded fear of legally untenable charges," said Blumenthal, who favors the proposal and says it offers a chance for small businesses, nonprofit agencies and municipalities to cut health care costs without adding to their financial burdens.

Blumenthal issued the opinion at the request of House Majority Leader Christopher Donovan, one of the bill's leading proponents.

The General Assembly approved the measure this month over the concerns of insurers, the Connecticut Business and Industry Association and others who think it will drive up costs.

The state had negotiated a new 2008-09 agreement with the insurers that included at least $54 million in savings. However, the insurers have said they must recalculate those rates if the bill becomes law.

Blumenthal said contracts for policies covering the new and existing pools could be bid together in the future, but that they would be legally and financially separate until then.

Eric George, general counsel for the Connecticut Business and Industry Association, said Tuesday that the measure would lock small businesses into three-year coverage periods and prevent them from taking advantage of lower rates elsewhere.

Blumenthal's description of separate groups with equal coverage _ rather than an opportunity for newcomers to join the pool of existing members _ also contradicts the way the bill was described by its supporters, George said.

"That's not how it was sold during the legislative process," George said. "We're still urging the governor to veto this. This doesn't change anything, for the fact remains that this is operating outside our insurance laws."

Proponents say having a larger pool of insured people will drive down health insurance expenses. About 200,000 to 250,000 people are currently covered. Twenty-four other states, including Massachusetts, have similar systems.