HARTFORD, CT — Government-sponsored public health insurance options are getting a hard look this year from the Connecticut General Assembly.
Fresh off the campaign trail, lawmakers both new and seasoned were bombarded by constituents who want to see them make health insurance more affordable.
Frances Padilla, president of the Universal Healthcare Foundation, isn’t surprised. A 2018 survey sponsored by her organization found 50 percent of adults experience a problem with health affordability in the last year and 62 percent who receive health insurance through their employer worry they will not be able to afford it.
Yale Professor Jacob Hacker, the father of the public option, said there are a number of ways Connecticut could achieve a public option — by building one or using a buy-in method.
In Connecticut, Medicaid or the state employee plan managed by state Comptroller Kevin Lembo, could provide the framework for a buy-in option, or one could be built from scratch.
All those options present challenges for lawmakers looking to make insurance more affordable.
Hacker warned that the alternatives to the public option when the Affordable Care Act was created were the Consumer Operated and Oriented Plans, most of which have folded. The co-op plans were new in 2014 and struggled to build their network of medical providers.
Connecticut’s co-op, HealthyCT, was in business for two years before it folded.
Cindy Mann, a partner at Manatt Health and who previously worked at the Centers for Medicare and Medicaid Services, said New Mexico, Delaware, Massachusetts, and Oregon have all completed buy-in studies. She said other states like Minnesota, California, Washington, Illinois, Nevada, Colorado, and Pennsylvania are also looking at buy-in options.
Mann, who has been working closely with New Mexico, said that state is looking to provide more affordable coverage to residents who don’t qualify for federal subsidies on the exchange.
In Connecticut, about 29 percent of the more than 109,000 residents who signed up for coverage on the exchange this year don’t receive subsidies to lower the cost of their monthly premiums. Premiums for that group went up significantly between 2018 and 2019 and caused some residents to make the decision to go without health insurance or buy down to a plan with less coverage.
Mann said Connecticut would have to decide whether to offer its public option on the exchange and would have to weigh how that might impact the two private health insurance companies currently participating in that space.
She said the idea of a buy-in is to take a program the state is already administering to come up with a product that is less costly than the standard commercial product.
Lembo, the former state Healthcare Advocate, has been thinking a lot about how Connecticut can use the state employees health insurance pool he administers as an option. Connecticut might now be able to open up the pool to everyone, but it may be able to expand the pool to cover more people and lower the cost of insurance.
Lembo said about half of Connecticut’s workforce is employed by small businesses and in order to attract new workers these small employers need to offer some incentive.
So there’s a question about whether Connecticut can take the 190,000 lives it covers in the state employees health plan and make opportunity available for small businesses, Lembo said.
Sen. Christine Cohen, D-Guilford, and Sen. Alex Bergstein, D-Greenwich, have proposed legislation that would allow small businesses to join the state employees health insurance pool.
Lembo said the short answer is that Connecticut can do that, but there’s still a lot to consider.
He said the “screaming” will happen when the details of what that plan looks like are being discussed.
One of his initial concerns was the Connecticut’s plan would also lose its federal ERISA protections if they added small businesses to the pool.
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However, he said that the more he thinks about it, the less concerned he is about the idea. It opens the plan up to litigation from plan beneficiaries, but that is true of every insurance plan in the state and “they’re able to manage it. I think we can too,” Lembo said.
“I think it is the will of the people that we do something,” Lembo said.
Rep. Art O’Neill, R-Southbury, one of only two Republican lawmakers who sat through the informational hearing Wednesday, asked what the risk was to the state if it opened up the pool.
“When I look at the generic risk profile of small employers and their employees, they actually look similar to us in many ways,” Lembo said. “They’re going to track in a similar way.”
Lembo said he would oppose any legislation that allowed individuals from the individual marketplace to the join that state employees health insurance pool this year at the same time as small businesses.
“We don’t want to be the place that risk goes to get what they need,” Lembo added.
Older and sicker populations bring more risk, when discussing health insurance.
Healthcare Advocate Ted Doolittle, who worked for the Centers for Medicare and Medicaid Services, was quick to remind lawmakers that there is no government-run healthcare system in America.
“I don’t view this as a war between the government and the private sector,” Doolittle said.
He said just like the Navy doesn’t build its submarines — Electric Boat does. “Private industry delivers Medicare,” Doolittle said.
He said that includes Medicare, which is run by private contractors.
Doolittle also said a public option is not a “silver bullet.” He said there has to be a discussion about lowering the costs in the system and that’s the tough conversation no one seems to be willing to have. He said health insurance is expensive because healthcare costs are expensive.
“We can’t just pass a public option and walk away,” Doolittle added.
Dan Muese, deputy director of State Health Value Strategies at Princeton, said 63 percent of the uninsured in Connecticut are under 300 percent of the federal poverty level, which means they qualify for subsidies if they purchased health insurance through the exchange.
But is that the population Connecticut wants to target to lower its uninsured rate?
Mann said Connecticut has to look at how best to use a public option and which population it wants to target.
She said Connecticut could look at doing a “more targeted buy-in program” and leave the marketplace intact. She said it could then look at getting a waiver from the federal government after the targeted buy-in program to help capture any potential savings “when there might be more receptivity at the federal level.”