HARTFORD, CT —The first person Gov. Ned Lamont ran against is responsible for killing a public option as part of the Affordable Care Act a decade ago, but as governor he might have a chance this year to sign a public option into law.
Lamont didn’t defeat former U.S. Sen. Joseph Lieberman in 2006. Three years later Lieberman became a crucial vote for the Affordable Care Act, but only if it didn’t include a public option.
This year Democratic lawmakers have been working with state Comptroller Kevin Lembo to create a public option health insurance plan for small businesses with the hope it could expand it to individuals by 2021.
“Ten years after Joe Lieberman killed the public option, Ned Lamont and the General Assembly can finally deliver on the promise of real reform,” Sen. Matt Lesser, D-Middletown, said.
The legislation, which was released Thursday, would allow small businesses with 50 employees or fewer to buy into the state employee health plan managed by Lembo’s office. It’s unlikely the plan would be offered on Connecticut health insurance exchange called Access Health CT.
Lembo said the plan designs might not meet the federal criteria to be sold under the Affordable Care Act. That also means the small employers might not be able to tax advantage of some federal tax subsidies that they would have access to if they had a plan on the exchange.
The legislation proposed by the Democratic majority would give the comptroller the ability to hire an insurance company to administer the state plan. Currently there are only two insurance companies offering plans to small businesses through Access Health CT.
Small businesses employee over 700,000 people in Connecticut, but less than half offer health insurance benefits to their employees. Many of those who do have coverage face outrageous deductibles and premiums, according to Lembo.
Lembo believes he would be able to offer a plan that’s more affordable than what’s currently offered in the small group market both on and off the exchange.
The state employee health insurance plan, which is self-insured, currently covers close to 200,000 lives. It’s unclear at the moment whether union leaders or their membership would have to vote to allow small businesses into their plan. Currently, the plan allows municipal and local board of education employees join their plan.
Union leadership is supporting the expansion of its plan to small businesses.
“This is a great thing for those small businesses and their employees,” Daniel Livingston, chief negotiator for the State Employees Bargaining Agent Coalition, said. “And it’s a great thing for the State a whole, because too often small businesses struggle to provide health coverage or rely upon high deductible health plans which discourage quality health care.”
There’s no fiscal note for the legislation yet, but Lesser estimated that it will only cost $1 million in start-up costs and actuarial analysis since Lembo already manages similar plans.
The state would then go out to bid for a third party administrator to offer the plan to small businesses. The new plan would be called the “ConnectHealth Program” and would not allow any high-deductible plans.
Lembo said it’s unlikely a small business would be able to afford the state employees health insurance plan which is rich in benefits, but they would come up with other plan designs that are more affordable for small businesses to offer their employees.
It’s unclear what rates those plans would pay doctors or what the networks would look like. Those decisions will be left up to Lembo and an advisory council and the Office of Health Strategy.
Jon Kingsdale, managing director of Wakely Consulting, said he doesn’t believe this will really help lower the cost of health care. He said Connecticut even with a big pool doesn’t have negotiating power with hospitals, which have consolidated to the point where they have the upper hand in these negotiations.
He said policy makers have been promising rate relief to small employers for decades now.
“I have yet to see it happen,” Kingsdale said.
He said financial relief won’t happen by moving people around from one insurance pool to another.
The Connecticut Association of Health Plans, which represents the health insurance industry, said these proposal “forge a path to single-payer health care that will likely limit people’s choices while increasing taxes and ballooning the state budget.”
“It’s important to understand that the vast majority of today’s premium dollar goes directly to supporting reimbursement of physician, hospital, and other treatment providers. Without changing the underlying structure of reimbursement, which will require reducing provider payments, subsidizing those costs, or both, the cost of health care coverage will continue to rise,” the industry said in written testimony.”
Sen. Kevin Kelly, R-Shelton, said he believes a public option would be more expensive than $1 million.
“This is something that would be extremely expensive for our state and would crowd out already limited state funding for core services for the most vulnerable,” Kelly said. “Rough cost estimates provided at today’s press conference were not based in reality. There is a reason why President Obama did not go in this direction when he developed the Affordable Care Act and there is a reason why no other state has this system.”
He said a public option would “actually lead to more expensive health care costs over the long term and destabilize the individual market through less competition as private insurers would be forced to compete with a government option that can offset costs at any time simply by raising taxes.”
But there seemed to be more supporters than opponents.
The proposal has the support of the Universal Health Care Foundation, which tried 10 years ago to get Connecticut to pass a public option called “Sustinet.”
“Now 10 years later we see clearly that the health insurance market continues to fall short for too many people,” Frances Padilla, president of the Universal Health Care Foundation said. “We believe Connecticut should step up to the challenge. Why not use our state’s buying power to offer a new state health plan in the market? We believe people will choose it, if it offers quality care at a price they can afford.”
It also has the backing of the Connecticut State Medical Society, which has been frustrated by the inability of residents to seek treatment due to these high deductible plans in the marketplace.
“It puts an undue burden on the patients and physicians,” CSMS President Dr. Bollepalli Subbarao said.
He said there needs to be improvement in plan design and choice on the exchange, which is why he believes a public option is necessary.
Senate President Martin Looney, D-New Haven, said many people have only health insurance “in name only.” He said what they really have is catastrophic insurance coverage where a deductible only kicks in, if at all, during a catastrophic event.
“That’s not true health insurance,” Looney said.
It’s unclear where Lamont falls on the issue.
“The governor believes we must address the challenges of affordability, access, cost, and quality in Connecticut’s healthcare system, and looks forward to working with legislators, healthcare providers and facilities, insurers, the Comptroller and others to identify reasonable, sustainable and effective solutions that don’t overly burden taxpayers,” Maribel La Luz, Lamont’s communications director, said in an emailed statement.