
HARTFORD, CT — (Updated 1:30 p.m.) The Access Health CT Board of Directors learned Thursday that if the General Assembly had approved legislation to apply for a federal reinsurance waiver a few weeks ago, the state might have been eligible for up to $28.4 million in federal funds to lower premiums 5%.
In the final hours of the legislative session the Senate failed to approve legislation that would allow the state to apply for the waiver, which according to the May 23 Wakely study would have required the state to spend $19.2 million to $21.2 million in order to receive the funding.
The proposal to apply for a reinsurance waiver was embedded in legislation that initially was supposed to create a state-run insurance program that would have ended up as a public option if insurance companies didn’t offer certain lower rates to individuals. That language was stripped from the legislation once the insurance industry raised objections. The House passed the bill 112-28 on June 4.
What was left of the legislation was a reinsurance waiver. However, Republicans in the Senate objected to raising the state portion of the funding through an assessment on insurance companies.
At the time, Sen. Kevin Kelly, R-Stratford, said he didn’t understand how the assessment would lower premiums because it would likely get passed along to consumers. Unable to broker a deal, the legislation died on the Senate calendar.
The Wakely study assumed that state funding would not rely on premium assessment as it was proposed in the legislation.
Kelly, who supports the concept of reinsurance, said states that rely on premium assessments get far fewer federal dollars than states who use money from the general fund to contribute the state share of funding. Kelly said Thursday that he identified spending in the budget that could have been used to fund the state share, but when he offered up those savings Gov. Ned Lamont’s administration said the money had already been used for another purpose.
Kelly said finding $20 million in savings in the state budget to use to help lower health insurance premiums should have been the first thing Lamont did when he looked at the budget.
He said it’s not a partisan issue and everyone hears from their constituents about the cost of healthcare. Kelly said a reinsurance model like the one presented in the Wakely report would have brought relief to consumers.
“Under a reinsurance program the issuer is reimbursed for some of the claims for which it previously would have been liable,” Wakely said in its May 23 study. “Consequently, the issuer can lower premiums without incurring losses.”
The Wakely study, which was based on 2020, did not take into consideration where the state would get its part of the funding for the program. It also didn’t consider the administrative costs needed to run the program.
Susan Rich-Bye, legal director for Access Health CT, said the state would likely hire a third party to administer the program.
There are currently about seven states that have received a 1332 federal reinsurance waiver and the premium savings vary, Rich-Bye said.
Paul Lombardo, an actuary with the Insurance Department, pointed out that Minnesota received far less from the federal government through the waiver than it initially expected.
“They got about half of what they were expecting so it’s not set in stone,” Lombardo said. “That’s just something to keep in mind as we go forward.”
Vicki Veltri, executive director of the Office of Health Strategy, said the study of reinsurance will help further the debate next year.
“It was helpful to us even though what we were trying to do did not make it this year,” Veltri said.
Connecticut had participated in a reinsurance program that expired in 2016 under the Affordable Care Act.
Premium savings of 6% to 11% were achieved during the last year the program was available, Rich-Bye said.
She said when the program expired premiums increased 8% to 10% based on the absence of the program.
She said reinsurance is a short-term measure and if you want to see greater savings the state will have to look at adjusting other “levers” to drive down healthcare costs.
Support authentic, locally owned and operated public service journalism!
Insurance companies participating in the individual and small group markets in Connecticut are expected to submit their rates to the Insurance Department for review on July 8 for plans that will be made available in 2020.
RELATED
• Lamont Promises To Continue Work on Health Reform
• House Sends Health Reform Bill To Senate
• OP-ED | An Insurance Company Killed the Connecticut Option – It Can’t Happen Again
• A Partisan Budget With No Counter-Proposal
• Connecticut Option Is Dead For Now
• OP-ED | Better Public Option Bill Looks to Bigger Picture
• Sweeping Changes Made To Public Option Health Insurance Bill
• Behind The Scenes: A Meeting On The Public Option
More Health Care News & Analysis
Medical Examining Board Fines Doctor $10,000
The state Medical Examining Board on Tuesday fined an Oxford doctor $10,000 for fraudulently using another doctor’s name and Drug Enforcement Agency registration number to prescribe controlled substances to a family member.
Keep reading
Clinical Trials With Immunotherapy Drugs Are Source Of Hope And Challenges In Treating Aggressive Breast Cancer
Joshalyn Mills of Branford and Nancy Witz of Kensington had the best possible results after being treated in clinical trials with immunotherapy drugs for aggressive breast cancer: Their tumors were eliminated. But while there are dramatic successes with immunotherapy drugs, there are also many failures, and researchers are trying to find out why in hopes…
Keep reading
Coalition of Health Insurers Questions Viability of Connecticut Partnership Plan
Members of Connecticut’s Health Care Future, a coalition of health insurers, hospitals, and businesses, are questioning whether Connecticut lawmakers have done enough this year to protect teachers and municipal employees from increases in health insurance premiums. “Despite repeated bailouts from taxpayers, the Connecticut Partnership Plan continues to be a fiscal Titanic that demonstrates why government-controlled health…
Keep reading
AG’s Tackle Mental Health Parity
Attorneys General in Connecticut and Rhode Island threw their support Monday behind a coalition of mental health advocacy groups asking a federal appeals court to revisit a recent ruling giving insurance companies more flexibility to deny mental health claims.
Keep reading
Budget Green Lights Psychedelic Therapies
Buried in the budget Gov. Ned Lamont signed this week is a provision that would create a pilot program to allow Connecticut to be the first-in-the-nation to study the impact of psychedelic drugs like psilocybin and MDMA on patients with depression and PTSD. The budget now creates a pilot program within the Department of Mental…
Keep reading
Officials Highlight Effort To Boost Mental Health Services For Kids
At a Hartford-based community provider Wednesday, Gov. Ned Lamont and a handful of his agency commissioners highlighted the expected impact of more than $100 million in recently passed funding aimed at increasing behavioral health services for Connecticut children. The governor appeared at The Village for Families and Children, a recipient of new state funding included…
Keep reading