Connecticut Gov. Ned Lamont asked the insurance industry and the pharmaceutical industry to pay for his health care plan as part of his budget proposal Wednesday, but he did not embrace a public option to compete with the industry.
He’s asking the insurance industry to subsidize premiums for low-income individuals who purchase their insurance on the exchange.
“It’s difficult to access health care amidst a public health pandemic,” Office of Policy and Management Secretary Melissa McCaw said. “It’s time to make more progress in terms of more affordable health care on the exchange. It’s targeted and specific. It’s not broad-based.”
McCaw said the governor’s budget focuses on those in the greatest need.
Lamont’s budget asks the insurance industry to pay $50 million in assessments to increase the subsidies for low-income individuals purchasing their insurance through Access Health CT. This group of individuals receives federal subsidies, but the Lamont administration contends they’re not enough to make health care affordable.
There are about 70% of the 100,000 Connecticut residents who purchase their insurance on the exchange and receive federal subsidies to lower the cost of their monthly insurance premiums. The legislation would help some of those 70% who already receive those federal subsidies, and the money to pay for it would come from those who don’t receive subsidies and those who are insured by large employers.
Lamont’s budget would also impose penalties on the pharmaceutical industry for increasing the cost of prescription medications that exceed certain levels.
BioCT President and CEO Dawn Hocevar said in a statement, “If Governor Lamont and the legislature truly want to lower drug pricing, then the pharmacy benefit managers, insurance payers and hospitals need to be part of the solution. Pharmaceutical companies invest more in R&D relative to sales than all but one other manufacturing industry — over 20%, more than six times the average for the manufacturing sector as a whole.”
While Lamont’s budget looks to the industry to be part of the solution, it does not embrace the public option that would allow state Comptroller Kevin Lembo to expand the Connecticut Partnership Plan to give small businesses and nonprofits another insurance option.
“I look forward to reviewing his prescription drug proposal and agree that we need to do more to lower skyrocketing drug prices,” Sen. Matt Lesser, co-chair of the Insurance and Real Estate Committee, said. “His plan currently does not offer support for struggling small businesses and nonprofits, nor does it clearly expand Medicaid or health care options for immigrant communities, and I continue to believe those are essential elements that should be included in any eventual health reform.”
Lamont also wants to hold the line on some costs by imposing an asset test for the Medicare Shared Savings Program, which helps pick up some of the cost for Medicare Part B premiums, deductibles and coinsurance for older residents. McCaw said Connecticut is one of only 9 states that don’t impose some sort of asset test for the program.
The move would save the state about $26 million a year because fewer people would qualify for the program.
In 2018, lawmakers on a bipartisan basis voted in a special session to restore funding to the Medicare Savings Program after their offices were flooded with calls from the more than 100,000 state residents who benefit from the program.
McCaw said even with the asset test, the income eligibility levels for the program will remain the highest in the nation.
But that ignores the consequences of Connecticut shuttering its pharmacy assistance program in 2013.
“This may seem like a reasonable cost saving proposal on the surface, but it is important to understand the history of why Connecticut doesn’t have an asset test,” Nora Duncan, state director of the AARP, said. “Connecticut closed its State Pharmaceutical Assistance Program in 2013 and, in exchange, made more seniors eligible for the Medicare Savings Program by eliminating the asset test.”
By eliminating the asset test, it “allowed more seniors to enroll in the Low Income Subsidy, a federal benefit that helps people pay for prescription drugs. With both of these rugs pulled out from under them, thousands of Connecticut seniors will no longer receive assistance paying for the medication they need to stay alive and healthy.”
Duncan is hoping lawmakers reject this proposal like they did in 2018.