More than 450 individuals and organizations submitted written testimony in a public hearing debating the merits of having a widely available state-sponsored health insurance plan — otherwise known as a public option — in Connecticut.
The proposed bill would make the health insurance plan currently reserved for state employees available to small business owners, in an effort to allow them to provide their employees with health insurance at a lower cost.
Connecticut State Comptroller Kevin Lembo said that the plan would help small business owners by taking away the incentive for employees to leave for larger companies who could offer better benefits. He also said that the lower health care prices would enable employers to invest more money back into the economy.
Under the plan, Lembo said that premiums would not rise or fall more than three percent from one year to the next for any given business.
The bill would also broaden the eligibility for HUSKY A — the public health insurance program that covers pregnant women, children, and parents or caretaker relatives — to individuals earning up to 201 percent of the poverty level.
In a press conference yesterday, State Sen. Kevin Kelly, R-Stratford, expressed strong disagreement with the proposed bill.
“It is not traditional insurance, it is not regulated by the insurance department, and it does not have all the insurance protections built in,” said Kelly. “Quite frankly, what it is, is a 50 million dollar tax assessment of current premiums which will increase the cost of insurance for Connecticut’s middle class families.”
State Rep. Cara Pavalock-D’Amato, R-Bristol, pointed out that the plan for state employees ran at a deficit of $30 million in 2019 and had to be funded using money from the General Fund.
Some of Kelly’s points were reiterated by State Sen. Tony Hwang, R-Fairfield. During the public hearing, Hwang expressed concern that the language in the bill allows the State Comptroller to choose which individuals would and would not be covered, potentially allowing him to refuse to cover individuals with pre-existing conditions.
Hwang also questioned the fact that the bill allowed the Comptroller to leverage administrative fees without any clear parameters, and that people who signed up for the plan would be required to remain in the program for three years or pay a fee to exit early.
Lembo said that some of the measures were necessary in order to make sure that businesses weren’t using the exchange as a way to “wash bad risk” by purchasing state insurance for only their employees at the highest risk for needing medical care.
He also said that he did not want to take on stop-loss insurance for the exchange, designed to protect against having to take money from the general fund if the plan ran at a deficit. He said that with so many people in the plan, he considered it “wasteful.” The Medical Loss Ratio in 2020, he said, was 94 percent, and the program was fiscally strong.
Of the submitted testimony, 159 wrote in support of the bill and 288 opposed, with a few claiming neutrality.
One woman who testified was Pam Hunt, a Personal Care Assistant and member of the New England Health Care Employees Union. As a mother of eight children, one of whom has severe disabilities, she said she lived in fear of exceeding the cap on her HUSKY insurance.
“I’m a cancer survivor and COVID survivor,” she said. “It’s a shame that we have to be put in a position to maybe cut our income just to make sure we can stay alive.”
Camryn Kessler, a graduate student in social work at the University of Hartford, said she was also in support of the bill. She said that her family’s health insurance plan has a $5,000 deductible. After having her appendix removed last year, she said she’s still trying to pay off the costs from the surgery.
“I’m currently insured, and I have health insurance, but I can’t afford to receive health care,” she said.
Several executives of nonprofits, including the National Association for Mental Illness and the CT Legal Rights Project, testified that their employees would rather get healthcare through spouses who worked through the state, or that they themselves chose to remain on a federal health plan rather than try to pay for insurance with a private carrier.
Another attendee and representative of the Working Families Party, Luis Luna, spoke about the positive effects this bill would have for undocumented individuals who are currently uneligible for state-sponsored healthcare. The bill sets aside $25 million for subsidies for individuals who are not eligible for healthcare through the exchange.
Representatives from the private insurance companies strongly opposed the bill.
Susan Halpin of the Connecticut Association of Health Plans, which represents Aetna, Anthem, Cigna, ConnectiCare, Harvard Pilgrim, and United Healthcare, said that the partnership plan was “a death spiral” for the private market, since healthy individuals would naturally gravitate toward a plan that offered lower premiums, leaving the private insurance companies without customers. She said this would ultimately create a single-payer system.
“The private insurance can’t compete,” said Halpin. “The partnership has the ability to set prices too low and offset them with taxpayer dollars.”
Halpin also pointed out that a lot of the money the insurance company made that was not being spent on claims was paying people who work in the industry.
“In Connecticut, a lot of MLR is insurance jobs,” said Halpin.
Halpin protested that the committee was expecting only the insurance companies to “come to the table” rather than also asking for cooperation from the pharmaceutical companies and the hospitals.
Halpin also said the current premium rates the comptroller was proposing would not be enough to cover the claims being made.
Halpin said the state’s plan could only end in one of three ways: raised premiums, raised taxes or slashed provider rates.
“We need a third option”
A number of individuals who testified said that they could neither oppose nor support the bill, since they agreed and disagreed with different aspects of the legislation.
The Connecticut Coalition of Taft-Hartley Health Funds, which represents bricklayers, painters and plumbers unions, expressed interest in the plan. Executive Director Cassandra Murphy said that the state plan could relieve financial stress and administrative burdens for some of the unions, while for others it would mean less decision-making power when bargaining with employers.
Dr. Gregory Shangold, president of the Connecticut State Medical Society, said that he was in support of expanding people’s access to health care, since individuals without healthcare ultimately lead to more costly procedures. However, Shangold said that the new influx of people into the state exchange and the state plan could “overwhelm the current physicians network.”
The group’s written testimony said that the public option needed to include “prompt payment for network physicians, peer-to-peer medical necessity determination reviews and limitations on retrospective audits and reviews.”
Alan Sheketoff, who has run a private insurance firm for 25 years, expressed concern that the public option cannot be offered alongside any other option, and said that lack of competition was already causing problems in the insurance market. He also said that the Connecticut Business Industry Association found that 60 percent of small businesses oppose the bill.
Sheketoff asked whether people would have access to networks outside the state of Connecticut. He also questioned the idea of having state employees, who may not be specialists in the field of insurance, brokering insurance plans and dealing with “system glitches,” for instance, if a plan is accidentally cancelled.
“There’s definitely a lot of vagueness,” he said. “How many options are there going to be in the public option?”
Hwang said that while the goal of both Democrats and Republicans was to make healthcare more affordable, it was important not to raise expectations that a single bill could solve all the problems of the healthcare system.
“This is a step of a discussion, but it is not the panacea and the solution for the incredible myriad of challenges that we have,” he said.