Legislators are debating a trifecta of bills addressing one of the biggest concerns Connecticut residents are facing this year — the cost of healthcare.
The first bill — the Democrats’ public option plan — would allow individuals and small businesses to purchase insurance on the state exchange.
The second bill, proposed by Gov. Ned Lamont, would tax health insurers and use the money to create subsidies for people who buy insurance on the state exchange, Access Health.
On Thursday, legislators held a public hearing on a third alternative: a Republican-backed combination of reinsurance and benchmarking that lawmakers say would better regulate insurance companies and drive down prices.
The proposed reinsurance program would set aside funds from the state budget that insurance companies could tap if claims exceed a certain amount. State Sen. Kevin Kelly, R-Stratford, told CT Examiner in December that having these funds on hand would lower premiums.
Kelly, who has advocated for legislation, said that the state could request a 1332 Affordable Care Act waiver, which allows states to receive funding from the federal government for “innovative strategies for providing their residents with access to high quality, affordable health insurance.”
In a press conference on Wednesday, Kelly said that the proposal could reduce premiums by up to 30 percent, and would allow individuals to keep their own doctors and health insurance.
“We would have affordable health care, there would be improved quality and greater access,” said Kelly. “Our bill can do all of those things.”
The bill also allows the Office of Health Strategy to set goals for how much healthcare costs should grow each year, essentially codifying the benchmarking process in Lamont’s January 2020 Executive Order.
The proposal would require an appropriation of $80 million through the general fund. Kelly said that in following years, the healthcare cost savings could be used to fund the reinsurance program.
Insurers HarvardPilgrim, Anthem and Cigna submitted testimony in support of the bill.
Kelly said that an advantage to the reinsurance model was that it wouldn’t create competition with the insurance providers, and therefore protect jobs in the state. Susan Halpin, a lobbyist for the Connecticut Association of Health Plans, which represents the insurance industry, echoed this.
“[The public option] puts us out of business, if you take it down to its full conclusion,” said Halpin.
State Sen. Matt Lesser, D-Middletown, co-chair of the Insurance Committee, said that reinsurance was initially discussed to fix a so-called “subsidy cliff” in the Affordable Care Act — the fact that individuals earning 400 percent above the poverty line, about $51,000, were not eligible for healthcare subsidies. The federal American Rescue Plan, which President Joe Biden signed into law Thursday afternoon, closes that gap. Lesser argued that this makes reinsurance unnecessary.
“The situation has changed,” said Lesser. “This bill seems as obsolete as a dodo bird.”
Sean King, senior staff attorney at the state’s Office of the Healthcare Advocate, said that the current benchmark needed to be adjusted to better protect lower-income households from spikes in healthcare costs.
Win Evarts, executive director of The Arc Connecticut, a group that advocates for individuals with intellectual and developmental disabilities, said in written testimony that he feared the benchmarks in the Republican-backed bill would risk reducing access to certain life-saving medications and treatments, particularly for Medicare and Medicaid recipients. Evarts said that the Performance Improvement Plans that carriers are required to file if they do not meet the benchmark standards don’t do enough to hold the companies accountable.
“Performance Improvement Plans (PIPs) … do not consider, or try to minimize, cuts in access to services, impact on the quality of care, or avoiding costly patients,” Evarts testified.
The Republican-backed bill would also allow Connecticut pharmacies to import prescription drugs from Canada. That measure comes in the wake of a 2019 report by the U.S. House of Representatives Ways and Means Committee that found that prescription drugs in Canada cost 28 percent of what the same drugs cost in the U.S.
Florida, Colorado, Vermont and Maine have also taken steps toward allowing the importation of drugs, but the Biden administration has not yet given the necessary approval to the states.
In November, the Pharmaceutical Research and Manufacturers of America filed a lawsuit against the federal government in protest of the potential importation.
The Connecticut Pharmacist’s Association also raised concerns that such imports bypass the strict oversight of the pharmaceutical supply chain under the Drug Supply Chain Security Act. They argued that this could put consumers at risk.
The industry group also raised doubts that the measure would save money for consumers, given that there would be additional costs associated with tracing drugs and reporting adverse effects.
“Importing drugs from Canada is neither safe, nor cost effective, and it will put Connecticut’s patients at risk,” Nathan Tinker, the CEO of the association, wrote in his testimony.
Prior to the hearing, the Democrat’s public option bill was moved out of committee, although not without a heated debate that led to an additional amendment to the bill.
State Rep. Kerry Wood, D-Rocky Hill, added a provision that would require more stringent auditing of the state Comptroller’s Office, which would oversee the public option.
“[This] will put all of us at ease who are concerned about the state budget being the backstop of this plan,” said Wood.
Republican committee members complained that the passage of the public option bill out of committee was rushed. Members said that they received changes to the bill just hours before the meeting without sufficient time to review the legislation.
A number of legislators, and some experts who offered testimony at the hearing, said that they would prefer a bill that “cherry-picks” the best options from each of the three proposals.
“There are three bills out there — could we, through all three of them, look to collaborate and have the best solution? I think so,” said State Sen. Tony Hwang, R-Fairfield.
“As we deliberate, I think we should look to include the best element of all the bills instead of taking one over the other,” added Hwang. “And that, unfortunately, is not the process we undertook today.”