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"Obama-Ready" Public Health Insurance Plans Approved by CT House

Note: Key players in passage of these CT models for health reform, including Speaker Christopher Donovan, the Universal Health Care Foundation of Connecticut, the CT SEIU State Council and AFSCME Council 4, will be honored for this work at Progressive States Network's annual gala

Last week, the Connecticut House of Representatives passed two bills that proponents say will make Connecticut "Obama-ready" for national health care reform being debated in Congress.  Most notably, each CT bill would create the choice of a public health insurance plan in the state.

The Connecticut Healthcare Partnership (H.B. 6582), sponsored by Speaker Christopher Donovan, would self-insure the state employee health insurance pool and open it up to small businesses, non-profits and municipalities; and, SustiNet (H.B. 6600), authored by the Universal Health Care Foundation of Connecticut, would create the choice of a new public health insurance plan for residents and businesses as part of a broader comprehensive reform initiative.  Both initiatives are strongly supported by majority Democrats and are viable together or as stand-alone reforms.

Connecticut Plans Highlight Models for Public Insurance Plan Options:  The passage of these bills, after almost ten hours of floor debate, puts Connecticut at the heart of the national health care debate - whether to provide Americans with the choice of a public health insurance plan that competes side-by-side with private plans.  Connecticut lawmakers, as well as legislators across the country, are weighing in and asserting that public plan choice is an absolute necessity.

As CT Speaker Donovan said,

“We’ve got a chance to make sure Connecticut is Obama-ready. The time for healthcare reform in this country, and in Connecticut, is long overdue. With reform now a national priority, we can position Connecticut for a leadership role in giving our families healthcare they deserve. These bills will provide those families with real healthcare options, can provide economic relief to the state, our towns, small businesses and non-profits at a time of need, and will ready Connecticut for federal reforms when they are passed.”

The need for change in Connecticut is highlighted by a New America Foundation report on the "cost of doing nothing."  New America found that Connecticut lost $2 billion, or $6,126, per uninsured resident in 2007 in lost productivity due to the shorter lifespans and poor health of the uninsured, the third highest level in the country.  By 2016, the report finds that employer-sponsored health insurance costs for a family will jump from $14,300 to a staggering $25,000.

CT Healthcare Partnership:  The Partnership would allow small groups to pool with the state employee plan, which has more than 200,000 members. This would generate significant bargaining power and savings for plan members, enabling small employers and municipalities to achieve more favorable rates for comprehensive coverage. The bill's fiscal note, in fact, says that small towns and small businesses "will achieve savings from the state's large-group purchasing power, pooled risk and administrative economies of scale." 

While more than 20 states allow similar pooling of state and municipal workers, Connecticut would be the first to allow small businesses to join the plan at such a large scale.  The plan would infuse the state's health insurance market with competition and force private insurers to work harder for small group market share.  As Speaker Donovan said, "This will allow businesses to stretch their dollars further, attract talented people, and grow their organizations.”

By self-insuring the state employee plan, rather than be full-insured by private insurers, the state would achieve an upfront savings of $70 million dollars and give taxpayers, state employees and many small businesses greater control of their benefits.  A form of the Partnership first emerged in 2007 and was passed by the legislature last year before being vetoed by Governor Rell.  Despite the governor's previous opposition, advocates have continued to advocate for the plan across the state.

SustiNet: SustiNet, a parallel measure to the Partnership, would create an even more robust public plan to compete in the insurance market, and institute broader comprehensive health care reforms.  The bill would self-insure the state employee health plan and Husky (Medicaid) and create a new public plan available to small businesses and, importantly, individuals who lack access to affordable and quality employer coverage.  The new SustiNet plan would later be available as an option to larger employers in the state. 

Similarly stressing the "Obama-ready" theme and the compatibility of the Partnership and SustiNet, President of the Universal Health Care Foundation of Connecticut, Juan Figueroa, said, “Both bills will ensure Connecticut is first in the race for federal health reform resources. Fixing the health care system and economic recovery go hand-in-hand." Some key provisions of SustiNet inclue:

  • Unlike private insurance, all SustiNet applicants would be accepted regardless of pre-existing conditions and benefits would be comprehensive, including medical home services, mental health and dental care.  
  • To help ensure affordability, premiums would be subsidized based on income.  
  • To address the growth of health care costs and the quality of care, delivery system innovations are included that would influence change in private plans in Connecticut.  SustiNet is projected to cut the state's uninsured rate to 2% of the population, roughly 50,000 people. 

Economic modeling conducted for the foundation by Dr. Jonathan Gruber and The Urban Institute shows that delivery system changes and other cost control measures would significantly reduce the annual growth of health care costs, saving employers $1.35 billion, cutting individual health care costs by $540 million and bringing in an additional $800 million in federal matching funds to Connecticut.  While increased state revenues would be required to cover the cost of subsidies and raising provider rates in the Medicaid program to reduce the cost shift, households and employers would save nearly two dollars for every additional dollar spent by the state.

Public Insurance Plans are Nothing New:  SustiNet uses the choice of a public health insurance plan to ensure all residents have quality and affordable health care and to infuse the market with competition, as does the Healthcare Partnership.  If enacted, these proposals would go further than any state in creating the choice of a public plan for a wide range of health care consumers.  Bills modeled after the Healthcare Partnership surfaced this year in Iowa and New Hampshire, and proposals on a similar scale to SustiNet are being debated in at least Wisconsin, Washington, Oregon, and New York

Despite doomsday claims by the Right against the choice of a public plan, the idea of a public plan is not new to health care in the US, as we detailed in a recent Dispatch.  Along with Medicare, Medicaid, and the Veterans' Administration health program, states have created public plans that co-exist with and compete with the private market.  Thirty states currently offer state employees a public option side-by-side with private plans. And, many states have created public insurance choice for all children, most notably Illinois’ AllKids program.

While serving in the insurance industry capital of the world, Connecticut lawmakers have built the political will and public support to pass legislation creating the choice of a public health insurance plan.  This is a clear model for leaders in Washington DC to provide the same choice of a public plan as part of federal health care reform.

Resources:
Connecticut Healthcare Partnership - H.B. 6582
SustiNet - H.B. 6600
House Leadership - Health Care Reform
Universal Health Care Foundation of Connecticut - SustiNet
Progressive States Network - State Public Health Insurance Plans are Models for National Health Reform