Fact Sheet: States Debate, Pass Public Health Insurance Plans

While the current debate in DC has focused on the choice of a public health insurance plan, state legislators and health care advocates have already advanced this priority — providing models, debating proposals in state house and communities, and generating public support.  State advances on the choice of a public option in Connecticut, in Wisconsin, in state SCHIP and in public employee health plans across the country provide concrete models for comprehensive federal health care reform.


On May 30, 2009, the Connecticut State Legislature passed two bills that, in the words of supporters, would make Connecticut "Obama-ready" for national health care reform.  Each 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 plan and open it up to small businesses, non-profits and municipalities. 
    • Allowing small groups to pool with the state employee plan, which has more than 200,000 members, would generate significant bargaining power and savings for small businesses.
    • In Fact, the bill's fiscal note 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."i (Similar bills were introduced this year in Iowa and New Hampshire.)
  • SustiNet (H.B. 6600) would create the choice of a public health insurance plan for residents and businesses as part of a broader comprehensive reform initiative that is estimated to cut the state’s uninsured rate to 2% of the population and save employers $1.35 billion.ii
    • The SustiNet plan would be self-insured and available to small businesses and individuals who lack access to affordable or quality employer coverage.  The plan would later be open to large businesses.
    • Unlike private insurance, all SustiNet applicants would be accepted regardless of pre-existing conditions and premiums would be subsidized based on income.  
    • The bill includes delivery system innovations to reduce health care costs and improve the quality of care
      • Economic modeling conducted by Dr. Jonathan Gruber and The Urban Institute shows that these measures would generate significant savings — $1.35 billion for employers, $540 million for individuals and bring 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. SustiNet is authored by the Universal Health Care Foundation of Connecticut.

Both initiatives are viable together or as stand-alone reforms.  They now go to Gov. Jodi Rell for her consideration. 


In June 2007, the Wisconsin State Senate became the first legislative chamber in the country to pass a fully-funded comprehensive health care reform package that would guarantee health care for all residents and enhance their choice of provider.  
  • Guaranteed Health Care for All — Healthy Wisconsin, sponsored by Sen. Jon Erpenbach, would provide all residents not otherwise in a federally-based health plan, like Medicare or Medicaid, with portable comprehensive benefits modeled after the health plan provided to state legislators.  
  • Choice of Providers — Residents would have choice of doctors and health plans, or networks of providers who would compete based on metrics of quality, cost and access. 
  • No Premiums, Costs are Limited by Family Income — Instead of premiums, health care would be financed with payroll deductions: 9-12% of social security wages for employers and 2-4% of social security wages for employees.  This ensures costs reflect an employer’s and family’s ability to pay.
  • Cost Savings — Costs would be cut system-wide through administrative efficiency, the negotiating power achieved by pooling all eligible residents, and improved systems for preventive care and chronic care management.  A 2008 report by Citizen Action of Wisconsin estimates the average household would save 40% to 62% under the new program compared to the current disjointed health care system — an annual savings of $1,320 to $4,180 each year.iii  A Lewin Group study shows that employers currently providing coverage at some level would save $700 million dollars in the first year of the program and the state would save $1.3 billion each year for the next ten years.iv

While it did not pass the State Assembly in 2007, proponents continue to advocate for the plan, which  stands out for its guarantee of affordable health care, cost containment provisions, and consumer choice — demonstrating the potential cost savings and quality improvements achieved from a large public plan. (Similar bills have been introduced in Washington, New York, and Oregon.)

Other State Advances

  • A Public Option for Kids: Several states have acted to ensure all children have access to health care coverage.  Illinois was first to the table with its AllKids program, creating a public option for children in families unable to afford private coverage and with sliding scale premiums based on family income.v  Other states, like WA, IA, NY, NJ, and MA, have created similar programs by expanding eligibility for SCHIP and, in some cases, allowing families with income above eligibility levels to buy into the state plan at full cost.  
  • State Employee Health Plans:  HHS Secretary Kathleen Sebelius recently noted that roughly 30 states have state employee health plans that provide employees with a choice of public or private coverage, an option particularly important in states/regions with only a few major


i Office of Fiscal Analysis, 2009, An Act Establishing the Connecticut Healthcare Partnership,
ii, 2009, SustiNet,
iii Citizen Action of Wisconsin, 2008, Good Deal: How Healthy Wisconsin Improves the Bottom Line for Wisconsin Families,
iv The Lewin Group, 2007, Healthy Wisconsin — Your Choice, Your Plan: Cost and Coverage Impacts,
v NCSL, Illinois All Kids Program: A First in Universal Health Care,
vi YouTube, May 6, 2009, Sebelius Responds on a Public Health Insurance Plan,