Proposed Public Health Option in Connecticut Proves Divisive

Allowing Connecticut small businesses and their employees to buy into the state’s public health plan is proving divisive.

By Kyle Murphy, PhD

May 22, 2019 - A proposed bill to allow Connecticut small businesses and their employees to buy into the state’s public health plan has advanced favorably through the state legislature, but not without resistance.

Connecticut legislators are mulling over a public health option that would allow small businesses and their employees to buy into the coverage provided to state workers. But they are facing resistance from major payers in the state.

Introduced in January by the Insurance and Real Estate Committee, Senate Bill 134 would enable individuals employed by small businesses in the Constitution State to enroll in the state employee health insurance plan (i.e., the public option).

“When I heard from my constituents, what I heard loud and clear was that they are sick and tired of feeling like the quality of their insurance is going down at the same time that the cost of insurance is going up. This bill is a really innovative thing,” said committee co-chair and State Representative Sean Scanlon (via The Connecticut Mirror).

If enacted, the bill would establish a program called ConnectHealth for individuals working for businesses with 50 or fewer employers who lack employer-sponsored health plans. According to estimates, the public option would roll out as early as 2021. Before then, the program must produce numerous analyses and plans detailing the impact of the health plan on the state insurance market, providers, and patients.

The Connecticut General Assembly received a favorable report on the bill, which is tabled for the Senate calendar in early May. Now, proponents and opponents of the proposed legislation are taking to the op-ed columns of local newspapers to debate its merits.

“With the industry having such a large presence in Connecticut, it’s vital that legislators carefully consider how their actions will affect insurance companies, their customers, and their employees. Unfortunately, this careful consideration does not appear to be occurring during this year’s legislative session,” wrote Jeffrey Hogan, northeast regional manager for Rogers Benefits Group, in the Hartford Courant.

Roger Benefits Group specialty marketing organization that connects small employer groups and health plans. The company maintains strategic relationships with two of the state’s most successful company, Aetna, which is headquartered in Hartford. In 2016, the payer with revenues of $60.5 billion left the federal health insurance exchanges in 2016 following a failed merger with Humana.

“There is absolutely nothing to suggest that the state can or will provide a sustainable small group offering that is cheaper or better than what the excellent professional health payers already offer in the open market,” Hogan maintained.

“What they are discussing will certainly affect private insurance companies, however,” he continued. “If this happens, every Connecticut resident will feel it. The insurance industry is incredibly important for Connecticut’s economy. Over 5 percent of our gross state product is due to this industry. This is far higher than the national average. Many Connecticut residents work for these companies. Nearly 3 percent of our state’s workforce is employed by insurance carriers.”

But the implication that the proposed public option will negatively impact the state’s job market has raised at least one set of eyebrows.

In response to Hogan’s op-ed, the head of the Universal Health Care Foundation of Connecticut — founded as a result of a settlement tied to the merger Anthem Insurance and Blue Cross & Blue Shield of Connecticut in 1997 — openly questioned that assertion.

“Here are the facts: Small businesses employ over 700,000 people in Connecticut. Over 500,000 of them work for businesses that employ under 100 people,” Frances Padilla explained.

“In contrast, direct health/medical insurance carriers employed 5,293 people in 2018, according to the state Department of Labor’s Office of Research and Information, with only a small fraction of these people responsible for products sold in Connecticut. The two companies with headquarters in Connecticut — Aetna and Cigna — barely sell insurance in the small group or individual market in our state.”

Opponents of the state bill claim that the legislation is a bridge to a single-payer system. However, the bill makes clear that enrollees must pay a premium on par with other qualified health plans.

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