Under the proposal, Connecticut would create multiple plans that small businesses and their employees could buy starting in July, leveraging the state’s existing purchasing power to lower costs. And in 2021 Connecticut would begin offering a new health-insurance option that any state resident would be able to join.
The public insurance would offer more inexpensive coverage options for small businesses and for individuals who don’t qualify for subsidies through the Affordable Care Act, officials said.
The legislation would “increase competition, increase choice and increase the number of families who have health care they can actually afford,” said state Sen. Matt Lesser, the Democratic co-chairman of the Legislature’s insurance and real-estate committee, at a news conference Thursday.
Representatives of Connecticut’s health-insurance industry, however, said the public option would destabilize the state’s insurance market by paying hospitals and other medical-service providers below-market reimbursement rates, while other insurance companies would be forced to pay market rates.
“The proposal is anticompetitive,” Brendan Peppard, regional director of state affairs for industry group America’s Health Insurance Plans, told lawmakers during public testimony Thursday. The public options would have an advantage over traditional health plans that they would be competing with, he said.
The legislation calls for Connecticut to seek bids from private insurers to administer the public option for health insurance that would be open to all individuals. The state also would negotiate rates on behalf of individuals with private insurers.
“We are not talking about abolishing private health insurance,” said Democratic state Senate President Pro Tempore Martin Looney, who supports the bill. Speaker of the House Joe Aresimowicz, a Democrat, also backs the public-option legislation.
Gov. Ned Lamont, a Democrat in his first year in office, hasn’t said whether he supports the proposal.
The governor “believes we must address the challenges of affordability, access, cost and quality in Connecticut’s health-care system,” a spokeswoman for Mr. Lamont said. He plans to work with legislators, health-care providers, insurers and the comptroller to identify solutions that don’t overly burden taxpayers, she said.
State Sen. Kevin Kelly, the Republican ranking member of the insurance and real-estate committee, said Connecticut’s experience with Medicaid is a cautionary tale. He noted that some providers don’t accept Medicaid and the quality of treatment varies. “The Medicaid experience is by no means the gold standard,” he said. “For Democrats to want to put everyone on a system like this is problematic.”
Several Democratic-led states across the U.S. have begun pushes to expand health-care coverage after the 2018 elections. Oregon, California and Delaware are studying the feasibility of allowing residents to buy into Medicaid.