SustiNet board responds to federal health reform and provides details for ‘public option’ for health coverage in Connecticut

A report on how the new federal health care law effects the future of a public health care option in Connecticut – dubbed SustiNet – was released today, including a rough draft on how to proceed.

“It’s an outline of what we are looking at,” said state Comptroller Nancy Wyman, also the co-chairwoman of the SustiNet Health Partnership Board that released the report. “We are ahead of most states. We have a plan that fits perfectly with the federal law. It’s amazing. We really are in good shape to go forward with the public option.”

Final draft legislation with detailed recommendations for implementing SustiNet will be made by the end of the year so the new General Assembly and governor can consider the package in 2011.

Kevin Lembo, co-chair of the SustiNet board and the state healthcare advocate, has said this plan, if adopted, would go above and beyond the federal reform.

“They set this new federal floor. Some states will chose to do nothing additional, but Connecticut I am confident will go above that,” Lembo said two days after the federal law was signed in March by President Barack Obama.

The SustiNet plan would offer a public insurance option to employees at the state’s small businesses, non-profits and municipalities beginning July 1, 2012. The federal health reform does not include a public option.

“In the wake of [federal reform], SustiNet could continue to be offered to Connecticut’s small firms and individuals in 2014 and later years, either through direct sale or via the exchange. To be offered in the exchange, SustiNet would need to become a state-licensed insurance product and to offer plans in the exchange that involve substantial out-of-pocket cost- sharing,” the report says, adding that final details still need to be fleshed out.

But nothing would take effect without approval by the legislature and governor.

Republican Gov. M. Jodi Rell is not expected to sign such legislation, as she vetoed the bill in 2009 that created this panel responsible with crafting a public option. It took a veto override (Votes: SenateHouse ) by the Democratic majority to launch SustiNet.

With Rell not seeking re-election, a new governor will consider any legislation implementing a public insurance plan. If another Republican wins the office and vetoes the plan, the Democrats’ ability to override will depend on their success in the November legislative elections. If Republicans win one more seat in the Senate, they will have enough votes to sustain a veto.

There are currently 305,000 people – or 10.4 percent of the state’s population- with no insurance, reports the Urban Institute, a national healthcare non-profit think tank. Of that population, 57,000 people are currently eligible for Medicaid but have not enrolled.

Rell has endorsed portions of the federal reform law, but only as long as it doesn’t cost the state money. The state has applied for federal reimbursements for the state’s low-income SAGA health plan – a move expected to net $49.3 million in new revenue for the state through next fiscal year if approved.

Rell also wrote U.S. Health and Human Services Secretary Kathleen Sebelius last week to inform her the state would be applying soon to create a federally subsidized high-risk pool for state residents with preexisting conditions.