SustiNet backers, Malloy administration reach agreement

Leaders of the push to create a SustiNet state-run health plan have reached an agreement with the Malloy administration and Democratic legislative leaders, with a plan that includes examining but not committing the state to a public insurance option.

“This is a very significant step forward in terms of health care reform for the state,” said Juan A. Figueroa, president of the Universal Health Care Foundation of Connecticut, which has led the campaign for SustiNet.

The agreement is similar to a compromise reached last month between the administration and legislative leaders that called for allowing municipalities and some nonprofits to buy into the state employee health plan and creating a SustiNet cabinet to oversee health reform efforts. SustiNet supporters criticized the deal for failing to provide a state-run insurance plan that would be offered to the public–the so-called “public option.”

Under this plan, the cabinet, known as the Governor’s SustiNet Health Care Cabinet, would develop a business plan for implementing state and federal health reform and could look at other models for providing health care coverage.

“We’ve made a commitment to look at alternatives to private insurance and to evaluate options and create a business plan,” said Jeannette DeJesús, the governor’s special advisor for health care reform and a deputy commissioner of public health. “We’re moving forward together with a commitment to work together on health care reform in a very comprehensive way.”

The plan would also create an Office of Health Reform and Innovation to coordinate state and federal reform efforts.

Figueroa said the plan creates the framework necessary for the state to move forward with health reform, including possibly a public option.

“We feel very comfortable…that this framework will allow the SustiNet process to move forward to where it needs to go,” Figueroa said.

Creating a business plan, he said, “makes total sense as a concrete next step.”

The original SustiNet proposal this year would have joined the health plans the state currently pays for–including the state employee and retiree plan and Medicaid–under a quasi-public authority. The authority would then offer insurance to small businesses, municipalities and nonprofits, and ultimately, to anyone in the state who wanted to buy it.

Supporters said SustiNet could slow the growth of health care spending and provide an alternative to private insurance. Opponents argued that it could cost the state money and send the wrong message to the insurance industry at a time when Gov. Dannel P. Malloy wants it to add jobs in the state.

Since taking office, Malloy has said he shares the goals of SustiNet supporters, but he raised several concerns with the proposal, including the idea of giving a quasi-public agency control over more than $5 billion in state health care spending. An adviser said Malloy also had reservations about committing to a public option this year.

The agreement with SustiNet supporters would not commit the state to creating a public option, but keeps the idea alive.

According to draft language for the proposal, the SustiNet cabinet would be charged with developing a business plan for implementing state health reform and provisions of the federal health reform law.

“Such business plan may include (1) an assessment of various models for providing health care coverage, including, but not limited to, for profit and nonprofit organizations, insurance cooperatives, or self insurance, and (2) appropriate implementation recommendations for the Governor’s consideration,” the draft says.

The cabinet, which would have 21 members and be led by Lt. Gov. Nancy S. Wyman, would also be responsible for evaluating the feasibility of creating a state-run basic health plan to cover low-income residents who do not qualify for Medicaid, identify opportunities and gaps created by federal health reform, coordinate health care delivery system reforms with the Office of Health Reform and Innovation, and examine ways to ensure there is an adequate health care workforce.

DeJesús, who is leading the state’s effort to implement federal health reform, would lead the Office of Health Reform and Innovation. In addition to coordinating and implementing federal and state health reforms, the office would be charged with finding funding to implement federal reform and improve access to health care, reduce costs and improve the quality of health care in the state. It would be located in the lieutenant governor’s office and would have a consumer advisory board. Both that office and the Office of the Healthcare Advocate would provide staff to the SustiNet cabinet.

As part of the agreement, municipalities and other public employers, including boards of education and quasi-public agencies, would be allowed to buy insurance through the state employee and retiree health plan beginning July 1, and nonprofits that contract with the state would be allowed to buy in July 1, 2012.

Keith Stover, a lobbyist for the Connecticut Association of Health Plans, which opposed SustiNet, said the agreement seems to rightly focus on planning for and implementing federal health reform.

As for the evaluation of alternative insurance models, he said, it’s fine as long as it’s a real evaluation, not an attempt to reach a predetermined conclusion.

“The idea of an evaluation that is designed to evaluate, as opposed to an evaluation that is predesigned to generate an outcome, those are two very different things, and we’re ok with the former, not ok with the latter,” he said. “My sense is that this is the former.”

Figueroa said the office devoted to coordinating health reform, the cabinet and the charge to create a business plan are three concrete steps toward figuring out whether a public option makes sense and what form it would take.

“That’s where we’re headed with this,” he said. “It’s concrete, it’s real and everybody’s on board.”

He said the agreement should be viewed in the context of other efforts including the creation of a health insurance exchange, the marketplace for buying insurance that will be established as part of federal health reform, and a proposal to allow the state comptroller’s office to gather health insurance information and play a role in spurring delivery system changes. Taken together, he said, “That’s a fairly significant health care reform.”

DeJesús said the agreement will allow officials to “take advantage of the work that SustiNet has done and we’re going to bring the resources of the governor’s office and the governor’s vision on health care reform.”

Developing the structures for moving forward is important, but the real work will be to improve health care quality and outcomes, reform the way health care is delivered, and examine how health reform will affect populations that have not traditionally had access to care, DeJesús said.

“I’m very anxious to get moving on the more meaningful aspects of health care reform,” she said.