SustiNet deal reached, but without a ‘public option’

The Malloy administration and Democratic legislative leaders have reached an agreement on the proposed SustiNet state-run health plan, with a deal that calls for opening the state employee health plan to municipalities and some nonprofits, but not for offering insurance to the public.

The agreement would also establish a “SustiNet cabinet” advisory panel within the lieutenant governor’s office that would be charged with overseeing health reform efforts in the state, said Ben Barnes, Gov. Dannel P. Malloy’s budget director.

The agreement does not call for the state to combine the Medicaid and state employee and retiree health plans into a large pool, as the current legislative proposal does.

Barnes said the language for the new proposal is still being developed, with existing bills and new pieces being combined.

“I doubt they’ll be passed tomorrow, but maybe next week,” he said.

The proposed SustiNet bill, which has drawn passionate support and opposition, has passed three legislative committees. It calls for combining state-funded health plans under a quasi-public authority that would also offer state-run insurance to small businesses, municipalities, nonprofits and, ultimately, anyone in the state who wants to buy it.

Supporters have argued that offering a public insurance option could provide an alternative to commercial insurance plans and use the leverage of a large insurance pool to offer affordable coverage to individuals and small businesses. Opponents have said it could threaten the insurance industry and could put the state budget at risk. A report by the legislature’s nonpartisan Office of Fiscal Analysis said the plan could cost hundreds of millions of dollars a year, although SustiNet supporters have disputed the calculations behind it.

Malloy has said that he supports the goals of SustiNet, which was developed as a universal health care plan before federal health reform passed. But he has expressed concerns about the current proposal, including about its potential cost and the idea of giving control over billions of dollars in state health care spending to a quasi-public authority.

The agreement, which Barnes said includes House Speaker Christopher G. Donovan, D-Meriden, and Senate President Pro Tempore Donald E. Williams Jr., would not include the quasi-public authority or the public option.

Starting in the next fiscal year, municipalities would be allowed to buy coverage through the state employee and retiree plan. Nonprofits that have contracts with the state would be allowed to buy in beginning the following fiscal year. The state comptroller’s office would handle the plans, and the proposed budget the administration and Democratic lawmakers agreed to would provide the comptroller’s office with additional staff to try to identify cost-saving measures and payment reforms in the state employee plan, Barnes said.

The agreement does not include allowing small businesses to buy coverage through the state employee plan, although Barnes did not rule it out for the future.

“I’m not going to say no, but not as laid out within the next two years,” Barnes said.

Whether the state health plan is ultimately expanded further will depend how the initial round of pooling goes and whether expansion is considered necessary once federal health reform rolls out, he said. As part of health reform, the state will establish a marketplace for individuals and small businesses to buy coverage, called an exchange, by 2014.

The SustiNet cabinet, an advisory panel, would be chaired by Lt. Gov. Nancy S. Wyman, who co-chaired the board that created the SustiNet proposal. Other members would include agency commissioners, appointees of the governor and legislative leadership, and members of the existing SustiNet board. It would make recommendations and advise the governor, Barnes said.

“It will be charged with carrying out research and policy development, and will have access to staff and to federal resources that are available to advance that project,” he said.

The specific statutory language on the SustiNet cabinet has not yet been worked out, Barnes said.

“This deal has a few players to be named later, so to speak,” he said. “We’ve sort of fleshed out the framework.”

SustiNet supporters fought hard for the plan, lobbying Malloy at town hall meetings across the state. Many backers have said they consider federal health reform too limited and see the public option as necessary to any deal they would support. The agreement does not include a public option, although it does give SustiNet a continued presence and a role in shaping future health reform efforts.

Ellen Andrews, executive director of the Connecticut Health Policy Project and a member of the group that developed the SustiNet plan, said she was glad there will be a SustiNet cabinet. But she said she was disappointed, though not surprised, that the agreement does not include a plan for covering the uninsured.

“That was kind of the whole point of this from the beginning,” she said. “That’s where the political momentum came from.”

SustiNet was originally envisioned as Connecticut’s plan to cover the uninsured, she said. When federal health reform passed, it became the state’s plan for a public option.

Now, she said, the plan appears to put together groups of people who already have insurance–potentially good for municipalities, she said, but not her uninsured clients.

“If all they’ve accomplished is putting different groups of people who have really good insurance together but not expanding to the uninsured, they haven’t  helped my clients,” she said. “And I think we really need a public option. Especially in 2014 when we have an individual mandate, there has to be a public option to protect people. But hopefully they’ve left the door open for that.”

Donovan, who has supported the SustiNet proposal, characterized the plan as not finalized.

“We’re still talking about it, but the idea is to move forward,” he said. “We’re not finalized what it is but we’re going to move ahead while we’re still working on it.”

Donovan acknowledged that the plan includes pooling and a group that would look at ways to make health care more affordable and better use existing health care resources.

Jeannette DeJesús, special advisor to the governor for health care reform and a deputy commissioner of public health, who has taken the lead on implementing federal health reform, said she was glad there is an agreement to move forward.

“I’m pleased that we have been able to recognize the importance of SustiNet and that we are able to move forward now in implementing health care reform in a way that is inclusive and comprehensive,” she said.