Gov. Dannel P. Malloy used one of his first vetoes on a controversial bill that would have created a new public review process for proposals to increase health or long-term care insurance rates.

In his veto message, Malloy called the bill, which drew support from consumer advocates and fierce opposition from the insurance industry, “bad for the people of Connecticut.”

The bill was one three bills Malloy vetoed Friday and announced Tuesday. The other vetoed bills would have exempted police from telecommunications training and changed the standard for reviewing the siting of proposed television and cell towers.

Malloy also signed into law controversial proposals to require some employers to provide paid sick leave for their workers and outlaw discrimination against people who are transgendered, and a measure establishing a state health insurance exchange, a marketplace for buying insurance required under the federal health reform law.

Each were high-profile measures passed with the strong backing of the administration, but they were signed without public ceremony, due to the press of business. A signing ceremony for paid sick days is being scheduled, one of about 80 bills the administration is being asked to so commemorate.

Another health care bill, which contained the provisions of a compromise on the controversial SustiNet plan, will become law without Malloy’s signature; he returned it unsigned. The bill would allow municipalities and some nonprofits to buy health insurance through the state.

Malloy spokeswoman Colleen Flanagan said the governor was out of the office Friday afternoon, when the bill was due to the secretary of the state, and could not make it back in time to sign it. “He’s happy to do a ceremonial signing if that clears up any lingering questions,” she said.

SustiNet played a role in the debate over a concession deal between the Malloy administration and state employee union leaders, which failed to win ratification.

The original SustiNet proposal would have created a quasi-public authority to oversee state-funded health plans, including the state employee and retiree plan, and develop insurance to sell to the public. Some opponents of the concession deal said that health care changes in the deal would have been part of a move toward SustiNet–something administration officials and union leaders have said is not true.

The health insurance review or “symposium” bill Malloy vetoed was an amended version of an earlier proposal that would have required public hearings on any proposals to raise health or long-term care insurance by more than 10 percent. The version that passed the legislature would have allowed the attorney general and healthcare advocate to order “symposiums” on proposals to increase health insurance rates by 10 percent, or to raise long-term care insurance rates.

Consumer advocates have said the rate review process needs to be more transparent and criticized the Connecticut Insurance Department for not holding more hearings on proposed rate hikes. Some said that public hearings have been key in past decisions to reject rate hikes.

The insurance industry, meanwhile, criticized the proposal and warned that it could jeopardize the state’s insurance market. Malloy’s appointed insurance commissioner, Thomas B. Leonardi, also opposed it, calling the bill an unnecessary mandate. He has also said that while public hearings have merit, actuarial review, not the hearings, should determine whether a rate proposal is approved or rejected.

In his veto message, Malloy wrote that the bill would not reduce the cost of insurance premiums and said that the insurance department already performs objective, actuarial analyses on rate proposals and regularly rejects those that are not actuarially warranted. “The current process fully protects Connecticut’s residents from excessive and discriminatory rate increases,” he wrote.

He also cited the insurance department’s inclusion of rate filing information in its website, which allows consumers to review all documents associated with a proposal to raise rates. Consumers can use the site to submit comments to the insurance department, which Malloy said was “a far better and more cost-effective system to facilitate transparency in the rate review process than mandatory public symposiums.”

He also raised concerns about the bill’s potential cost, and called the symposium process “unnecessary and expensive.”

Under the federal health reform law, Malloy wrote, the U.S. Department of Health and Human Services has developed regulations for reviewing rate proposals, which the state insurance department already meets. “HHS has concluded, as I do, that a mandatory public hearing process will not improve the rate review process,” Malloy wrote.

In addition, Malloy wrote, the bill could have a “significant long-lasting negative impact on Connecticut’s residents, by driving out competition in the state’s insurance market.”

Few if any other states would likely adopt rate review standards that are more burdensome than what the federal government requires, he said, and Connecticut’s adoption of “much more onerous and less predictable” standards would cause uncertainty and would likely lead insurers to reduce the number of products available to state residents. That would lead to less competition, raising the cost of health insurance in Connecticut, Malloy concluded.

Malloy’s veto, and the reasoning behind it, drew praise from Keith Stover, a lobbyist for the Connecticut Association of Health Plans. The association opposed the bill largely because the state’s existing rate review process is “quite robust,” he said.

“And we felt pretty strongly, given the obvious and significant transition that’s underway in health care, that this is hardly the time to revamp rate review, particularly in a way that didn’t seem to be especially well thought out,” he said.

Others criticized the veto.

Karen Schuessler, director of Citizens for Economic Opportunity, which pushed for the bill, said she plans to look into whether it would be possible to override the veto. The bill passed unanimously in the Senate and 131 to 14 in the House.

“The governor is protecting the insurance commissioner, not the consumers of Connecticut,” she said. Schuessler also took issue with several parts of Malloy’s veto message that she called distortions, including the concern about cost, since the insurance department is funded by an assessment on insurers, not the state general fund.

Malloy also said the bill conflicted with the federal health reform law, which several bill supporters said was not true.

The federal reform law “provides the floor for the rate review process, but states are free to enact tighter requirements on rate review,” said state Healthcare Advocate Victoria Veltri, who pushed for the bill and previous versions in past years.

The bill would also have required that consumers be given advance notice of what their rate increases would be if a request was granted. Without it, Veltri said, consumers have little time to provide meaningful public comment, or to shop for other policies.

Jennifer Jaff, executive director of Advocacy for Patients with Chronic Illness, said she was “very disappointed” by the veto.

“I do not believe that we can get a grip on escalating health insurance premiums in Connecticut without public hearings,” she said. “The Governor generally favors transparency; however, he has just ensured that health insurers in Connecticut–and, indeed, the workings of his own Insurance Department–will remain shrouded in secrecy.”

Nothing in the legislation conflicted with the state’s ability to regulate rates, she said. And she noted that other states have rigorous rate review processes and have not driven companies out of their insurance markets.

“I disagree with the facts as stated by the Governor, and with all due respect, I believe this decision is not only wrong, but quite contrary to the interests of Connecticut’s consumers,” she said.

Arielle Levin Becker covered health care for The Connecticut Mirror. She previously worked for The Hartford Courant, most recently as its health reporter, and has also covered small towns, courts and education in Connecticut and New Jersey. She was a finalist in 2009 for the prestigious Livingston Award for Young Journalists, a recipient of a Knight Science Journalism Fellowship and the third-place winner in 2013 for an in-depth piece on caregivers from the National Association of Health Journalists. She is a 2004 graduate of Yale University.

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