Both sides praise health insurance rate review compromise

They started on opposite sides of the issue, but State Healthcare Advocate Victoria Veltri and Insurance Commissioner Thomas B. Leonardi are both praising an agreement reached last week that resurrects key pieces of a vetoed bill to increase oversight of health insurance rate hikes.

In fact, Veltri and Leonardi said the deal–an agreement to hold up to four public hearings on certain proposed rate increases–was better than the bill that Gov. Dannel P. Malloy vetoed.

The agreement marks the latest wrinkle in a much-disputed issue that has pitted consumer advocates against insurance companies. It averted any possibility of Democratic lawmakers, aided by Republicans, overriding the veto of a Democratic governor in a session held Monday, and helped blunt the criticism of the governor by bill supporters who accused him of not sticking up for consumers.

It also showcased what Leonardi and Veltri call a good relationship between them, despite their having positions that at times put them in conflict.

“I think, actually, what we’re getting in the compromise in a lot of ways is more substantive than the actual bill,” said Veltri, who has pushed for legislation to require public hearings on double-digit health insurance rate hikes. Under the compromise, Leonardi agreed hold up to four public hearings at Veltri’s request on proposals to raise health insurance rates for individual or small group HMO plans by 15 percent or more.

If the resolution was unusual, it wasn’t the only unusual thing about the course the bill took.

Consumer advocates who lobbied for the bill had considered it unlikely to win legislative approval. Instead, an amended version passed the Senate on one of the last nights of the session. On the final day, it passed the House 131 to 14.

The bill drew fierce opposition from health insurers, but won the support of every Republican who voted on it. One Republican source said it was payback for insurance executives who supported Malloy’s budget even before the GOP released its budget proposal, although Senate Minority Leader John P. McKinney, R-Fairfield, said his party’s support reflected concern for small businesses and wasn’t directly linked to the insurance executives’ support for the governor’s budget. McKinney said last week’s agreement, which he was not involved in, gave Democrats cover for not overriding the veto but appeared to be inferior the bill itself.

The bill that passed the legislature would have allowed the healthcare advocate or attorney general to order public “symposiums” if an insurer sought to raise premiums by more than 10 percent on health or long-term care insurance. Before being amended, it had called for mandatory public hearings on rate hikes of 10 percent or more.

In vetoing the bill, Malloy called the symposiums “unnecessary and expensive,” and said the insurance department’s process for reviewing proposed rate increases already fully protects consumers. He also warned that the bill could reduce competition in the state’s insurance market by imposing stricter, less predictable review standards than other states, potentially leading some insurers to stop doing business in Connecticut.

Some of Malloy’s concerns about the bill echoed those of his insurance commissioner. Leonardi called the amended bill an unnecessary mandate and raised a more fundamental disagreement about the role of public hearings. While there are some times when the political environment requires a public hearing, he said, if the department is doing its job and reviewing proposals in an actuarially sound way, hearings are not going to drive the decisions.

But after the veto, Leonardi and Malloy’s chief of staff, Tim Bannon, began meeting with Democratic lawmakers on a way to salvage pieces of the bill. Veltri took part in later negotiations.

Asked about his thinking in pursuing a compromise on a bill that had already been vetoed, Leonardi spoke of reports that legislators were considering a veto override. “My feeling is this compromise is far better than the bill that the governor vetoed,” he said.

It’s not clear how serious the possibility was of a veto override. McKinney said Senate Republicans made clear that they would continue to support the bill if there was an effort to override the veto, but he never got any indication that Democrats were seriously considering an override. Senate Majority Leader Martin M. Looney, D-New Haven, said Senate leaders never took a headcount on a veto override.

More clear was the criticism Malloy was taking over the veto. Some critics accused him of favoring insurance companies–which he sees as a source for job growth–over consumers.

Roy Occhiogrosso, the governor’s senior adviser, said there was agreement between the governor’s office and legislative leaders that it would be possible to meet the bill’s objectives without overriding the veto, and the governor asked those who got involved to find a way to do so.

“I think everyone sort of agreed that figuring out a way to strike that delicate balance between protecting consumers, giving consumers access to the process but also not wanting to do harm to an industry that is as important to Connecticut as the insurance industry, that was the goal,” he said.

Despite their differences on the underlying bill, Leonardi, Veltri and Looney said the agreement was better for having public hearings, rather than symposiums, which were included in the bill as a way to avoid the costs that come with hearings. Sen. Joseph J. Crisco, Jr., the Insurance and Real Estate Committee co-chairman and the legislature’s main advocate for the rate review bill, called the agreement “a first step.”

Leonardi said it was important to him to try to keep the cost of public reviews down and to have hearings “that are really meaningful hearings,” rather than symposiums.

“Everybody’s trying to do the same thing, I think,” he said. “Everybody’s trying to provide quality health care and fairness to consumers, and it’s safe to say that people can have reasonable disagreements on how best to get to the final result.”

As commissioner, Leonardi noted, he has the authority to call hearings on rate requests at any time. He also pointed to the requirement under federal health reform that individual and small group insurance plans must spend at least 80 percent of each premium dollar on medical care and health care quality improvement; those that don’t must give consumers rebates.

Veltri said the agreement achieved what advocates really wanted: Public hearings on rate increases.

“I think we ended up with a very good compromise, and in the end, I think everybody agreed that some level of additional scrutiny would help the process,” she said.

The limit of four requested hearings is reasonable, Veltri said, because there are limits to the resources her office has to participate in hearings.

As for the threshold, 15 percent increases, she said, “I would love to have seen it stay at 10, but I think 15 is a fair compromise. Given the fact that there are only four hearings, we will be picky and choosey anyway.”

Not everyone was pleased.

McKinney said the agreement appears to rely on several contingencies before a hearing can be held. “There’s a lot of ifs, and I think the legislation would have been a lot better than this agreement that’s been reached,” he said.

There was speculation when the bill was still pending that Malloy would not support it, McKinney said, since insurance executives who signed a letter supporting the governor’s budget opposed the rate review bill.

He described the Republican support for the bill as support for small businesses, many of which struggle to afford health insurance.

“Let’s be candid. I think Republicans get branded as the quote unquote party of business, and Democrats get branded as the party of labor, and while I don’t shy away from that, I think that what people have missed in that sort of generic branding is that we as Republicans understand it’s really the small businessman and woman that need our help, and we don’t need to do favors for these multinational mega corporations,” McKinney said.

The deal is not law, and some advocates of the bill have already pledged to push for legislation next session. Veltri said it will depend how the hearing process goes.

“It’s a first step in a very positive process, and if it doesn’t work out, then we’ll have to readdress the issue when we come back in February,” Crisco said. “It may not be necessary.”