A proposed public health insurance option didn’t get through the legislature last year, but some supporters are planning to try again this year.
Creating a publicly administered health insurance plan is among the recommendations of a working group on small business health care, established by House Speaker Christopher G. Donovan and led by Rep. Robert Megna, D-New Haven, co-chairman of the legislature’s Insurance and Real Estate Committee.
The group found that small employers and the self-insured lack leverage, purchasing power and the ability to benefit from a larger risk pool, according to a report issued Monday. It also determined that many health insurance products available give only modest benefits for a high price, and linked the challenges that small businesses face to, in part, a lack of competition in the market.
Donovan was a lead proponent last year of a controversial proposal, known as SustiNet, that would have created a state-run insurance plan that would be available to the public. The proposal drew opposition from insurers and business groups, and Gov. Dannel P. Malloy raised concerns about its potential cost.
A compromise that ultimately passed allowed municipalities and some nonprofits to buy coverage through the state, and created a cabinet to make health policy recommendations, including about the possibility of creating alternatives to private insurance.
Donovan’s working group did not endorse reviving last year’s SustiNet proposal, but its recommendations contained many of the same ideas, including allowing small businesses to buy health insurance through the state employee plan.
Other recommendations, which will now be drafted as legislation, include:
• Promote initiatives to help employers and health care consumers compare costs and strategies to manage health as a way to improve transparency in health care costs.
• Change the way small group insurance rates are determined to prohibit insurers from setting premiums based on the age, gender or other demographics of the people in a particular group.
• Require insurance carriers to offer policies to association groups that seek it.
• Require insurance carriers to report the actuarial value of a plan to the purchaser beginning this year. Actuarial value refers to the portion of covered health care costs that the plan, as opposed to the members, pay. To meet the individual coverage mandate under federal health reform, policies must cover at least 60 percent of the costs, and the report argues that employers whose plans don’t currently meet that threshold need to know and have time to plan for an alternative.
• “Strongly” consider merging the individual and small group markets.
• Consider offering a state-run basic health program for low-income state residents whose incomes fall just above the threshold for Medicaid.
Some of those ideas are being considered by other state health policy bodies, including the cabinet established through the SustiNet compromise and the board that oversees the state’s health insurance exchange, which is in charge of creating a marketplace for people to buy health care coverage as part of federal health reform.