Insurance coverage mandates would face more analysis under Malloy proposal
As they do most years, Connecticut legislators are considering a host of proposals that would expand what health insurance plans must cover. This year’s proposed coverage mandates include inpatient substance abuse treatment, breast pumps, insulin jet injectors for people with diabetes, and fertility preservation for people with cancer.
Patients who testify in support of proposed benefit mandates often share stories about struggles they faced getting needed care or medications. And critics warn legislators that adding mandates increases the cost of insurance premiums. In some cases, they also take issue with the merits of the particular service being considered for mandatory coverage.
But Gov. Dannel P. Malloy is seeking to change how coverage mandates are handled. Under a bill the Democratic governor proposed, the General Assembly, starting next year, would be prohibited from creating any health benefit mandates unless they have first gone through a review focused on, among other things, the cost, effectiveness, safety, current availability, and impact on health care costs and insurance premiums of the particular treatment or service.
The idea is to give legislators the information to determine if the proposed benefit change would “come at a cost to consumers or provide savings,” said Chris McClure, a spokesman for Malloy’s budget office.
The concept drew praise from the top Republican on the legislature’s Insurance and Real Estate Committee. But Senate President Pro Tem Martin M. Looney, D-New Haven, who frequently proposes and testifies in support of insurance bills, described the measure as unnecessary and an inappropriate extension of executive branch power into legislative matters, and said the timing is problematic.
“We may need a lot of additional flexibility in terms of mandates and other things if the Affordable Care Act is repealed,” Looney said.
Malloy’s proposal would limit how many potential benefit mandates could go through the review process each year, allowing the Insurance and Real Estate Committee to select up to five. The insurance commissioner would contract with the UConn Center for Public Health and Health Policy or an actuarial firm to conduct the reviews.
State law already allows for a health benefit review program for existing or proposed mandated health benefits, but the reviews are not required before a potential mandate becomes law, and are only conducted at the request of the insurance committee.
McClure said the process is “seldom used,” because it doesn’t match the timing or needs of the legislature.
“We want to make the process easier and more accessible, so that the legislature has more comprehensive information when considering policies that may increase the cost of healthcare for consumers and small businesses,” he said.
The most recent report from the existing health benefits review program estimated that the cost of mandates in each person’s monthly insurance premium ranged from $36.72 for coverage of cancer to virtually no cost for several benefits, including hearing aids for children 12 and under, and hypodermic needles or syringes. (For the full list, see the chart at the bottom of the story.)
State benefit mandates affect only a portion of the state’s insurance market, because many large employers and an increasing number of smaller companies self-insure their benefits, making their plans not subject to state regulation. As a result, advocates for small businesses say, mandates add costs to those that are often least able to absorb them – people who buy coverage on their own and small companies.
Jennifer Herz, counsel for the Connecticut Business & Industry Association, said it makes sense for potential benefit mandates to undergo a review to make clear the merits and cost implications, particularly at a time when many people worry about the cost of health care. While addressing mandates won’t solve the health care cost problem, Herz added, it is a tool Connecticut has to help control costs.
Herz said she understands the appeal of proposals to expand coverage requirements.
“It’s very compelling when you hear someone struggle through the health care system. We all can relate to that from our own frustrations, and I think that resonates,” she said. “What’s often left out of that discussion is some of the realities of what changes can mean.”
In some cases, she added, it’s not clear if the stumbling blocks individuals faced were really the result of insurance benefit limitations.
And Herz said setting up a process for handling proposed mandates would send a message to small businesses that lawmakers are listening to them. Many CBIA members are concerned by the number of proposals they see each year that they consider unfriendly to business – a message that resonates even if the bills ultimately don’t become law, she said.
Looney acknowledged that some mandates can add costs. But he said that in some cases, it’s a miniscule amount, since few people need the benefit or the treatment is relatively inexpensive. And Looney said cost considerations need to be balanced against the importance of a particular treatment to individuals, for whom it could mean the difference between life and death or poverty and financial security.
The existing process already allows lawmakers to get data on the potential impact of mandates, he added.
And Looney said that by requiring the legislature to involve the insurance department in its decisions, Malloy’s proposal amounted to “an executive branch power extension at the expense of the legislature.”
“The governor can always choose to veto a bill that has additional mandates in it,” Looney said.
Sen. Kevin Kelly, co-chair of the Insurance and Real Estate Committee, said he liked the proposal, and said it would give legislators more information before they act. It also would help signal to the public and the insurance industry what mandates legislators will be considering the following year, he said, allowing for a more meaningful conversation.
But Kelly, R-Stratford, said he’d like to see some tweaks to the bill, including possibly allowing more potential mandates to be reviewed each year, and broadening the requirement to include proposals to limit copayments or to regulate network coverage.
“What we’ve got to look at is cost drivers to health insurance, and so I’d like to see the bill go a little further in those areas,” he said.
The insurance committee is holding a public hearing on the bill Thursday, Feb. 23, at 1 p.m. at the Legislative Office Building in Hartford.
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