Democrats unveil sweeping overhaul of public option bill

Supporters of a controversial effort to create a public health insurance option announced a new and dramatically expanded proposal Thursday that would establish the “Connecticut Option” – a state-sponsored plan offered to individuals and small businesses that don’t have employer-subsidized coverage.

To help pay for it, lawmakers want to re-establish the penalty for failing to comply with the federal health coverage mandate. The bill would effectively reverse– in Connecticut– Congress’ decision to remove the edict in the Affordable Care Act that all adults have health insurance, either through their jobs, Medicaid or by purchasing it directly.

The statute would create a state mandate, which proponents estimate would raise $25 million annually in penalties paid by those who don’t comply with the requirement.

Under the expanded bill, which is expected to be called in the House next week, the state’s Office of Health Strategy would form an advisory committee with experts, consumer advocates and state officials. The group would develop network criteria, designs and provider reimbursement rates to guarantee a 20 percent premium savings compared to plan rates in 2020, officials said.

The state comptroller’s office would seek bids and contract with one or more insurers to bring the Connecticut Option “as a publicly sponsored competitor” to individual and small group markets. All carriers offering plans on the state’s insurance exchange would be required to include the Connecticut Option.

Lawmakers are aiming for a January 2022 rollout.

“It is the most ambitious health care package any state has considered. It helps those folks who are falling through the cracks.”

Sen. Matthew Lesser, D-Middletown

“Many of us are familiar with a usual path of legislation, which is, it starts off strong and then it gets watered down,” said Sen. Matthew Lesser, D-Middletown, a key backer of the measure. “I think this bill that we’re talking about went the other way.”

Lesser, who spearheaded the bill with Rep. Sean Scanlon, D-Guilford, called the move a “comprehensive attempt at health care reform” that would “blaze a path forward for other states to follow.”

“It is the most ambitious health care package any state has considered,” he said. “It helps those folks who are falling through the cracks.”

Legislators are also suggesting raising revenue for the program by levying a 1-cent-per-milligram tax on opioid manufacturers. The tax would be imposed not at the retail level, but at the first point of sale – when manufacturers sell the drug to distributors. It would raise about $20 million per year, according to the comptroller’s office.

“Governor Lamont says his door is open. To whom? People who think like him? … How do you have a press conference on one of the most significant changes to health care law … without ever having, at the very least, any conversation with the minority party?”

Sen. President Pro Tem. Len Fasano 

Critics of tax hikes on drug manufacturers have warned this could lead to higher insurance premiums for consumers. That’s because drug companies would seek to recoup their losses by charging higher prices to their customers – health insurers – who, in turn, would pass the cost onto consumers.

“It’s disappointing that, despite the biopharmaceutical industry’s repeated attempts to put forward solutions to lower [people’s] costs at the pharmacy counter, Governor Lamont would call for unworkable changes … at the last minute,” the Pharmaceutical Research and Manufacturers of America wrote in a statement. “Putting forward a tax on medicines that meet legitimate medical needs is not an appropriate way to fund the governor’s priorities that have nothing to do with the opioid crisis in Connecticut.”

One of the linchpins of the new proposal is an effort to “cap” rising costs in all elements of the health care market: providers, insurers, drug manufacturers and others.

Any entity that exceeds the cap would be required to submit a plan to the state Office of Health Strategy on how it would bring costs back under the limit. And while the bill doesn’t include sanctions, Comptroller Kevin Lembo said the system still has teeth. Failure to comply could lead to legislative hearings and other uncomfortable public exposure.

“Outliers in price are going to be identified,” he said. “Some call it shaming; some call it an accountability conversation. But it can lead to change.”

If the system ultimately needs sanctions to bring violators into line, Lembo said, that option remains open.

Another component of the measure would effectively reverse a major cutback in the state’s Medicaid program for working poor adults.

An estimated 26,000 adults became ineligible for HUSKY A coverage in 2016 after legislators tightened income restrictions. In statute, the limit dropped from 185 percent of the federal poverty level to 150 percent. But because certain earnings aren’t counted, the effective limit dropped from 201 percent of the poverty level to 155 percent.

That meant families of three earning between $40,380 and $31,139 lost coverage.

Health care advocates say most of those cut from HUSKY A cannot afford to buy insurance on the state’s health care exchange. The measure would restore eligibility at or close to 170 percent, returning coverage to a majority of those who lost it.

The bill also allows state officials to seek permission from the federal government to import prescription drugs from Canada at “greatly reduced” prices. Similar laws have passed in Vermont, Florida and Colorado.

The legislation unveiled Thursday replaces three measures introduced previously – one that would have opened the state health plan to small companies and nonprofits; another that would have permitted the state to form an advisory council to guide the development of a public option; and a third that would have created a discount program to provide savings on prescription drugs.

The proposals have been opposed by the Connecticut Business and Industry Association and others who say a public option threatens the state’s economy with the loss of thousands of jobs. It could also drive insurance titans like Aetna, Cigna and United Healthcare out of the state, they have warned.

Legislators said they did not yet have a price tag for creating the public option.

Republican lawmakers fumed Thursday, claiming they were locked out of discussions on the revised bill and chiding Democrats for floating a drastically different plan with less than two weeks left in the regular session.

Asked if they would filibuster the measure, Sen. President Pro Tem. Len Fasano said: “There will certainly be a lot of questions.”

Gov. Ned Lamont has come out in support of the new proposal.

“What we saw today … has got to be the epitome of the arrogancy of the Democratic party in this building,” Fasano said. “Governor Lamont says his door is open. To whom? People who think like him? … How do you have a press conference on one of the most significant changes to health care law … without ever having, at the very least, any conversation with the minority party?”

“This is a huge change,” he added. “There’s no public hearing, no testimony. There’s no evidence that this is good or bad.”

Maribel La Luz, a spokeswoman for Lamont, said Thursday’s press conference outlined the latest updates to bills that were raised much earlier in the session.

“This is not a brand new topic,” she said. “Let’s not pretend affordable health care has not been a topic of conversation for years in Connecticut.”