Public option hits rocks, key components stripped from bill

A contentious, late-stage proposal to create a public health insurance option began to fracture Wednesday, as lawmakers acknowledged that key portions of the bill would be stripped before the measure comes up for a vote in the House.

New, state-sponsored plans for individuals and small businesses, which would have been rolled out in 2022 if the legislation succeeded in its latest form, are expected to be removed from the bill, along with a provision to re-establish an individual mandate, its proponents said.

What triggered the revisions is less clear. The Hartford Courant reported Wednesday that Comptroller Kevin Lembo claimed a threat from Cigna to move out of state had derailed the public option. But a spokesman for Cigna denied that a threat had been made, and Lembo made himself unavailable after his visit to The Courant.

“There was some interpretation of what was perceived to have been said, which was not accurate,” Cigna spokesman Brian Henry said. “We have never said any such thing, that we are making a threat or otherwise planning to leave the state.”

The company has expressed fierce opposition to the measure. Henry called it “ill conceived” and said the proposal “threatens the long-term viability and vitality of the state.”

Cigna has no customers on the small group or individual markets in Connecticut. When asked why the company had raised such strong objections, Henry replied: “Generally speaking, this is something that would not be helpful to businesses that provide health insurance.”

Deb Hutton, a senior director for government affairs at Cigna, made calls Tuesday to Ryan Drajewicz, Gov. Ned Lamont’s chief of staff, and the bill’s two sponsors, Rep. Sean Scanlon and Sen. Matthew Lesser, to strongly warn against its passage, according to sources familiar with the talks.

They said Hutton, a former chief counsel to the House Republican caucus, told Drajewicz and the legislators that Cigna would re-evaluate its place in the state if the measure passed. At least one of the legislators interpreted the call as a push for revisions, not an actual threat.

The call from Hutton surprised the governor’s staff. Maribel La Luz, Lamont’s communications director, said the governor had spoken by telephone with Cigna CEO David Cordani about the bill three times before Lamont joined Lembo, Scanlon, Lesser and others at a press conference to endorse the measure.

The Courant quoted Lembo, who apparently was characterizing calls made to other officials, as saying Cordani threatened to send Lamont a public letter with a warning that Cigna leaders would “reconsider where they’re domiciled” if the bill moves forward.

“Domiciled” is an industry term referring to the state where a company has been issued its primary license, not where it is headquartered.

Lembo’s public statement about Cigna had the immediate result of complicating the bill’s passage, and it left him at odds with the Lamont administration and his Democratic legislative allies on the issue.

Last week, Lamont and lawmakers unveiled an updated and dramatically expanded public option bill.

In it, they proposed crafting a state-sponsored plan for individuals and companies with 50 or fewer employees.

To help pay for that, lawmakers wanted 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.

Proponents had estimated the mandate would raise $25 million annually in penalties paid by those who didn’t comply with the requirement.

The wide-ranging bill also includes 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 is expected to raise about $20 million per year, according to the comptroller’s office.

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 $31,139 and $40,380 lost coverage. The measure would restore eligibility at or close to 170 percent, returning coverage to a majority of those who lost it.

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

Lesser and Scanlon said Wednesday that some of the bill’s critical aspects will remain intact when it comes up for a vote. The opioid tax and drug importation plan are expected to remain in the measure, and the HUSKY A expansion could be rolled into a budget implementer.

“Pieces of our bill are not going to move forward, but the overall health care reform effort is very much still alive,” Scanlon said. “We’re going to dig down and see what we can do and what we can’t. There are parts we have to press pause on for this year and let conversations continue.”