If cautiously, Lamont exploring health care reform
The bar for health care reform was set high in Democratic presidential politics, first by Bernie Sanders and more recently by Elizabeth Warren. She proposed $20.5 trillion in new federal spending to replace private health insurance with her version of “Medicare for All,” though she quickly hedged on how long it might take.
On the ground in Connecticut, one of the nation’s insurance capitals, the administration of Gov. Ned Lamont is part of a new bipartisan working group exploring incremental changes aimed at halting, or at least slowing, the rising costs of health insurance premiums, prescription drugs and other elements of health care.
“You may love ‘Medicare for All’ and have an Elizabeth Warren bumper sticker on your car,” but sweeping national change is hardly at hand, regardless of who wins the White House and control of the U.S. Senate next year, said Rep. Sean Scanlon, D-Guilford, co-chair of the state legislature’s Insurance and Real Estate Committee. “We can’t wait that long.”
The involvement of the Democratic governor gives the new working group something lacking in the failed effort to pass a state health reform bill in 2019: The potential of priority status for the issue from Lamont, something that helped pass laws raising the minimum wage and authorizing the creation of a paid family and medical leave program.
“Where the 2019 bill really failed was that, number one, health care was an afterthought of the majority,” said Sen. Kevin Kelly of Stratford, the ranking Senate Republican on the Insurance and Real Estate Committee. “It was the last issue on the last day. It should have been the first issue on the first day.”
Lamont, a first-year Democratic governor, said that health care costs must be addressed, and he is closely watching the push for reform by Charlie Baker, the fifth-year Republican governor of Massachusetts and former chief executive officer of a health insurer, Harvard Pilgrim Health Care.
Connecticut pays $1.2 billion annually in health benefits for employees and state retirees who are not yet eligible for Medicare. Pharmacy costs alone for employees and non-Medicare retirees are $277 million, with another $257 million in supplemental coverage for Medicare recipients.
“You have to deal seriously with health care cost in this state,” Lamont told CT Mirror. “And I’m going to deal with it, because there is no way to solve this fiscal situation long term unless we deal with health care.”
But what that working group might produce for consideration by the General Assembly in its three-month, election-year session in 2020 is unclear. Will it be a public option? Reinsurance that could lower premiums? Importation of drugs from Canada? All of the above? Lamont is not committed to submitting a health care bill when the session begins in February.
“I won’t prejudge what people come out with,” said House Majority Leader Matt Ritter, D-Hartford, who has been skeptical about the legislature’s capacity or appetite for sweeping reform in a short session. “The governor’s support is critical. If the governor is willing to get heavily involved, that matters.”
One of the X factors is what will be competing with health care when the 2020 session opens on Feb. 5, when Lamont will propose adjustments for the second year of the $43.4 billion biennial budget adopted in June.
The administration is optimistic that a special session in January on a transportation infrastructure financing plan centered on truck tolls will resolve what has been an all-consuming issue for the first-year governor.
Comptroller Kevin Lembo, whose office manages health benefits for state employees and retirees, has been working directly with hospitals over ways to control health costs for the state.
“The public option, the ‘Connecticut Option’ we talked about, was about how to leverage some of the work we are doing here to benefit small employers,” Lembo said, referring to the 2019 legislation.
In 2019, the push by lawmakers for health care reform began relatively simply, with a measure that would have opened the state’s health plan to small companies and nonprofits, form an advisory council to guide the eventual development of a public option, and create a discount program to provide savings on prescription drugs.
In late May, Lamont unexpectedly backed a more ambitious version that would have created a “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 would have re-established the penalty for failing to comply with the federal health coverage mandate. The new state mandate was projected to raise $25 million annually in penalties.
Under the expanded bill, the state’s Office of Health Strategy would have formed an advisory committee with experts, consumer advocates and state officials to develop network criteria, designs and provider reimbursement rates. The goal was a plan that could offer 20% premium savings.
Facing opposition from insurers and cold-feet from many colleagues, the sponsors greatly scaled back the plan in the session’s last days. The final version would have allowed state officials to seek permission from the federal government to import prescription drugs from Canada and enable them to pursue a reinsurance waiver to mitigate risk from sizable claims.
It passed the House, but never came to a vote in the Senate. Republicans objected to a proposed assessment on insurers to pay for reinsurance, while Democrats said the GOP did not identify an alternative source.
Reinsurance programs provide a subsidy to health insurers to help offset the costs of enrollees with large medical claims. In a competitive market, insurers will pass this subsidy on to consumers. Kelly and Senate Minority Leader Len Fasano, R-North Haven, said that assessing insurers for the reinsurance would have defeated the purpose of the subsidy.
“It’s always thrown in my face: ‘You have to find the money,’ ” said Kelly, a lawyer who worked for 14 years as an investigator in the state Department of Social Services.
It was an $18 million to $55 million investment, and it could have provided significant relief to small-businesses struggling to provide health coverage for employees, Kelly said. The state funds would have replaced a federal reinsurance subsidy that was part of the federal Affordable Care Act, but expired after 2016.
Fasano said Democrats cut out Kelly and other Republicans from all but the earliest talks about health care in the 2019 session. “They did their rollout — and then they got slammed,” Fasano said.
The question now is whether the Republicans and Democrats can find common ground in Hartford, something that has been elusive in Washington. There appears to be bipartisan support here for at least the importation of prescription drugs from Canada.
“The governor, in my conversations with him, has been very upfront, almost enthusiastic to do something,” Lembo said. “I think that is a great starting point.”
Scanlon and others said small steps would be better than none.
“Health care is really hard, and what I learned last year was it’s not something we can accomplished in one single bite,” Scanlon said.
His insurance co-chair, Sen. Matt Lesser, D-Middletown, agrees, even if if the presidential debate is about how to get the U.S. to some form of a single-payer health system.
“We have folks who are absolute maximalists. There are folks who I love in Connecticut who are really focused on single-payer across the country, and anything short of that isn’t worth the time,” Lesser said. “I think you can also work together for incremental reform.”
U.S. Sen. Chris Murphy, a Democrat, said the states should continue to explore ways to expand access to health care, given President Donald J. Trump’s desire to repeal the Affordable Care Act, the signal achievement of his predecessor.
“I wouldn’t advise Connecticut to wait,” Murphy said. “My worry is that the president will continue to undermine the Affordable Care Act to the point where it won’t work for the people of Connecticut any longer.”
The union-financed Working Families Party has endorsed Warren and her call for a government-funded system of universal health coverage, but its Connecticut chapter is not averse to small steps that lower costs or expand accessibility.
“We are in pursuit of transformative change, but we take responsible incremental change very seriously,” said Lindsay Farrell, the executive director of the Connecticut WFP. “We believe politics has a very tangible, practical impact on people’s lives. We are not here to just make a statement. We’re here to make a tangible impact on people’s lives.”
Tom Swan, the executive director of the Connecticut Citizen Action Group, sees no conflict in pursuing incremental improvements on the state level and radical change in Washington.
“Our two-prong approach is we want to protect and expand public health and challenge the commodification of health care,” Swan said. “Health care is not a [expletive] toaster.”
During his 2006 campaign for U.S. Senate, Lamont supported the long-term goal of universal healthcare and chided U.S. Sen. Joseph I. Lieberman for failing to do. But Lamont also said then the government should take an “incremental” approach, rather than jump to a single-payer system.
Then and now, Lamont said he favors reforms that involve the insurance carriers, not replace them. And the Connecticut insurance industry remains opposed to a public option on its home turf.
“The health insurance industry remains resolute in its opposition to a public option and other proposals that seek to establish government run health care,” said Susan Halpin, executive director of the Connecticut Association of Health Plans. “State government shouldn’t position itself to compete with one of its largest employment sectors that supports 25,000 jobs here in Connecticut.”
Swan, who managed Lamont’s campaign against Lieberman, said he is waiting to see the governor get more aggressive on health care, even if it means conflicts with the insurance industry.
“Lamont’s been very disappointing on health care,” Swan said. “I’m still hopeful he’s going to get better — not good enough — but better.”
One of the governor’s top policy aides, Jonathan Dach, and Victoria Veltri, the executive director of the state Office of Health Strategy, are part of the working group meeting. The governor has yet to say how ambitious he wants the group to be.
The governor said he is intrigued by an omnibus reform bill proposed in Massachusetts by Charlie Baker, who is credited with turning Harvard Pilgrim from a failing company into one rated as the best in America by the time he left. One of the provisions would limit prescription drug price increases to 2%, plus inflation.
“Capping generic drug increases at 2 percent — I do that, I’d be a socialist,” Lamont said, laughing. “But he can do that in Massachusetts, and he is a knowledgeable guy who knows the health care industry and making a difference.”
Would he consider price controls? Will a governor’s bill be part of the health care debate in 2020?
Lamont demurred. It is too early to say.
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