Connecticut Public Radio
Gov. Ned Lamont, center right, joined lawmakers at a press conference in May endorsing the ultimately unsuccessful public option bill. Mark Pazniokas /

Health care costs were rising. People couldn’t afford coverage. So, in Connecticut, state lawmakers took action.

Their solution was to attempt to create a public health insurance option, managed by the state, which would ostensibly serve as a low-cost alternative for people who couldn’t afford private plans.

Immediately, an aggressive industry mobilized to kill the idea. Despite months of lobbying, debate and organizing, the proposal was dead on arrival.

“That bill was met with a steam train of opposition,” recalls state Rep. Sean Scanlon, who chairs the legislature’s insurance and real estate committee.

Through a string of presidential debates, the idea of a public option has been championed by moderate Democrats ― such as former South Bend, Ind., Mayor Pete Buttigieg, Minnesota Sen. Amy Klobuchar and former Vice President Joe Biden ― as an alternative to a single-payer “Medicare for All” model. Those center-left candidates again touted the idea during Tuesday’s Democratic debate in South Carolina, with Buttigieg arguing such an approach would deliver universal care without the political baggage.

The public option has a common-sense appeal for many Americans who list health care costs as a top political concern: If the market doesn’t offer patients an affordable health care insurance they like, why not give them the option to buy into a government-run health plan?

But the stunning 2019 defeat of a plan to implement such a policy in Connecticut — a solidly blue, or liberal-leaning, state — shows how difficult it may be to enact even “moderate” solutions that threaten some of America’s most powerful and lucrative industries. The health insurance industry’s fear: If the average American could weigh a public option — Medicare or Medicaid or some amalgam of the two — against commercial plans on the market, they might find the latter wanting.

That fear has long blocked political action, says Colleen Grogan, a professor at the University of Chicago’s School of Social Service Administration, because “insurance companies are at the table” when health care reform legislation gets proposed.

Different calculus

To be sure, the state calculus is different from what a federal one would be. In the statehouse, a single industry can have an outsize influence and legislators are more skittish about job loss. In Connecticut, insurers were an especially potent force. Cigna and Aetna are among the state’s top 10 employers.

“They became aware of the bill, and they moved immediately to kill it,” says Frances Padilla, who heads the Universal Health Care Foundation of Connecticut and worked to generate support for the public option.

And those strategies have been replicated at the national level as a national coalition of health industry players ramps up lobbying against Democratic proposals. Beyond insurance, health care systems and hospitals have joined in mobilizing against both public option and single-payer proposals, for fear a government-backed plan would pay far less than the rates of commercial insurance.

Many states are exploring implementing a public option, and once one is successful, others may well follow, opening the door to a federal program.

“State action is always a precursor for federal action,” says Trish Riley, the executive director of the National Academy for State Health Policy. “There’s a long history of that.”

Those state efforts continue, all around the U.S. Virginia state delegate Ibraheem Samirah introduced a new public option bill this session. In Colorado, Gov. Jared Polis is spearheading an effort. And Washington state is the furthest along — it approved a public option last year, and the state-offered plan will be available next year.

But in 2019, Connecticut’s legislators were stuck between two diametrically opposed constituencies, both distinctly local.

Health costs had skyrocketed. Across the state, Scanlon says, small-business owners worried that the high price of insurance was squeezing their margins. A state-provided health plan, the logic went, would be highly regulated and offer lower premiums and stable benefits, providing a viable, affordable alternative to businesses and individuals. (It could also pressure private insurance to offer cheaper plans.)

A coalition of state legislators came together around a proposal: Let small businesses and individuals buy into the state employee health benefit plan. Insurers’ response was swift.

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Lobbyists from the insurance industry swarmed the Capitol, recalled Kevin Lembo, the state comptroller. “There was a lot of pressure put on the legislature and governor’s office not to do this.”

State ethics filings make it impossible to tease out how much of Aetna and Cigna’s lobbying money was spent specifically to defeat the public option legislation. In the 2019-20 period, Aetna spent almost $158,000 in total lobbying: $93,000 lobbying the Statehouse, and $65,000 on the governor’s office. Cigna spent about $157,000: $84,000 went to the legislature, and $73,000 to the executive branch.

Anthem, another large insurance company, spent almost $147,000 on lobbying during that same period — $23,545 to the governor, and $123,045 to the legislature. Padilla recalls that Anthem also made its opposition clear, though it was less vocal than the other companies. (Anthem did not respond to our requests for comment.)

A coalition of insurance companies and business trade groups rolled out an online campaign, commissioning reports and promoting op-eds that argued the state proposal would devastate the local economy.

Lawmakers also received scores of similarly worded emails from Cigna and Aetna employees, voicing concern that a public option would eliminate their jobs, according to documents shared with Kaiser Health News. Cigna declined to comment on those emails, and Aetna never responded to requests for comment.

Flaming out

Connecticut’s first public option bill — which would let people directly buy into the publicly run state employee health plan ― flamed out.

So lawmakers put forth a compromise proposal: The state would contract with private plans to administer the government health option, allowing insurance companies to participate in the system.

The night before voting, that too fell apart. Accounts of what happened vary.

Some say Cigna threatened to pull its business out of the state if a public option were implemented. Publicly, Cigna has said it never issued such a threat, but made clear that a public option would harm its bottom line. The company would not elaborate when contacted by KHN.

Now, months later, both Scanlon and Lembo say another attempt is in the works, pegged to legislation resembling last year’s compromise bill. But state lawmakers work only from February through early May, which is not a lot of time to put a major bill together.

Meanwhile, other states are making similar pushes, fighting their own uphill battles.

“It really depends on whether there are other countervailing pressures in the state that allow politicians to be able to go for a public option,” Grogan says.

And, nationally, if a public option appears to gain national traction, Blendon says, insurance companies “are clearly going to battle.”

They’re going to go after every Republican, every moderate Democrat, to try to say that,” he says. “It’s a backdoor way to have the government take over insurance.”

Still, when President Barack Obama first proposed the idea of a public option as part of the Affordable Care Act, it was put aside as too radical. Less than a decade later, support for the idea is stronger than it ever has been ― every Democratic candidate backs either an optional public health plan or Medicare for All.

Support is so strong, Grogan says, that it is hard for people to understand “the true extent” of the resistance that must be overcome to realize such a plan.

But in Connecticut, politicians say they’re up for a new battle in 2020.

“We can’t accept the status quo,” Scanlon says. “People are literally dying and going bankrupt.

This story first appeared Feb. 26, 2020.  Kaiser Health News is a nonprofit, editorially independent program of the Kaiser Family Foundation. KHN is not affiliated with Kaiser Permanente.

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  1. No many states are not considering a public option. In red states, their economies are generally healthy. In blue states, their economies are in the toilet-they don’t have the money. Public options is a false myth put out by advocates & media that somehow the gods of govt will compassionately look over you & make sure there is no queu. What they will do is ration out those with diffcult conditions. Remember budgets have expenditure for other things besides healthcare. While no system is utopian, the US still has much over the rest of the world. E.g. i just had a childhood friend diagnosed this past Tuesday with ovarian cancer after a routine pap. That was Tuesday; yesterday which was Saturday she had all 8 tumors removed with a good report in tow. Consider that. That’s even faster than normal schedules for surgery-5 days.

    1. Look at the numbers our system is hugely more expensive then every other health care system in the world with outcomes that are good but not among the best in the world.

      In your cancer story above, in addition to the 8,000 in premium I pay out of my paycheck (and the 10K my company pays) I would be on the Hook for a 3k deductible and and still pay 20% after that until 6k. The add co pays Perscriptions my guess is I would be out at least 6k (perscriptions and copays don’t count towards max out of packet) . Hell I had an atomic stress test last year that cost more then 4k.

  2. Only one comment approved on what most voters describe as their number one concern and that comment coincidentally supports big insurers 🙂

  3. It’s not just that the public option would compete with private health insurance but that it promises to raise taxes paid by thowe who can actually afford to pay for their own health care out-of-pocket. I find bitter irony that these people cry “socialism” when it comes to health and education but have no problem with government-operated public works, police, mass transit, Medicare for the elderly, etc, where they have not figured out how to turn a profit.. And when it comes to “rationing,” I don’t know what else to call the exclusion of millions through pricing of premiums, co-pays, deductibles.

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