How does the public option bill differ from Gov. Ned Lamont’s health care plan? Here’s a look at the two proposals.

Yehyun Kim :: ctmirror.org

Colleen Teevan, system pharmacy clinical manager at Hartford HealthCare, uses hand sanitizer before distributing the COVID-19 vaccine.

With the rising cost of health care a central issue this legislative session, lawmakers and Gov. Ned Lamont’s administration have both moved ahead with their own plans aimed at driving down prices and improving access.

Last fall, key Democrats pledged to deliver a sweeping public option bill, and they followed up in February with a broad proposal that includes a state-sponsored plan for small businesses and nonprofits, a tax on insurers, and additional subsidies for people who buy their insurance on Connecticut’s health exchange, Access Health CT.

Lamont has also unveiled his own bill, with similar goals of imposing an assessment on insurance carriers and creating more subsidies on the exchange. His plan also includes an effort to tamp down the ballooning cost of prescription drugs by imposing an annual cap on price increases.

While the proposals have significant overlap, each has distinct provisions that supporters say is crucial in improving Connecticut’s health care landscape. Here’s a look at how the plans are alike and different, and what happens next.

What’s in the Democrats’ bill?

The Democrats’ proposal, led by Rep. Sean Scanlon, D-Guilford, and Sen. Matthew Lesser, D-Middletown, with support from state Comptroller Kevin Lembo and others, would use the state’s purchasing power to negotiate insurance policies for small businesses and nonprofits.

Premiums for the plans would not increase or decrease by more than 3% annually. Companies with 50 or fewer people would qualify.

Despite earlier claims that state taxpayers would be the backstop for the plans, the bill authorizes the comptroller to buy stop-loss insurance to protect against unpredictable or catastrophic losses.

The Democrats have also recommended levying an assessment on the state’s insurance companies that would bring in up to $50 million per year. The money would be used to create additional subsidies for people who buy their health coverage on the exchange (about 70% of the more than 100,000 people who purchase plans through Access Health CT now receive these benefits, but the insurance is unaffordable for many others), and to provide support for undocumented residents seeking coverage. It also would be used to expand eligibility for Medicaid, known as HUSKY A in Connecticut, to people earning up to 201% of the federal poverty level.

How does this bill differ from the governor’s?

The governor’s plan does not include the HUSKY A expansion or subsidies for the undocumented community. It also does not feature the public option for small business and nonprofits.

What’s in the governor’s bill?

Lamont’s proposal would establish the “Covered Connecticut Plan,” in which an annual assessment would be imposed on insurers, similar to the Health Insurance Tax created under the Affordable Care Act. Congress repealed that federal tax in 2019 (the repeal took effect last month).

Like the Democrats’ bill, the governor’s plan expects the assessment to bring in up to $50 million annually, and the money would be used to fund additional subsidies for people who purchase coverage on the exchange. Some of the money could also be directed to other causes, including a reinsurance program or an expansion of Medicaid. The state’s Office of Health Strategy would manage the Covered Connecticut Program and determine if funds should be used for other causes.

In addition, Lamont has recommended capping annual increases in the price of prescription drugs. His proposal would limit yearly hikes to the rate of inflation plus 2%. Drug manufacturers that exceed that amount would get hit with a fine, and revenue from those penalties would also be used to support subsidies for health coverage (any amount brought in from the penalties would be used to offset some of the $50 million assessment on insurers. So if the state received $1 million in penalties, the assessment on carriers would be $49 million that year).

The fines are equal to 80% of the difference between the amount a manufacturer gets from all sales of a drug in a given year and the amount the company would have received from sales if it had adhered to the cap on increases. So if the bill permits a company to raise its prices by $4 and the company raises them by $8, the state could impose a fine equal to 80% of $4.

The bill does not include an estimate of what the state expects to receive each year from the penalties.

How does this bill differ from the Democrats’ proposal?

The Democrats’ bill does not feature a plan to cap the price of pharmaceuticals.

What’s the status of each bill?

The legislature’s Real Estate and Insurance Committee held a public hearing on the Democrats’ measure in early February. The hearing drew strong support and fierce opposition, with 87 speakers signing up to address lawmakers and hundreds of pieces of written testimony submitted. The proposal has not yet been voted on by the committee, though the panel did green-light a previous public option bill in 2019 (it died in the Senate).

Lamont’s bill is before the Insurance Committee, though a public hearing has not yet been scheduled.

Will both measures make it through the legislature?

It is unlikely that both proposals will be approved by the General Assembly. Lawmakers and other state officials say they do not want two separate assessments on insurance carriers. But they have not yet come to an agreement over which bill will win out, or whether they will be combined in some way.

“I think our bill is more comprehensive. And what we need right now is a comprehensive health care bill,” Scanlon said. “But I think there are changes that will be made to the bill. And we’ll continue negotiating with the administration.”