A bipartisan effort that would have allowed trade associations in Connecticut to offer large group health plans to their members won’t come up for a vote before the General Assembly wraps its 2023 session Wednesday.
House leadership said H.B. 6710, which gained late momentum Friday when the state’s health care advocate gave approval to the measure, ultimately failed to gather enough support within the Democratic party caucus.
“We won’t have the votes to do that,” House Speaker Rep. Matt Ritter said. “We call ‘em like we see ‘em.”
Business groups had lobbied for the legislation, which they hoped would bring down the cost of providing health insurance to their employees by increasing competition in the market.
Employers who want to offer benefits to their employees say steep insurance rate hikes in recent years have made that nearly untenable. The recent departure of ConnectiCare from the state’s market has further reduced competition, raising concerns about health insurance accessibility and affordability.
The bill would have allowed established trade associations that meet certain membership requirements to purchase fully funded health plans from insurance companies on behalf of the group, or they could offer their members what are known as “self-funded” insurance plans, where a large employer — in this case the trade group — pays claims directly.
In Connecticut, about 76% of privately insured people are covered by self-funded plans, which are regulated by the federal Labor Department rather than the state Department of Insurance.
Association health plans are currently available to businesses in roughly a dozen states.
But the proposal received strong opposition from many patient advocacy groups, such as the American Cancer Society and the Leukemia & Lymphoma Society, the Connecticut Legal Rights Project and Universal Health Foundation of CT.
In testimony to the legislature’s Insurance and Real Estate Committee earlier this session, the advocates warned that self-funded association health plans were likely to favor healthy people. Businesses where an employee gets sick or injured could see their rates hiked, the advocates said.
For months, committee members worked with the governor’s office, the Office of Health Strategy, state insurance regulators, the office of the health care advocate Ted Doolittle and other lawmakers and stakeholders to rewrite the bill to provide more protections for people with pre-existing conditions and people who get sick or injured.
Late last week, they agreed on a new version of the legislation that received approval from the key players. The compromise bill offered stronger consumer protections, Doolittle said, including limits on how much insurance rates can vary for companies with sick or injured employees. He offered his support “grudgingly,” he said.
Doolittle explained that under the proposal, self-funded plans could initially charge the sickest groups up to 30% above a base rate and offer discounts of up to 40% for the healthiest groups. Upon renewing their plans, groups could see premiums increase for the sickest groups by no more than 25% over the base rate. The proposed association health plans would be overseen by Connecticut regulators — covering all essential benefits under the Affordable Care Act and all diseases and conditions mandated under state law.
That state-level oversight was critical for many of the stakeholders in the negotiations. “This a different kind of association health plan than has been passed in any other state,” Doolittle said. “On balance, I think it’s a good thing.”
Still, patient advocates remained opposed to the amended legislation. In a letter circulated to lawmakers Friday, more than a dozen patient advocacy groups urged “no” votes. “More affordable coverage is needed in Connecticut, but policies that will lead to discriminatory practices are not the way. Please protect our many vulnerable populations and oppose this harmful legislation,” the letter stated.
Rep. Kerry Wood, D-Rocky Hill, who co-chairs the Insurance and Real Estate Committee, took issue with the letter. “There was a misinformation campaign that got us off track,” she said.
Wood said the legislation was complicated and she plans to do more in future sessions to ensure her fellow lawmakers have a better grasp of the concept. She said she had hosted some lawmakers for “office hours” to walk them through the bill.
“There was a lot of misunderstanding on the bill, which is my job going forward,” she said. “Getting good quality health insurance is a bipartisan issue.”
By Wednesday morning, after a potential last-minute deal among lawmakers, the bill was officially off the table.
“It would have been a good way to add another tank on the battlefield to address high health care costs,” said Wyatt Bosworth, a lobbyist with the Connecticut Business and Industry Association, which supported the legislation.
“I’m disappointed in the outcome, but I’m optimistic in the future, given the groundwork that the business community and critical state government agencies played in negotiating and finding consensus on a framework,” Bosworth said.