2020 OPEN ENROLLMENT ENDS (most states)

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Connecticut: The "Connecticut Option" package ends up a shadow of its original self

Politically, it's generally better to underpromise and overdeliver. Unfortunately, when it comes to the actual legislative process it's usually the other way around.

Case in point: Connecticut.

It was just twelve days ago that Connecticut Governor Ned Lamont rolled out his proposed ACA improvement policy package, which included a bunch of key elements including the ballyhooed "Connecticut Option"...a Public Option which would have opened up the existing state employee healthcare plan to anyone on the individual or small group markets.

The full suite was supposed to include nine major provisions:

  • a robust Public Option
  • further expansion of Medicaid up to 170% of the Federal Poverty Line
  • supplemental subsidies to those earning more than 400% FPL
  • a state-level reinsurance program waiver
  • reinstating the ACA's individual mandate penalty
  • contractually tying carrier contracts for coverage of state employees to exchange participation
  • petitioning the federal govenrment to allow the state to import prescription drugs from Canada
  • having the state Office of Health Strategy establish an annual healthcare cost growth benchmark and oversight process, and
  • adding an opioid tax to help fund the additional Medicaid expansion

Unfortunately, just a week later, the package was already in deep trouble, mainly due to opposition by one of the most powerful healthcare industry players:

Legislation to establish government-subsidized health care in Connecticut is dead following a threat by the chief executive officer of Cigna Corp. that the Bloomfield insurer would leave Connecticut if lawmakers and Gov. Ned Lamont enact the measure, Comptroller Kevin Lembo said Wednesday.

...And two top legislators negotiating details of the so-called Connecticut Option legislation would not confirm or deny that Chief Executive Officer David Cordani threatened to take Cigna out of Connecticut. But they said strong opposition from the industry, particularly Cigna, may force lawmakers to strip out from the legislation the public option portion, a major part of the legislation establishing a state program offering insurance.

Lembo told The Courant that Cordani threatened to send a public letter to Lamont that if the public option bill moves forward, “they would reconsider where they’re domiciled."

Cigna holds a huge chunk of the Connecticut insurance market in its hands. Ironically, the individual and small group markets aren't part of that--Cigna doesn't even participate in either of them. Regardless, this development shot a major hole in the entire package, including implementation of their own individual mandate penalty, among other things.

That leads us to today, where fully six of the nine bullets listed above appear to be no more. via Christine Stewart of CT News Junkie:

There’s no public option for small businesses and there’s no more opioid tax, but the House was able to muster enough support for a bill that allows the state to seek a reinsurance waiver from the federal government to eliminate risk from large claims, and to also import drugs from Canada.

The House sent the bill to the Senate on a 112-28 vote.

...He said Connecticut could become the fourth state in the nation to get a federal waiver to important drugs from Canada. Those drugs are 35% to 55% lower in cost than drugs sold in the United States, he said.

Secondly, the legislation allows the state to apply for a 1332 reinsurance waiver.

...Scanlon said a report from Wakely recently found a reinsurance waiver could lower the cost of health insurance premiums for Connecticut residents by 5%.

The bill would also create a healthcare cost benchmark. He said the Office of Health Strategy would set a benchmark and anyone — such as hospitals, drug companies or manufacturers — would be required to explain why they didn’t reach the established benchmark.

I've confirmed with Stewart that the only items which survived the carnage are:

  • further expansion of Medicaid up to 160% FPL (down from 170%)
  • the state-level reinsurance program waiver
  • petitioning to import prescription drugs from Canada
  • The annual OHS healthcare cost growth benchmark

Don't get me wrong, all four of these are good things. If these had been all that was originally announced, today's news would be treated pretty positively.

Unfortunately, it's a far cry from what was announced. Both the reinsurance waiver and drug importation petition require federal approval, and while I don't imagine reinsurance will be a problem (even Trump's CMS Administrator seems to be onboard with reinsurance...she's approved them for both red and blue states alike), even the 5% reduction is peanuts compared to the 15-20% drops seen in several other states.

And so it goes.