After public option collapse, here are 6 other ways to rein in health costs

Despite the collapse of an ambitious public option bill, legislative leaders say they’re still committed to passing meaningful health reform before the session adjourns on June 9.

Tied to the ill-fated bill were a bevy of other proposals, from an expansion of Medicaid to a plan that would enhance subsidies on Connecticut’s health insurance exchange. Up for debate now is which measures will survive and whether they will appear in separate legislation or in the state budget.

“The public option seems like it’s something that will be very, very hard to get done in this state. But that doesn’t mean health care reform should be on the backburner,” said Rep. Sean Scanlon, D-guilford, a co-chairman of the Finance Committee. “We’ve got to move on. We have good health care proposals that we’re talking about. I’m confident we can get something done.”

Lawmakers are in discussions with Gov. Ned Lamont, who has repeatedly expressed opposition to the public option bill. But the governor has also floated other ideas, from a cap on annual increases in the cost of prescription drugs to a tax on insurance carriers that would help fund subsidies for people who buy insurance through Access Health CT, the state’s insurance exchange. State leaders have less than two weeks to reach a deal.

Here’s a look at the health reforms still under consideration:

HUSKY expansion

The public option bill included an expansion of Medicaid, known as HUSKY in Connecticut. But even before the bill’s demise, that proposal had migrated into a state budget plan.

In April, the legislature’s Appropriations Committee approved a $46 billion, two-year state budget that includes $34 million over the biennium to expand income eligibility for HUSKY A, the state’s Medicaid-funded health insurance program for children and parents from low-income households and pregnant women. The limit would rise from 160% to 175% of the federal poverty level.

As the session nears its end, Democratic legislators say they remain committed to a HUSKY expansion. Lamont expressed support for it earlier this year, but he’s since raised a counter

proposal (see below).

Premiums and out of pocket costs

Connecticut will receive tens of millions of dollars from President Joe Biden’s American Rescue Plan to boost subsidies on the exchange during the next two years, lowering premiums for many who buy their coverage through Access Health CT. But Lamont wants to expand on that.

Last week he proposed that, instead of a HUSKY expansion, Connecticut use the funding to eliminate premiums and out of pocket costs for 34,000 people who buy their insurance through the exchange; cover dental and other services for 34,000 people;

provide prenatal care for undocumented women; and extend HUSKY postpartum care from two months to 12 months. These initiatives would be backed by a mix of state and federal funding, and the governor has suggested that an assessment on insurance companies could also help support it.

“Connecticut can build on the American Rescue Plan, because it’s one thing to reduce premiums, but for many people, health care is still unaffordable due to the co-pays, due to deductibles, due to those out-of-pocket expenses,” Lamont said recently.

Assessment on insurers

One of the more controversial proposals is an assessment on insurance companies that would bring in up to $50 million per year. The tax was proposed by Democratic lawmakers as part of the public option bill, and it also showed up in a measure Lamont introduced a few months later. Insurers have expressed strong opposition.

The original intent was to use the revenue to boost subsidies on the exchange. Lamont’s proposal to wipe away premiums and other expenses for 34,000 people would still do that. But legislators say it could be used for other things, including to help extend state-sponsored coverage to undocumented children, to expand HUSKY, or to assist in setting up a reinsurance program.

The amount of the annual assessment may be reduced, however, since the state has received federal funding that would help support some of those causes, lawmakers said.

Reinsurance

Republicans in both chambers have expressed support for a reinsurance initiative. The program would pick up a portion of people’s health care costs, rather than the insurance companies having to pay, which leads to lower premiums.

Lamont and Democratic legislators have also signaled support for the program, but the two sides are sometimes divided on how to pay for it. Lamont and the Democrats have suggested using revenue from the tax on insurers, while Republicans advocate for using money from the general fund.

“Although the federal money coming in for the next two years is going to do a lot for premium relief … reinsurance is essential now, if we really want to have sustainable premium reduction,” said Senate Minority Leader Kevin Kelly, R-stratford.

As for the proposal to tax insurers, Kelly said: “The average premium on a monthly basis rivals that of a mortgage, it’s about $2,000 a month. Adding a tax to it, especially now when we’re awash with federal money, state surplus, and a rainy day fund at historic levels, I think is irresponsible.”

HUSKY for undocumented children

Legislators are discussing the feasibility of opening the state’s HUSKY program to undocumented children. They have not settled on an age range, but it could include children up to age 18.

A bill in 2019 that would have extended HUSKY coverage to undocumented residents younger than 19 died after the Office of Fiscal Analysis pinned a $53 million price tag on it. Lawmakers said the state could not afford it. The measure would have covered as many as 18,000 undocumented children.

But this year, there is a renewed push to adopt the proposal.

“This may rile some people up, but I think it’s important to recognize that doing nothing is

not a win,” Scanlon said. “These individuals … are still utilizing the health care system, but they’re not paying for it. By providing that HUSKY coverage, it’s not only the right, moral thing to

do, it’s a financially conservative thing to do. Because the more

these people continue to have to rely on using hospitals as their primary care — something that the hospitals can’t be reimbursed for and don’t collect any money from — it will cost all of us in the long run.”

Prescription drug costs

In February, when Lamont unveiled his proposed budget, he also introduced legislation that would cap annual increases in the cost of prescription drugs. His measure would limit yearly

hikes to the rate of inflation plus 2%. Drug manufacturers that exceed that amount would get hit with a fine.

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.

But Lamont’s proposal has run into trouble, with legislators saying it would be difficult to impose the cap on companies like Pfizer, which have developed lifesaving COVID-19 vaccines.

“For my caucus, it might be difficult to convince them to go against Pfizer, when they are one

of the major reasons we’re going to get out of this pandemic,” House Speaker Matthew Ritter

said. “Pfizer, right now, is pretty well thought of by a lot of people in the state and the country.”