Health care reform legislation faces uncertain future
In November, two months before Connecticut’s General Assembly convened for the 2021 regular session, lawmakers stood under the portico at the front of the state Capitol and pledged to tackle the cost of health care and access to medical services, mainly through a public option bill.
Three months later, on the same day he released his biennial budget proposal, Gov. Ned Lamont unveiled his own legislation aimed at addressing health care reform that included an annual cap on prescription drug costs.
But momentum surrounding both ambitious bills has slowed with only a month left in the session and opposition mounting. Legislative leaders now say Lamont’s prescription drug cap, though wellintentioned, would be a tough sell in a year when Pfizer and other drug companies are producing lifesaving COVID-19 vaccines. And an infusion of federal money that has helped fund additional subsidies on Connecticut’s insurance exchange has undercut a key aspect of the public option bill.
“I understand the governor’s goals here,” House Speaker Matthew Ritter said of Lamont’s proposal. “But I will say, 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. Pfizer, right now, is pretty well thought of by a lot of people in the state and the country.”
During a recent meeting with officials from Pfizer, Ritter said the company expressed concern that the new law could hinder some of its operations.
“I think their feeling was that it’s going to put a drag on their research and developments,” he said. “And they are worried … especially with Connecticut going it alone and Pfizer having a big presence here.”
Officials at Pfizer have been vocal about their opposition to the bill. In testimony submitted in March, John Burkhardt, a senior vice president and site director of the company’s Groton laboratories, told legislators that government price setting would diminish the incentive for drug makers to invest in the research and development of new pharmaceuticals.
Lamont has proposed capping annual increases in the cost of prescription drugs. His proposal would limit yearly hikes to the rate of inflation plus 2 percent. Drug manufacturers that exceed that amount would be fined, and revenue from those penalties would be used to support subsidies for coverage on the state’s health insurance exchange, Access Health CT.
One of the issues making it a tough sell is the fact that no other state has passed this type of legislation, Ritter said, though it has also been floated in Massachusetts. The Bay State’s bill, which has been promoted in connection with Connecticut’s proposal, is also pending.
“To date, no other state has adopted this,” Ritter said. “I think the governor is right that health care is complicated and you have to attack it at all fronts. There are ways we have to begin to restrict and control drug prices. But Connecticut can’t do that in isolation.”
Senate Minority Leader Kevin Kelly, R-Stratford, questioned why Lamont was pushing the bill, “especially after seeing the role that Pfizer, a Connecticut company, played in the development of [coronavirus] vaccines and the ability to create, develop and produce them in such a short period of time.”
“I don’t think it looks at them as being an important partner in Connecticut’s landscape,” he said.
A spokesman for Lamont did not comment directly when asked about the on the bill’s fate.
“Republicans and Democrats agree Americans should not pay three times more for medicine than people in other countries,” said Max Reiss. “[The] proposal, like similar bipartisan proposals in Washington, preserves the benefits of cutting-edge research while protecting Connecticut residents who have to choose between paying for the medicines they need or paying for their family’s food and rent. Pharmaceutical companies can recover their R&D costs without raising the price of existing drugs like insulin and EpiPens year after year after year.”
A changing public option?
One of the main components in both Lamont’s bill and the Democrats’ public option proposal is an assessment on the state’s insurance companies that would bring in up to $50 million per year. While the money could be used in a variety of ways, proponents of both bills have said a main goal is to create more subsidies for people who buy insurance through Access Health CT. That would widen access for people who can’t afford health insurance, and help make coverage more affordable for many who already have a health plan.
But in March, state officials announced they would receive at least $85 million for the next two years through President Joe Biden’s American Rescue Plan to fund additional subsidies on the exchange. The federal money has allowed the state to open a special enrollment period and is expected to save households an average of $116.05 per month, or $1,392.57 per year.
It has also led some to question whether the assessment on insurance carriers should remain in either health care bill.
“The American Rescue Plan is a game changer, and it really negates the need for the tax that was included in the bill,” said Susan Halpin, executive director for the Connecticut Association of Health Plans, which lobbies on behalf of insurers. “Congress is already talking about making those subsidies permanent. So I don’t see why Connecticut would want to add a level of assessment … when we don’t know yet what the outcome will be.”
For now, however, Democrats are reluctant to say they would strip the assessment from their proposal. Instead of subsidies on the exchange, money from the assessment could be used to fund a reinsurance program or to expand Medicaid, known as HUSKY in Connecticut, they said.
But the Medicaid expansion that originally appeared in the public option bill has since been incorporated into a budget proposal. 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 percent to 175 percent of the federal poverty level.
Even if that version of the budget doesn’t ultimately pass the General Assembly, lawmakers say the Medicaid expansion is likely to remain in any version that is adopted.
Another possibility for the assessment on insurance carriers is to rewrite the bill so the tax is levied beginning two years from now, when funding from the American Rescue Plan is set to expire, legislators said. If the federal government decides to continue the funding, the General Assembly could later revisit whether to keep the tax.
“I’d rather have a plan in place that we can back down from than put no plan in place at all, given how dysfunctional and chaotic Washington is, and simply rely on them to make this permanent,” said Rep. Sean Scanlon, a Guilford Democrat who co-authored the bill with Sen. Matthew Lesser.
But given that the pressing need for an assessment has dissipated and the Medicaid expansion is likely to stay in the budget, legislators have begun to discuss whether the best move would be to scrap the current public option proposal and revive a measure from 2019, which features a government sponsored plan for small businesses and nonprofits but doesn’t include all of the other provisions outlined in this year’s bill, a source with knowledge of the discussions said.
The source described the possible new offering as a “lighter” public option bill.
But that doesn’t mean the measure will necessarily have an easier journey. Insurance company leaders have expressed strong opposition to both the assessment and the public option for small businesses and nonprofits. In an April 13 letter to Lamont, the heads of five major companies – Anthem, Cigna, UnitedHealth Group, CVS Health and the combined Harvard Pilgrim Health Care and Tufts Health Plan – raised concerns about the proposals and urged Lamont to back policies that encourage businesses to stay in Connecticut.
“The pandemic has demonstrated that employees can work virtually, making it easier for companies to choose where they are domiciled and grow,” they wrote. “As a result, it has never been more critical for the state to create a climate that retains and attracts businesses that will help stabilize the economy. All of us will have to decide where it will be best to deploy our resources long term.”
Meeting the moment
During their November press conference, Democratic legislators said they were elected, at least in part, on promises made to constituents about health care reform.
“A new legislature has been elected that ran on this issue, that has talked about this issue, and that has made promises to the American people in Connecticut that we are going to deliver real reform,” Lesser, a co-chair of the Insurance Committee, said at the time.