The Middletown Press (Middletown, CT)
Who rules the Insurance Capital?
Hartford’s identity as Insurance Capital of the World is posing a challenge for Democratic lawmakers intent on delivering relief on high health care costs for their constituents.
Not unlike their efforts at a national level, insurers in Connecticut orchestrated a powerful influence campaign that succeeded in derailing public option legislation in 2019. That pressure is not going anywhere.
“We are resolute in our opposition to any governmentrun health care legislation,” said Susan Halpin, executive director for the Connecticut Association of Health Plans, which lobbies on behalf of insurers.
As major employers in the state, insurers have the governor’s and lawmakers’ ears
The clearest example of health insurers flexing muscle was Cigna indirectly threatening to leave the state in response to the “Connecticut Option,” legislation backed by Gov. Ned Lamont that would create statesponsored health plan for small businesses and individuals. While lawmakers and state officials still dispute who killed the bill, the threat unquestionably triggered a series of events that resulted in the bill’s demise.
But for months prior, health insurers worked directly and indirectly to shape the legislation — and then fiercely lobby against it.
“They’re a very powerful special interest and they didn’t hold back when it came to deploying their resources to try and stop this bill from happening,” said Rep. Sean Scanlon, DGuilford, cochair of the legislature’s Insurance Committee.
Many public option health insurance bills were introduced in January, but they were soon thinned to one proposal developed by Scanlon, his Insurance Committee cochair Sen. Matt Lesser, DMiddletown, and state Comptroller Kevin Lembo. That bill failed to win the governor’s support.
It was overhauled and narrowed in May to produce the “Connecticut Option,” which Lamont backed. The Connecticut Option created a statedesigned plan that private insurers would bid for the right to offer — a public private partnership.
But in late May, after Cigna’s threat and Lembo telling the Hartford Courant the bill was dead, the “Connecticut Option” was gutted and never passed.
The public option legislation was viewed as the most damaging proposals to insurers that the General Assembly has considered in years, Halpin said.
“It was extremely concerning to the health insurance industry to see proposals put on the table that are aimed at undermining the private market,” Halpin said. “Anything that undermines the insurance industry in Connecticut undermines Connecticut’s economy. I don’t think we can lose sight of that fact. We have 25,000 direct jobs related to the health insurance industry, another 24,000 indirect jobs.”
Aetna, Anthem, Cigna, ConnectiCare and Harvard Pilgrim Health Care were routinely at the table to negotiate the language of the “Connecticut Option,” which was announced on May 23.
Scanlon and Lesser said they were in regular conversation with insurers through the session. From May 15 to May 29 — the day Lembo proclaimed the bill dead — Lesser and Scanlon were in daily contact with insurers, they said.
“Cigna certainly had the most vocal opposition to this bill,” said Scanlon. “They do not serve the market that we are looking at with this bill, so it’s not a direct thing for them. It’s just more ideological.”
Likewise, Lamont, a late supporter of the public option, had four phone calls with executives at Anthem, United HealthCare, Connecticare and Cigna on May 15, according to Lamont’s schedule, obtained by Hearst Connecticut Media. Two days later, he followed up with a call with Aetna. Staff level talks also occurred.
“As a former small business owner, the governor is always looking for new solutions relating to health care,” Max Reiss, communications director for Lamont, said in a written statement. “As the discussions and realities of what the public options eventually looked like became clear, Governor Ned Lamont had serious reservations about the proposal, which is why he initiated discussions with industry and advocates to hash out what later became known as the Connecticut Option.”
Lamont’s senior adviser at this time was Colleen Flanagan Johnson, who previously worked for Cigna. She has since returned to Cigna’s employment — a position she said was solidified after the end of the legislative session.
“I participated in conversations regarding the Governor’s thoughts around the issue and how to communicate them — what might work best given the dynamics at hand, how he believed a compromise might be reached and what he felt would be the best path forward,” Flanagan Johnson said. “My prior work at Cigna had no bearing on this issue, given my work there was in supporting the internal/external communications for the chief marketing officer and not a policy or product role.”
Less than a week after the collapse of the Connecticut Option, Cigna tallied another win: the company had its deadline to claim tax credits extended in the state budget. This move was supported by Lamont and Democratic lawmakers.
In addition to helping rewrite the public option, insurers rallied opponents against it.
The Connecticut Association of Health Plans, Aetna, Anthem, Cigna, ConnectiCare, Harvard Pilgrim Health Care and United HealthCare spent more than $830,000 collectively on direct lobbying in Connecticut in 2019 to date, according to the Office of State Ethics.
They created a website, Insurance Matters to CT, urging people to contact their legislators to oppose the public option, saying it would “make our current health care system more vulnerable” and constitute “perilous budgetary obligations.” Insurance Matters to CT paid for at least one Facebook advertisement stating “Connecticut’s private health insurance options are working just fine.”
The insurance industry contributes $13.9 billion to the state’s gross domestic product. Nearly 3 percent of all working people were employed in insurance in 2018 — that’s the highest percentage of any state, according to the latest 2018 Connecticut Insurance Market Brief, prepared by PwC and Connecticut Insurance & Financial Services.
During the session, employees of the insurance companies contacted their legislators. Aetna informed Lesser how much of its workforce lived in his district, which comprises Cromwell, Middletown, Newington, Rocky Hill and Wethersfield, Lesser said.
“I got folks who said ‘I work for an insurer. I’m worried that anything that cuts into my employer’s profitability may be bad for our business,’” said Lesser. “And I also heard from people who said ‘I work for an insurer. My job is to give people health care and that’s what I support your bill.’”
Around the country, millions of individuals and small businesses are struggling with the expense of health insurance, doctor’s visits and prescription drugs. As lawmakers debate solutions, costs have been generally climbing.
Seth Powers, codirector of the Center for Children with Special Needs, bought health insurance for the Glastonbury business with 35 fulltime employees. He supported government intervention in the health insurance markets because costs were outpacing what his business or employees could afford.
“A couple years ago there was a 20 to 40 percent increase on the plans we were on,” Powers said. “There was no way we could have sustained the business by taking that expense on. So what happened was it went to the employees and the employees’ share of that health care cost bore the brunt of that increase. There were people who we had here whose health care costs were increasing by $900 a month.”
Earlier this month, Anthem Health Plans sought state approval for a 15.2 percent increase for policies covering about 27,300 people in Connecticut. ConnectiCare asked to increase rates by 4.9 percent for more than 75,000 people.
In this context, the work for a public option or other health care affordability legislation begins again. Scanlon and Lesser sat with insurers last week to discuss the collapse of the Connecticut Option and what health reforms to pursue in the future.
“If the dynamics don’t change, if the influence of the industry isn’t moderated in some way, the outcome is likely to be the same,” Lembo said. “There is no other way on the horizon in Connecticut to disrupt the spiral of rate increases and people losing coverage other than the introduction of a new affordable option in this space.”