Lobbying by Cigna and other insurers killed Connecticut's push to establish a cheaper public health insurance plan to compete with private insurers, according to state lawmakers.
Democratic Gov. Ned Lamont, Comptroller Kevin Lembo, and leaders of the Democratic-controlled legislature announced May 23 that they'd reached agreement on a proposal to create new public plans intended to save individuals and small businesses 20% on premiums.
But they dropped that proposal on Wednesday, one week before the legislature adjourns, following intense lobbying by Cigna.
Cigna Spokesman Brian Henry told Modern Healthcare in an email that officials at the nation's fifth largest insurer had been in touch with legislators in recent days and weeks regarding the public option proposal. Legislative sponsors and the governor's office say they will revive the legislation next year.
The fate of the Connecticut proposal illustrates the tough political resistance from insurers and providers that state-based public option proposals have faced in a number of states. While Washington, Colorado, and New Mexico recently passed bills to create or study a public insurance plan, a similar bill was shot down at the last minute in Minnesota.
"We were making progress with our negotiations, but Cigna was expressing concerns about the bill," said Democratic Rep. Sean Scanlon, the Connecticut bill's House sponsor. "We just ran out of time. We'll hopefully spend the next six months negotiating, and come back next session and try to pass a public option bill."
Bloomfield, Ct.-based Cigna, which does not offer individual or small-group plans in its home state, blasted the public plan concept. "The only option this proposal gives to the public is to pay more to get less from the healthcare system," Henry said. "This option does not work for the public, for the state, or for the private sector."
He denied an allegation by Lembo that Cigna officials had threatened to move the company's headquarters out of Connecticut if the state passed the public option plan. Lamont's and Lembo's offices did not respond to requests for comment Thursday.
Scanlon declined to confirm or deny Lembo's account of Cigna's threat. "We're trying to move beyond that," he said.
Like Washington state's new public option program, the Connecticut Option plans would have been offered by private insurers, starting in 2022. The state would have designed the benefits and assembled the provider networks, then would have "rented" the networks to private insurers. Participating carriers would have had to guarantee premiums 20% lower than those currently offered.
The Connecticut bill also would have offered state financial assistance to consumers—including people who earn too much to qualify for ACA premium subsidies—to help them with healthcare costs. That would have been funded by reinstating a fee on people who do not buy health insurance.
In addition, the bill would have required insurers that serve state employees to also offer plans on the state's Affordable Care Act exchange, as a way to increase market competition and drive down premiums.
The Connecticut Association of Health Plans said it opposed the public option proposal because it "continues down the path toward government-run health insurance."
Scanlon said Democratic legislative leaders and the governor still hope to pass a reinsurance program by next week to reduce premiums. That would require the state to obtain a federal Section 1332 state innovation waiver, which other states have received from the CMS.
But he said he and other state Democratic leaders are determined to move forward next year on the public option model, which he called a "unique public-private partnership," not a path to socialism or a single-payer insurance system, as critics claim.
"Insurers were expressing some concerns and we have to take that seriously," he said. "But our constituents elected us to do something about this problem, and that's why I won't give up on this."