Senate Dems signal return of public option healthcare bill

Senate Democrats signaled a return of the public option bill to offer lower-cost health insurance to individuals and small businesses after a hearing about insurance rate increases to both the individual and small group markets in 2025.

Sen. Jorge Cabrera, D-Hamden, co-chair of the General Assembly’s Insurance and Real Estate Committee, said that he understood insurance companies are simply passing down higher costs from pharmacies and hospitals but that it now sounds “like a broken record,” according to a post on the Connecticut Senate Democrats website.

“What we need to do is re-double our efforts to pass a public option here in Connecticut where individuals and businesses can buy into the state’s health insurance plan,” Cabrera said. “This should be a priority for the General Assembly in 2025.”

The public option, which would allow individuals and businesses to join Connecticut’s state employee health insurance plan through Connecticut’s Partnership Plan 2.0 — which allows municipalities to buy into Connecticut’s state employee health plan — was raised several times between 2019 and 2021.

The proposals, spear-headed by former State Comptroller Kevin Lembo, were met with vehement debate, including opposition from the state’s insurance companies, Republicans in the General Assembly, and the business community who argued that it would undercut the state’s flagship insurance industry and that taxpayers would be burdened with cost overruns if demands outstripped premiums. The Partnership Plan 2.0 has faced some funding challenges in the past, which were highlighted by organizations opposing the public option.

However, the public option was supported by the more progressive wing of General Assembly Democrats, labor unions, medical associations, and nonprofit organizations. The push subsided when Gov. Ned Lamont withdrew his support.

The ever-escalating cost of insurance for individual and small group markets – both of which are regulated by the state – has left the public upset and lawmakers in a bind over what to do, with major legislation being proposed and shot down by the opposition. Often that opposition comes from within the Democrats’ own party which has the vast majority of seats in the House and Senate.

While Cabrera is pitching the public option, his co-chair on the Insurance and Real Estate Committee, Rep. Kerry Wood, D-Rocky Hill, has for the last two years made a vigorous attempt at passing another piece of legislation to allow businesses to form associations for the purposes of purchasing healthcare or self-insure, something the state currently allows municipalities to do.

The plan was heavily supported by the business community and nonprofit groups, but the Insurance and Real Estate Committee in 2024 failed to pass a single bill out of committee, as in-fighting and a breakdown in communication let the legislative deadline for approving bills pass by.

Wood and other supporters attempted to push the association healthcare bill through other legislative vehicles but encountered strong resistance from state agencies and organizations funded with taxpayer dollars, including Access Health CT , which receives part of its funding through fees levied on small group plans, and the Commission on Racial Equity in Public Health . Their lobbying efforts led to some bitter back and forth behind the scenes at the capitol during the 2024 session.

The rising cost of insurance, particularly for small businesses, has led to the rapid growth of workarounds like businesses self-insuring while purchasing stop-loss insurance from insurers, known as level-funded plans. Those plans allow businesses to recoup some of their premium payments when claims are low and are then covered by insurance if their claims go too high.

However, supporters of the public option are also trying to do away with level-funded plans, saying they are risky, provide insufficient coverage, and bypass state regulations. Nevertheless, more and more businesses are using them, and advocates argue they give businesses more flexibility and cost-savings.

The latest round of rate increase requests from insurers saw an average rate increase request of 8.3 percent for the individual market and an 11.9 percent increase for the small group market, on top of the average increases of 9.4 percent and 7.4 percent in 2024 respectively.

Attorney General William Tong called on the Insurance Department to reject the rate increases, saying the insurance companies are not transparent in presenting their costs and are “perversely disincentivized from driving down unit costs through negotiation of lower rates.”

“The burden of proof falls on the insurers to justify their rates—to provide transparent, factually-supported actuarial analysis,” Tong said in a press release . “The lack of information about PBM arrangements makes these applications facially deficient. Moreover, the carriers make sweeping statements about their annual trend but do not provide the data to justify their assumptions. I encourage the Insurance Department to thoroughly scrutinize these applications and reduce any and all components of the requested increases that are not actuarily justified.”

Following the breakdown of the Insurance and Real Estate Committee in 2024, and the continued fighting over both the public option bill and the association healthcare bill, Connecticut residents and small businesses are left without many options and facing higher rates.

“A third of state residents are struggling to pay their medical bills, and nearly half are foregoing medical care because of the high cost,” Cabrera said. “But the segment of Connecticut’s healthcare consumers who are in these small group and individual markets – about 200,000 people – need another high quality, affordable health insurance option. And that option is the public option.”

The post Senate Dems signal return of public option healthcare bill appeared first on Connecticut Inside Investigator .