Legislative Democrats on Thursday unveiled their long-awaited health insurance proposal expanding state government’s role and establishing a tax on insurers to finance subsidies to reduce skyrocketing costs.
The legislation would authorize the state comptroller to offer coverage under a plan for employees of nonprofits and other small employers.
Money collected by the Connecticut Health Insurance Exchange would be used to reduce the cost of health plans by eliminating premiums for low-income households and subsidizing coverage for others.
“Overwhelmingly, people in Connecticut are demanding affordable coverage, not by replacing the existing insurance landscape,” said Sen. Matt Lesser, D-Middletown, and Senate chairman of the insurance committee. “The subsidies create extra competition.”
“We’re not using it for the general fund,” he said. “It’s to make health insurance more affordable.”
The Affordable Care Act, or Obamacare as it’s known, has reduced the number of uninsured, he said. But many find it too expensive and therefore inaccessible, Lesser said.
The legislation also addresses the loss of employer-sponsored health coverage due to high joblessness in the coronavirus pandemic.
To critics who say the industry will pass along a tax to consumers in the form of higher premiums, Lesser questioned whether insurers reduced premiums after benefiting from a tax break last year from the Trump administration.
Rep. Kerry Wood, House chairwoman of the insurance committee and a Rocky Hill Democrat, said she is “very hesitant” to impose a tax on insurance companies, many of which are based in Connecticut.
She said she’s looking for a solution to help those who have insurance, but are burdened by high deductibles that make health care unaffordable.
“We’re talking about people who have health insurance and might be bankrupting themselves with one accident or one illness,” Wood said.
Sen. Tony Hwang, the top Republican on the insurance committee, criticized the proposed tax “at a time when the state is low in ranking in jobs and income growth.”
Republicans will propose other ways to help reduce health insurance costs, such as reinsurance, reduced prescription costs and a benchmarking program to control rising costs by measuring and comparing processes among companies.
The insurance industry fight the legislation as it opposed previous attempts at government solutions to insurance costs. They prevailed in 2019 with heavy lobbying.
“The first half of the bill lays a path to a single payer health care. We will continue to adamantly oppose it,” said Susan Halpin, executive director of the Connecticut Health Plan Association.
The health provider would “fund a program that is as yet undefined,” she said.
Wyatt Bosworth, assistant counsel at the Connecticut Business & Industry Association, said members of the business advocacy group are concerned that small businesses and taxpayers would be the “backstop for deficits the state-run plan may run in the future.”
“Members generally don’t trust government and don’t want government to be in health care to this degree,” he said.
The legislation is beginning what will likely be a long process in the General Assembly, which adjourns in June.
Advocates for a public option say there is a new urgency during the the worst public health crisis in a century and tens of thousands of workers have lost their jobs and health insurance. Policymakers also say the legislation is an opportunity to end racial disparities in health care coverage that have worsened in the COVID-19 pandemic.
Stephen Singer can be reached at email@example.com.