Moneybox

An Insurer Just Squashed the Effort to Create a Public Option in Connecticut

LOS ANGELES, CALIFORNIA - MARCH 07: Cigna's cross-country Health Improvement Tour provides free biometric screenings to help people know their key health numbers. The van visits communities across the country and is open to the general public.  March 07, 2019 in Los Angeles, California. (Photo by Gregg DeGuire/Getty Images for Cigna)
The CEO of Cigna reportedly killed off the effort to create a public option in Connecticut.
Gregg DeGuire/Getty Images

Just last week, it seemed as if Connecticut might follow Washington’s footsteps and become the next state to pass some version of a public health insurance option. Gov. Ned Lamont and a group of Democrats lined up behind a bill that would create a new, government-backed insurance plan and offer subsidies to some families that don’t currently qualify for help under Obamacare. “This is a bill that gives us the best opportunity in a long time to expand access to people who don’t have access to affordable health care and to bring down the cost of health care,” Lamont said.

Now, following a swift and fierce pushback from the state’s powerful insurance industry, the effort appears to have collapsed. Connecticut Comptroller Kevin Lembo, whose office would have played a key roll in implementing the legislation, told the Hartford Courant Tuesday that the legislation was effectively dead after the CEO of Cigna, which is based in the state, suggested he would move the company elsewhere if the bill passed. According to Lembo, the insurance giant’s chief “threatened to send a public letter to Lamont that if the public option bill moves forward, ‘they would reconsider where they’re domiciled.’” Cigna’s spokesman “said the insurer lobbied hard against the bill, but denied that any threat was made.”

The insurance industry is a major employer in Connecticut and holds an enormous amount of political sway. But if Lembo’s description of what happened is true, it may be a preview of just how vicious any battle over federal health reform would be. I happened to be on the phone with a Connecticut state Sen. Matt Lesser to discuss the proposal when the news of its demise broke. As he explained it to me, the most recent version of the bill would have required insurers that sold any coverage on the state’s Obamacare exchanges to also offer a standard, state-designed health plan, called the Connecticut Option, structured to be 20 percent less expensive than other options on the market. The government would have assembled a network of providers willing to accept the new coverage, and provided some additional subsidies to households above and beyond what Obamacare offers. It was not a plan to push private carriers out of Connecticut’s individual insurance market, which is fairly small to begin with. We’re talking about very incremental change.

Nonetheless, a group of carriers wrote to Lamont last week urging him to kill the bill. It might not have posed any kind of serious danger to their bottom lines, but judging by the comptroller’s comments to the Courant, Cigna’s CEO at least seems to have viewed the fight as an early skirmish in a bigger national battle over health reform:

Lembo accused Cordani of acting more from political impulse than to protect his business.

“This is not an existential threat to them,” he said. “It’s an ideological threat to the CEO of Cigna.”

That tracked with what Lesser told me earlier in the day when I asked him what he thought the bill’s chances of passing might be. At the time, he said it was 50-50. “We have an incredible amount of political support,” he told me. “But I don’t want to kid myself. We are a state that’s synonymous with the insurance industry. And there are some in the industry who are afraid that any health reform effort is a step down the path to their biggest fear, which is Medicare for all.”