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Scaled Down Sustinet Plan Moves Ahead

Greg Bordonaro

May 30, 2011

After months of debate on the controversial Sustinet health care reform proposal, lawmakers have reached an agreement on a deal that will open up the state employees and retiree’s health plan to employees of municipalities and some nonprofits, but that is about it.

There will be no public health insurance option, and small businesses will not have the opportunity to join the state insurance plan, said Jeannette DeJesús, the governor’s special advisor for health care reform and a deputy commissioner of public health.

But the deal doesn’t necessarily mean the public option is permanently dead. As part of the agreement, a new cabinet will be formed — the Governor’s SustiNet Health Care Cabinet — to create a business plan and undertake a feasibility study of alternatives to private insurance. There will also be a new Office of Health Reform and Innovation agency — led by DeJesús — that will coordinate state and federal reform efforts.

“It’s part of Sustinet legislation,” DeJesús said. “We are going to develop a business plan to identify what the alternatives are for private insurance and how much it would cost.”

Sustinet is Connecticut’s sweeping health care reform proposal that originally included establishing a self-insured public insurance option choice for employees of municipalities that would gradually be expanded to serve small businesses, nonprofits and households.

The plan also called for implementing the medical home model concept and linking provider payments to performance; expanding the Medicaid program; and investments in electronic health records.

Democratic lawmakers, along with the Universal Health Care Foundation, at least one small business group, and others, have been pushing for the adoption of the proposal, arguing it could help slow the growth of health care spending and provide an alternative to private insurance.

But Republicans, the Connecticut Business & Industry Association and insurers have opposed the measure — particularly the creation of a public insurance option — over concerns about its costs.

And there have been several conflicting reports about the original proposal’s price tag.

Advocates said it could potentially save the state $226 million to $277 million a year.

But an independent estimate by the state’s Office of Fiscal Analysis said the measure could cost the state hundreds of millions of dollars a year.

The biggest cost driver identified by the Office of Fiscal Analysis is the creation of a “basic” health plan for low-income adults, which would run an annual tab of up to $478.6 million a year.

The insurance industry also put out a study that said Sustinet would cost more than it saves, and Gov. Dannel P. Malloy voiced concerns about the cost of Sustinet, especially with the state facing a massive budget deficit.

Some medical providers also withdrew their support of Sustinet after lawmakers removed medical liability protections from the proposal. As a result, the original plan was pared down substantially.

In terms of the assessment of alternative models to private insurance, it’s not entirely clear what will be looked at, but the study could include profit and nonprofit organizations and insurance cooperatives, DeJesús said.