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In Sickness and Wealth

Does a state insurance plan for middle-class families threaten the health of our state's poorest citizens?

By Andy Bromage

July 24, 2008

You won't hear it from the Rell administration, but a new health care plan aimed at healthy middle-class adults is threatening to destabilize the state Medicaid program that serves some of the poorest, most at-risk populations.

So say dozens of independent health care advocates.

The state-sponsored Charter Oak Health Plan has been signing up new members for about three weeks, offering no-frills health insurance to anyone who can afford the $75 to $259 monthly premiums and the slightly higher co-pays and deductibles. Charter Oak is aimed at working adults and college grads who make too much money to qualify for Medicaid or SAGA, but earn too little to afford out-of-pocket health insurance.

But in the process of expanding health care to waitresses and entrepreneurs, the state is turning its back on the neediest cases, health care advocates say. To entice for-profit HMOs to bid on the Charter Oak plan, it was combined with HUSKY, the state-administered Medicaid program that serves more than 300,000 low-income people. Managed-care organizations would never bid on Charter Oak alone, the Rell administration argued; only combining the two would produce profits worth their while.

Charter Oak targets a real problem afflicting Connecticut: 350,000 state residents flirt with economic disaster because they can't afford private health insurance, or don't get it through their jobs. Combining a low-cost, bare-bones health care plan with HUSKY might make sense if it improves efficiencies and if the level of care remains the same.

But it won't, says Sheldon Toubman, a New Haven Legal Assistance Association lawyer who's part of a broad coalition of health care advocates opposed to the merger. For one thing, only a fraction of doctors who presently accept HUSKY have committed to taking Charter Oak and HUSKY under the new combined system. Two of the state's biggest hospitals—Hartford Hospital and Yale–New Haven Hospital—have not agreed to accept Charter Oak.

New Haven County now has 616 primary-care doctors and 1,755 specialists that accept HUSKY. But as few as 33 primary-care docs and 54 specialists are signed onto the new plan, depending on which health network you choose.

HUSKY members will start getting letters soon asking them to select from a new list of HMOs—Aetna Better Health, Americhoice or Connecticut Health Network. It's the third time in a year they've been asked to switch networks. If they don't choose one, the government will choose for them, which is a problem if their doctors don't accept that insurance.

In far-flung Windham County, where only a handful of doctors accept HUSKY, not a single specialist has signed onto the Aetna Better Health plan. Just three have committed to Americhoice. By contrast, almost 200 specialists accept Anthem, the HMO being jettisoned to make way for the managed care outfits that were agreeable to Charter Oak-HUSKY combo.

The arrangement, says Toubman during an interview in his New Haven office, "has nothing to do with improving the quality of health care [HUSKY members] receive or saving money, and everything to do with propping up [Gov. Jodi Rell's] limited-benefit health insurance program for a small group of healthy individuals, the Charter Oak Health Insurance Plan, which probably would otherwise collapse under its own weight."

Another big problem: Currently, HUSKY operates as a non-risk-based program, which means the HMOs don't make money by denying care. Claims are processed by HMOs, but bills are paid by the state, and the DSS sets provider rates. Beginning September 1, however, HUSKY will once again become a risk-based plan, meaning the more treatment HMOs deny, the more money they'll make.

So is the state prioritizing health care for healthy middle-income people over the sick and poor? Depends on who you ask. DSS spokesman David Dearborn says no. Toubman's predictions, Dearborn says, are "inflammatory," "painted with a broad brush," and if true, "would condemn most of the commercial health insurance market nationwide." Dearborn says it's "premature" to worry about the lack of doctors signed up for Charter Oak/HUSKY because the program's rolling out one county at a time over a number of months.

"It takes time to build a network, and it's being developed as we speak. It will get there."

David Parrella, the state's top Medicaid official, says more doctors aren't signing onto Charter Oak because they're "scared of reform," but says he expects they will shortly. "If we're in the place we are right now in a couple months, that could be a problem for HUSKY," Parrella says in a phone interview. "I'm pretty confident this is going to move and the impasse about Charter Oak contracting will be addressed."

Toubman has his doubts. Memos have surfaced that show Charter Oak's architects hoped to avoid the kinds of costly chronic cases that drag health plans down. Just this month, Parrella told a panel of peers the Charter Oak plan is "based on the assumption that it would attract a young and healthy population. It is not for a higher risk pool. If we attract high-risk [people] then we will be in [fiscal] trouble."

Really? Because Rell didn't mention that during a stop at a Middletown health clinic last week. She hailed the Charter Oak plan as the cure for those who HMOs won't touch because of chronic ailments. "There is no prohibition of pre-existing conditions," the governor said. True, but Parrella's comment would seem to signal the Rell administration hopes that higher-risk cases go elsewhere.

The governor's fond of saying that Charter Oak's not "a Cadillac plan." It's a Ford. Maybe a Ford Focus: no frills, but a perfectly good starter car. Let's hope it doesn't turn out to be a Pinto instead.