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Rell Health Plan Casualty: HUSKY

SHELDON V. TOUBMAN

August 20, 2008

Starting Sept. 1, Gov. M. Jodi Rell will begin to force about 338,000 low-income children and parents on Connecticut's HUSKY health insurance program into HMOs. This plan will not improve the quality of their health care or save money. Rather, it will largely destroy their access to care and at an increased cost to the taxpayers.

The governor offered up tens of thousands of low-income children and their parents on the HUSKY program to entice HMOs to run her problematic limited-benefit insurance program for a small group of healthy individuals, known as the Charter Oak Health Insurance Plan. She concluded insurers would not offer the risky Charter Oak plan without profits from HUSKY. In a Dec. 5 presentation to legislators, the commissioner of the state Department of Social Services said, "DSS is combining the procurement [of Charter Oak and HUSKY] to allow the successful [HMO] bidders to balance the familiar risk and large size of the HUSKY enrollment with the less familiar and less predictable size of the Charter Oak enrollment."

But the HMOs brought in to run Charter Oak have only a few providers, with the exception of the one nonprofit HMO. Only a handful of hospitals have signed up with these HMOs. Unless this dramatically improves, coverage under Charter Oak will be meaningless, with premiums buying insurance on paper only.

Further, to entice the HMOs to run Charter Oak, the governor's plan also requires forcing the 338,000 HUSKY enrollees into these same HMOs with the same abysmal provider networks — and out of their current well-functioning, DSS-controlled plans which have reasonable access to providers. DSS data show that two of the three new HUSKY HMOs have obtained combined Charter Oak/HUSKY participation agreements with only a small fraction of health providers compared with the current HUSKY program. This violates federal law, which requires services to be available to Medicaid enrollees "at least to the extent that such care and services are available to the general public." All 338,000 HUSKY enrollees also will be moved to an HMO having a direct financial incentive to deny needed care.

Taxpayers also will be paying more for the privilege of destroying the HUSKY program: DSS negotiated the contracts with the new HMOs from a position of weakness because of the need to entice the HMOs to run Charter Oak. As a result, the contracts include about an 11 percent higher average payment to HMOs than last year, a substantially higher increase than the 2 percent annual raise the legislature appropriated. The governor does not mention any of this when talking about her Charter Oak plan.

The good news is that there is a cost-effective alternative Medicaid system used by most states: primary care case management. Under PCCM, the treating doctor is paid a modest sum to coordinate all health care. When Oklahoma ended Medicaid contracts with HMOs and adopted PCCM statewide, the quality of care improved substantially and it saved money. Connecticut's legislature mandated a PCCM pilot for HUSKY to be implemented by April 1. Unfortunately, the Rell administration has not implemented this mandate.

It is positive news that the governor recognizes the need for health coverage for the uninsured. But low-income children should not be made to suffer as a way to meet that need. Decisions about the HUSKY program must be made based on what is best for HUSKY enrollees and the state's taxpayers.

The governor's planned forced march out of the current well-performing HUSKY plans and into HMOs with abysmal provider networks, in order to prop up her troubled Charter Oak plan, is good for neither. If Charter Oak can survive, it must do so separate from HUSKY.

Sheldon V. Toubman is a lawyer at New Haven Legal Assistance Association. He represents Medicaid and HUSKY enrollees.