Committee Approves Public Option, Healthcare Premium Tax

The legislature’s Finance, Revenue, and Bonding Committee approved legislation April 22 expanding state-run healthcare and a new tax on health insurance premiums.

SB 842, the vehicle this session for the proposed public option and new assessments on commercial health plans, was approved on a largely partisan basis and now awaits action in the Senate.

While the bill did advance, the meeting delivered a major blow for advocates who are pushing for an unregulated expansion of state-run healthcare.

In a surprise move last month, the Insurance and Real Estate Committee amended SB 842, adding much-needed regulatory and fiduciary oversight.

Offered by committee co-chair Kerry Wood (D-Rocky Hill), the amendment drew bipartisan support, adding two important changes: it requires the public option to be fully insured, meaning it will be subject to Connecticut Insurance Department oversight and a number of regulations that private sector carriers must follow; and it will require annual, independent audits by the state Auditors of Public Accounts.

‘Play by the Same Rules’

CBIA supported the amendment at the time of original adoption, and supports keeping the amendment on the bill moving forward.

Shortly after the bill was passed, state Comptroller Kevin Lembo, the lead advocate for the public option proposal, expressed dismay that the Finance Committee did not strip the amendment.

The bill now moves to the state Senate, where further negotiations and amendments are expected.

Despite enormous outside pressure, legislators took a key step to advance health care legislation today. Although the current language remains unacceptable and insufficient to address the health care affordability crisis in CT, today’s vote will allow negotiations to continue.

— Comptroller Kevin Lembo (@ComptrolLembo) April 22, 2021

At a press conference Thursday, Gov. Ned Lamont publicly shared his concerns with the original bill, which would have allowed the comptroller’s office to manage the plan without the fiscal and regulatory oversight that covers private sector plans.

“I don’t want the taxpayers of the state of Connecticut underwriting all the risks,” he told reporters. “I think any bill has got to play by the same rules as the other health insurance plans out there as regulated by our insurance commission.”

Premium Tax

SB 842 also includes a $50 million annual levy on commercial health plans.

CBIA joined 23 organizations who signed a letter to Finance Committee members ahead of the April 22 vote expressing opposition to the assessment and the negative effects it will have on health insurance costs for thousands of small businesses.

Assessment revenues are designed to fund expanded subsidies on the CT Health Insurance Exchange, extending coverage to undocumented residents, and expanding Medicaid.

CBIA urges lawmakers to reject this assessment, and a similar assessment outlined in HB 6447, given its duplicative nature as Congress has allocated $42 billion to fix the subsidy loophole that currently exists under the Affordable Care Act.

“I don’t want taxpayers underwriting all the risks. Any bill has got to play by the same rules as the other health insurance plans.”

Gov. Ned Lamont

Additionally, assessments continue to be the largest drivers in health insurance costs. This $50 million proposal is no different.

For example, fully-insured plans incur $359.6 million annually in assessments, taxes and fees; self-insured plans incur $74 million annually.

Those fees and assessments add $591 annually to the cost of a plan in the fully-insured market and $54 in the self-insured market.

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For more information, contact CBIA’s Wyatt Bosworth (860.244.1155) | @WyattBosworthCT