Lawmakers Fail to Adopt Healthcare Cost Measures

Numerous proposals designed to reduce the cost of healthcare failed to win passage in the legislature this session, with at at least one bill that won approval destined to increase costs.

Among the failed bills was a proposal that drastically reduced the cost of health insurance for small employers.

HB 6712 eliminated all assessments and user fees levied on health carriers offering qualified health plans through the state exchange and reduced the premium tax on domestic and foreign insurance companies from 1.5% to 1%.

While that bill won bipartisan support from the Insurance and Real Estate Committee, it was later referred to the Appropriations Committee, which did not act on it before the reporting deadline.

CBIA testified in support of the bill, arguing that eliminating the annual exchange assessment will return $32 million to small employers and individuals on the exchange.

In addition, reducing the premium tax to 1% cuts annual health insurance costs for a family of four by approximately $540.

Benefit Mandates

CBIA also testified against SB 976, which featured more than two dozen new costly health benefit mandates. That bill died in the Insurance Committee earlier in the session.

Year after year, Connecticut employers list healthcare costs as one of their top concerns. Through cost-sharing, business owners cover an average 76% of premiums on behalf of their employees.

Connecticut has the sixth highest healthcare expenditures per enrollee in the country. That figure directly correlates to the number of state health benefit mandates.

Connecticut has the sixth highest healthcare expenditures in the country, a figure that directly correlates to the number of state health benefit mandates.

Mandates drive up costs because with each new requirement, insurers must expand coverage to include additional services or devices.

This increases the cost of health insurance premiums, and those increases are passed directly onto enrollees.

These increases are detrimental to small employers (defined as under 50 FTE), who are not required to offer health insurance pursuant to the Affordable Care Act, but choose to do so.

Mandate Review Bill

Last week, the House approved HB 6711, which provides much-needed cost-benefit information for bills that impose new benefit mandates for fully insured health plans.

However, the Senate failed to act on the bill before the legislature’s June 7 adjournment.

While the House approved the bill, the Senate failed to act before the legislature’s June 7 adjournment.

Under the bill, the Insurance Committee chairs and ranking members will be required to review each proposed mandated health benefit bill that received a public hearing in any committee during the regular legislative session and utilize the Insurance Department’s Health Insurance Benefit Review program. 

Connecticut leads the nation in the number of mandates imposed on the fully insured market, and the bill ensures that legislators understand both the costs and benefits of a proposed mandate before the bill receives a vote.

Currently, the Office of Fiscal Analysis, a nonpartisan legislative office that provides cost impact analysis on the state budget for proposed bills, does not price out benefit mandates.

Step Therapy, Prior Authorization

SB 6, which was eventually included in the budget implementer bill, will have the biggest negative impact on small employer premiums in the coming years.

The bill, a priority for Senate Democrats, prohibits health carriers from requiring a prospective or concurrent review of a recurring prescription drug used to treat an autoimmune disorder, multiple sclerosis, or cancer that they already approved through utilization review.

SB 6 will have the biggest negative impact on small employer premiums in the coming years.

The bill also reduces how long an insurer can require an insured to use step therapy for prescription drugs from 60 to 30 days and prohibits step therapy for drugs used to treat schizophrenia, major depressive disorder, or bipolar disorder.

The bill only applies only to fully-insured plans, roughly 15% of the insured market in Connecticut, and is yet another sweeping mandate that will negatively impact premiums in the individual and small group markets.

Step therapy and prior authorization, used by public and private payers alike, are important tools that hold down the utilization of medically unnecessary procedures and pharmaceutical drugs.

Hospital Deal

A major Lamont administration priority to reduce healthcare costs passed both chambers after a deal was struck between state officials and the Connecticut Hospital Association last week.

HB 6669, which received overwhelming bipartisan support in both chambers, modifies the certificate of need program, prohibits the anticompetitive healthcare contracting practices of anti-tiering, all-or-nothing, anti-steering and gag clauses, implements a new drug discount card program offered by the state Comptroller, and mandates registration of pharmaceutical representatives and manufacturers with the state.

Reinsurance Program

For the third year in a row, the Senate Republican priority health insurance bill died after not being acted upon by the House.

The bill cleared the Insurance Committee earlier this year on an unanimous vote.

SB 1116 required the Office of Health Strategy to apply for and fund a Section 1332 waiver to establish a reinsurance program to lower premiums on the individual health insurance exchange.

According to Senate Minority Leader Kevin Kelly, an analysis commissioned by the state-run health insurance exchange estimated that a reinsurance program will reduce premiums between 6% and 29.5%, depending on the investment made by the state.

If the 1132 waiver was approved by the Centers for Medicare and Medicaid Services, the bill required OHS to annually determine the amount necessary to fund the reinsurance program, up to $21.2 million..

The bill also incorporated hospitals into the state’s healthcare benchmarking and spending target law, as well as requiring off-campus hospital-based facilities to bill independently from their associated hospital or hospital system.

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