Connecticut officials have launched a new state-run healthcare proposal following the failure of several controversial and potentially costly bills earlier this year.

State Comptroller Kevin Lembo issued a request for proposals Sept. 26, seeking partnerships between the state and health insurance carriers for new contracts with hospitals to renegotiate reimbursement rates. 

"We are preparing for a new market-altering dynamic where the state will ensure that corporate healthcare interests are better aligned with the interests of patients, healthcare providers and the state of Connecticut health plan," Lembo said in a statement.

He said the plan outlined in the RFP benefits employers because:

  • The state will be at the negotiating table representing employers during the reimbursement rate discussions
  • The state will motivate providers to avoid duplicate testing 
  • Patients will have access to information allowing them to make better healthcare decisions
  • Behavioral healthcare will be given priority 

Employers are the biggest health insurance stakeholders in Connecticut, with 54% of residents covered by employer-sponsored health benefits, which explains the state's relentless pursuit of this market. 

RFP Notice

The RFP notice criticizes employer plans, claiming businesses have ceded control, responsibility, and oversight to health insurance carriers, giving employers little leverage over their plan options. 

The state employee healthcare plan is self-insured, meaning the employer assumes the financial risk for providing healthcare benefits to its employees. 

Employers have offered self-insured plans to their employees since the inception of the Affordable Care Act in 2010.

CBIA and other groups opposed state-run healthcare proposals introduced during the 2019 legislative session, including a measure expanding the state employee municipal partnership plan to small businesses.

That proposal did not reduce small business healthcare benefit costs and raised serious questions about the viability of the state's municipal partnership plan.

State Plan Lost $10 Million

The comptroller's office administers the plan, which lost $10.3 million in 2018, with claims exceeding premium payments by an alarming margin.

Municipalities are charged over $10,000 per employee annually to participate in the plan, which covers approximately 44,780 town, city, and other public sector employees.

For that plan to be an affordable option for small businesses, buy-in costs would have to be cut considerably or less rich plans offered.

For the state plan to be an affordable option for small businesses, buy-in costs would have to be cut considerably or less rich plans offered.

While the business community appreciates attempts to bring the state, insurance carriers, and providers to the negotiating table, the largest stakeholder group—employers—is again left out of the conversation. 

The deadline for submitting bids was Sept. 30, just four days after the comptroller's office issued the notice.

The comptroller expects to announce a partner by the end of this year, with implementation targeted for the next fiscal year, which begins July 1. 

For more information, contact CBIA's Michelle Rakebrand (860.244.1921) | @MRakebrand