SustiNet Advances with Dubious Changes

Despite strong concerns voiced by the business community and Governor Malloy’s administration, two legislative committees approved the SustiNet health plan (HB 6305) this week. This bill would set up a first-in-the-nation health insurance public option that would compete against private industry and place Connecticut’s general fund at risk.

What’s more, the Public Health Committee made a rather curious change to HB 6305 in an apparent effort to bring SustiNet into compliance with recently enacted federal healthcare reform.

Under federal reform, Connecticut must establish a health insurance marketplace, known as an “exchange,” by 2014. And under the federal requirements, only fully licensed products will be able to be sold in the exchange. However, SustiNet is envisioned to be a self-insured program, which, by definition, is not a licensed insurance product—and therefore not consistent with federal reform.

In an effort to get around this problem, the Public Health Committee added language to the bill stating that “SustiNet G [the SustiNet plan that would be sold to employers] shall not be deemed an unauthorized insurer … or a multiple employer welfare arrangement.”

With this change, the committee is simply declaring that SustiNet can be sold inside Connecticut’s soon-to-be-created exchange. Their declaration, however, doesn’t change the facts.

Despite this somewhat disingenuous attempt, CBIA is hopeful that discerning minds in the legislature will understand that when dealing with federal compliance, this kind of maneuver won’t work.

Here's how the Insurance Committee voted on HB 6305.

Here's how the Public Health Committee voted on HB 6305.