Watered-Down SustiNet, Modified Exchange Bills Advance

With only a few days left in the legislative session, each chamber has approved modified versions of this year's most significant healthcare bills.

The House approved a much watered-down version of the controversial SustiNet proposal (HB 6308), and the Senate passed an altered version of the health insurance exchange bill (SB 921).

Both proposals must now be approved by the opposite chamber.

New healthcare exchange

Under SB 921, Connecticut would begin the process of establishing a health insurance exchange as required under federal healthcare reform.

By 2014, each state has to set up its own new health insurance marketplace (known as an “exchange”) for individuals and small companies. However, the first deadline is actually much sooner. By Dec. 31, 2012, states have to pass muster with federal regulators by having simplified insurance offerings, a standardized application and a consumer-friendly online presentation.

SB 921 would establish the framework for Connecticut's exchange. While the bill allows individuals with healthcare experience to serve on the exchange’s board of directors, it prohibits anyone currently working in the healthcare industry from serving on the board.

Unfortunately, this necessarily narrows the pool of qualified individuals from whose expertise and knowledge base the exchange could benefit.

SB 921 also contains some other problematic provisions (such as those enabling the exchange to be an “active purchaser”) that lawmakers need to fix before the bill advances further.

SustiNet

The amended HB 6308 (previously the health insurance pooling bill) makes numerous changes in the area of healthcare reform. Most notably, it opens the state employee health insurance plan to municipalities and certain nonprofits.

It does not make the costly expansion, on the other hand, to private-sector businesses or individuals. Nor would HB 6308 be implemented in a way that would establish a costly public option. These are very positive changes to the original SustiNet proposal.

HB 6308 also would create two new healthcare-focused groups. The first is the SustiNet Health Care Cabinet, which would evaluate the viability of various future health reform initiatives, including a public option.

The second is the Office of Health Reform and Innovation, which, among other duties, would be significantly involved in implementing of federal health reform, specifically in bringing Connecticut into compliance with federal health reform rules.

The new bill also makes changes to the rules governing standards in contracts, rescission of preauthorization decisions, regulation and licensing of third party administrators, and more.