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Connecticut is poised to be on the leading progressive edge of what is possible under the new federal health care law by providing a rather robust state-based public option. If the state adopts the proposed SustiNet health plan (PDF) it would integrate the many different group insurance plans the state currently provides into a unified self-insured program, provide quality automatic coverage to everyone under 200% of the Federal Poverty Level, and eventually offer a commercial “publicly-administered health plan” open to all individuals and business in the state, under the management of a quasi-government agency. Its designed to save the state roughly $300 million a year and hopefully reduce health care spending over the long-term
Brief History
In 2009, before the passage of federal health care reform, the state legislature of Connecticut, over the veto of the Republican governor, approved that creation of the SustiNet Health Partnership Board of Directors to write a proposal to expand insurance coverage and reduce cost. Early this month, the SustiNet board released their draft report (PDF) to the state legislature. The report needed to design the SustiNet proposal to take into account the new reality produced by the passage of the federal health care law. The next step is for the proposal to be turned into a law by the state government, the chances of which are good thanks to the recent election of Democratic Gov. Dan Malloy and the Democratically controlled legislature.
Three critical elements of this plan will allow the state to take advantage of increased efficiency, develop significant markets of scale, help vulnerable populations get cheaper insurance, and make a state-based public option viable.
1) Putting all those covered by the state in a single program
The basic design of the proposed SustiNet health plan is a self-insured plan that is administered by a quasi-government agency. The plan itself will focus heavily on patient-centered medical homes (PCMH) and incentives to practice evidence-based medicine.
The program would automatically cover all those who are currently being provided health insurance by the state such as state employees, retired employees, people in Medicaid and HUSKY.
By putting everyone currently covered by the state and encouraging local municipalities to buy into SustiNet it should help increase efficiency by reducing redundancies. The large customer base will give the plan the size needed to negotiate good rates. Importantly, it will automatically give it a large risk pool making it appealing to people to join.
2) Open to the individual and businesses.
In the first few years municipalities and non-profit corporations will be given the option to buy into the program. Finally, in 2014, when the health care law fully goes into effect, SustiNet will be a premium-supported commercial insurance option for individuals and businesses.
If a state tried to just create a brand new public option just for the new exchange, it is likely suffer the same problems the co-ops will by struggling to get to a viable size. There is the inherent problem that an insurance plan needs good provider networks and low rates to attract customers, but it can’t negotiate good networks and rates unless it has a large customer base.
SustiNet critically gets around this problem using the state-sponsored population to create an initial customer base. This will give it a start-up base of roughly half-a-million. In many ways, this operates as a small scale state version of Jacob Hacker’s original public plan proposal, which could piggyback on Medicare and Medicaid to negotiate rates. This general scheme is probably the only way states could assure the creation of a public option with a large enough stating size to be viable.
Similarly, if a state for some reason wanted to assure it develops a viable new CO-OP, a commitment to cover all state-provided health care populations for three years should significantly help getting to the necessarily large size.
3) Uses the “basic health plan” to cover those under 200% FPL with SustiNet
A system of subsidized private insurance exchanges is extremely wasteful. Instead of forcing people making under 200% FPL to buy expensive, low-quality, private health care on the exchange, the board recommends the state use the option to create a “basic health plan” to automatically enroll them in SustiNet.
This will allow these individuals to get better coverage at both a lower personal cost and a lower cost to the government. In addition, it will increase that important original starting pool for SustiNet.
Within the limitations of current federal law
Both the new health care bill and other federal laws like ERISA make it very hard to for states to adopt my preferred solution of single-payer health care, or even my secondary choices, like a robust national public option or a comprehensive, extremely regulated all-payer system of only non-profit mutual insurers.
Assume the state can’t get waivers from the new federal laws until 2017, and this unfortunately restricts this relatively progressive proposal. I highly commend their recommendations to limit the worthless private exchanges by using the basic health plan for people making less than 200% FPL. I’m also glad they suggest a basic design that should produce a viable public alternative to private insurance for everyone in the state. Although I would prefer SustiNet to be a fully governmental agency instead of a quasi-governmental one.
In a few days, Vermont’s health care advisory board is expected to present three proposals for reforming their health care system, which I will be looking at very closely. So far, though, this is the best proposal to deal implementing the new health care law I have seen in any state. While not prefect, if Connecticut and other states adopt this model, it will be a good step at the state level toward making decent reform out of what was frankly a pretty bad new federal law.
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That is a good example of steps forward. With the current high rise in private health insurance premiums it will be interesting to see how the exchanges come about.
Well, the bottom line is, for any real reform to happen, someone is going to have to make less money off of sickness and ageing in America. That didn’t happen with Obama’s corporate Trojan Horse. If it can happen with some State-run program, then all to the good.
this looks great and will probably serve as a fine template for other states, hopefully new york will be next
the only problem I anticipate right now with this being succesfull would be those who were against a public option actually taking credit with something like;
“SEE?…we TOLD you it was not the fed’s job it’s a LOCAL issue”
otherwise, this looks pretty good
I keep remembering the now-disgraced John Edwards’ comments when he was campaigning. He pointed out that Hillary wanted to keep the Health Insurance companies in the picture, and that he wanted them completely out of it.
Which, as I get it, is the point of single-payer…which Barack Obama smothered in it’s crib, using the robber-baron pillow.
Fabulous news, thanks for letting us know. Thanks be to God for Connecticut!
Blessings
I have no problem allowing private industry the right to compete, single payer or public option would have forced the industry to offer more service for similar prices
I had expected Vermont to be the first to come up with something like a progressive healthcare plan, but good for Connecticut. I’ll be interested to see what Vermont comes up with.
I simply don’t want the private insurance companies making almost any decisions for me or anyone I know, that is why I would be fine with something like the extreme all-payer set up like Belgium has where the insurance companies are barely anything more than non-profit co-op bank accounts.
If on top of a single payer type system you want to allow fools to actively go choice to go with private insurance instead I’ll be fine letting them do that.
Report from Vermont should come out 19th. From what they are saying I’m concerned because they seem to know they won’t be able to get their waivers from the fed. Won’t be surprised if what they ended up passing might be something like this, hopefully with added benefit like an all-payer on the exchange or strong incentives for large employees to sign up for a public system.
I’m in that camp too, but jon, believe it or not it will still present an opportunity for profit
for instance, public beaches and parks are “single payer” yet there are still beach clubs and country clubs who exploit service and exclusivity to make their profit
that’s the way health care should go as well, there for everyone to use yet a private model available to those who think they can make it work
Some sort of public option is vital to lowering health care costs and expanding coverage. Private insurers will never have the incentive to cut costs or cover more Americans without competition from an entity dedicated to both of those ideals. A public option for low-income and at-risk Americans makes sense.
http://www.sunstateactivist.org/ssablog/
At least they are exploring other things..The Dems and Republicans need to get off their ’0ne way street’ and implement what we have verses ‘repealing the whole thing’
The only way to keep Health care costs under control are both radical. You either outlaw Health Ins. and force all the providers to have to sell their wares full pop retail and see who can afford 30K Babies and 500K heart valves and 5 mil a yr. surgeons and Hospital rooms for 5K a day etc. or you have to nationalize this Industry , one or the other. The worst possible solution IMO is Obama’s forcing people into buying Health Ins. from companies that don’t even need to exist except to create paper and profits and provide no health care services..
David Dayen has a fresh cross-post up: Loughner’s Conspiracy-Fueled Rampage Has Origins on the Fringe Right
Most of the world pays less for health services, and by less I mean one half to one tenth the price because the government gets together the health care providers, finds out what their actually cost are and don’t all them to charge much more than that margin. It is all-payer and the government negotiates prices for services on behalf of all the citizens.
Beyond healthcare, I see lots of opportunities for states to just go ahead and implement policies that would be difficult to get passed in Washington. If states like CT, VT, CA, OR, NY, WI, MN take progressive steps, the rest of the nation will fall in line eventually. Trying to get things done at the Federal level is an uphill battle, and the lobbyists who represent the status quo have an easier job if they can concentrate their resources on Washington.
I know so the problem is either the Gov’t controls costs centrally or you allow the free market to do this. The only way to do that is to get the monopolists out ( the health care syndicates) who are essentially rigging the market with corrupted ( bought for) Gov’t agents like Obama et al.
I hope there’s someone in CT who will use this issue to run on against Rape Gurney Joe.
Whatever it takes to get rid of that obscenity.
yet again, new england progressive will get it right. Look at California and Hawaii for potential single payer legislation as well as vermont. Cali legislature has passed single payer twice only to be vetoed by the gubenator. Neil Abercrombie of hawaii is a major single payer advocate, and the hawaii state senate has only 1 republican out of 25 seats, dems have huge majorities in the state house as well. The left coast and new england will hopefully drag the rest of the country into the 21st century.
If Vermont can’t get single payer they should join Sustinet. Massachusetts and the rest of New England should too. Scale is going to be key here.
john– can you help me.
This is about Medicare.
-1. When you take into account the loss to seniors from cuts to privatized Medicare Advantage, but adjust for the advantage of having the progressive and final elimination of the doughnut hole in Part D Drug coverage, is this a better deal for seniors? Are we as a country getting more for our money?
-2. And are there other Medicare changes we should know about?