Connecticut’s insurance industry faces uncertain future under ‘Medicare for All’ bill proposed by Bernie Sanders and backed by Blumenthal

April 11-- Apr. 11--When Sen. Bernie Sanders rolled out a "Medicare for All" plan on Wednesday that leaves a reduced role for insurance companies dominating Connecticut's economy, Sen. Richard Blumenthal was at his side.

Sanders' latest "Medicare for All" proposal would upend commercial insurance companies, an industry the Vermont socialist said is "all about greed and profiteering."

Blumenthal, a Democrat, appeared with Sanders at a Washington, D.C., news conference announcing the bill and said he is "prouder than ever" to push for Medicare for All. In a statement he said later he hears from constituents "struggling with America's health care system" and supports several pieces of legislation providing access to affordable and high-quality insurance.

"I look forward to continuing discussions with patients, doctors and the insurers to help advance that goal," Blumenthal said.

His colleague, Sen. Chris Murphy, supports other health insurance reform plans that would not eliminate the role of private insurers such as Aetna and Cigna, based in the Hartford area.

There are approximately 16,000 employees at health insurers in Connecticut, most of them working for Aetna, now a subsidiary of CVS Health Corp., Cigna and United Healthcare.

The industry's trade group, America's Health Insurance Plans, said nearly 700,000 individuals in Connecticut are covered by large group, small group and individual plans.

Sanders' plan is "just one more proposal for government-run health care," AHIP said.

Customers "have choice and control over their coverage, options, and treatment," said Kristine Grow, AHIP's spokeswoman.

Sanders' proposal would replace job-based and individual private health insurance with a government-run plan that guarantees coverage for all with no premiums, deductibles and only minimal copays for certain services. In this latest version, Sanders added coverage for long-term care.

John Aloysius Cogan Jr., an associate professor of law at the University of Connecticut School of Law, said insurance companies would process claims, which is not done by the federal government, and thus could still play a significant role.

"This is a significant task," he said.

Insurance companies would make sure correct claims are filed, provide for accounting, follow through on appeals if claims are denied and other work, Cogan said.

"A lot of it is what insurance companies do right now," he said. "They would bid for government contracts. They wouldn't go away. They would change."

But Spencer Perlman, managing partner and director of health care research at Veda Partners in Bethesda, Md., said Medicare for All would prohibit private entities from duplicating government programs.

"It would legislate out of existence" private insurers, he said.

Sanders, in announcing his plan, denounced pharmaceutical and insurance companies.

"Please do not tell us this is a rational health care system," he said. "It is about whether we maintain a dysfunctional system which allows the top five health insurance companies to make over $20 billion in profits last year."

Some Democratic 2020 hopefuls point to their support of Medicare for All to prove their progressive credentials. But other Democrats say it's not politically or economically feasible because of the large tax increases required, preferring instead to stabilize the Affordable Care Act and use it to expand coverage.

Four of Sanders' fellow senators and rivals for the Democratic nomination have signed onto the updated single-payer health care proposal: Sens. Kirsten Gillibrand of New York, Cory Booker of New Jersey, Kamala Harris of California and Elizabeth Warren of Massachusetts.

House Speaker Nancy Pelosi has been skeptical about Sanders' plan.

Republicans, meanwhile, cite Medicare for All as Exhibit A in their own 2020 narrative depicting a radicalized Democratic Party steering toward "socialism."

Perlman said chances are slim that Medicare for All will become law. The industry, while strongly opposed, is "not storming the castle" because Medicare for All is "the impossible dream," he said.

"It's not happening. This is not viable to move forward," he said.

Democrats who generally favor a government role in health insurance would need significant majorities in the House of Representatives and Senate with a Democratic president to enact Medicare for All, Perlman said. And even Democrats are divided on specifics.

With an expansion of government involvement in health care with Medicare's passage in 1965 and the Affordable Care Act in 2010, Congress and the president left in place private insurance that dates to the end of World War II, he said.

Several independent studies of Medicare for All have estimated that it would dramatically increase government spending on health care, from about $25 trillion to $35 trillion or more over 10 years. A recent estimate from the Political Economy Research Institute at the University of Massachusetts at Amherst suggests the cost could be much lower.

Paying for Medicare for All would require "massive tax increases or massive deficit spending" as the federal government takes over a significant share of the economy represented by health care, Perlman said.

"That's banana republic type of stuff," he said.

Reporting by The Associated Press is included in this report.

Stephen Singer can be reached at [email protected].

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