Democrats in legislature roll out ‘public option’ health insurance as insurers, business question cost controls

March 07-- Mar. 7--Democrats in the General Assembly on Thursday promoted legislation to extend state health insurance to small businesses, employees and others, but the initiative faces resistance from insurers and critics who say state involvement in the industry would do little to rein in rising costs.

Sen. Matt Lesser and Rep. Sean Scanlon, co-chairmen of the legislature's insurance and real estate committee, surrounded by physicians and others, said their proposal for a so-called public option is limited.

"We're not building a massive bureaucracy. We're building off the state's existing health care infrastructure and we're asking the insurance industry to lead," Lesser said at a news conference at the Capitol. "Connecticut is the insurance capital of the world and this program builds on that."

Scanlon said lawmakers are looking to "work with our friends in the insurance industry and not oppose them."

Legislation would modify requirements related to private employer enrollment in the state employee plan and expand the variety of plans available to private employers. It would authorize the comptroller to offer coverage to small employers.

America's Health Insurance Plans said a public option and buy-in are not the solution because a standardized public option in the individual market "only shifts costs elsewhere."

Unintended consequences could include increased costs of coverage for those enrolled in other plans and the destabilization of the health insurance marketplace, AHIP said.

The Connecticut Business & Industry Association said a new health insurance market could lead to an increased likelihood of destabilization because of potential changes in the risk pool. Premiums could rise if a "disproportionate share" of individuals with greater healthcare needs enroll, the business group said.

If individuals with a lower risk choose to participate, the remaining risk pool in the market would be more unstable and put pressure on the exchange plans offered through AccessHealth CT, Connecticut's health insurance marketplace.

Stephen Singer can be reached at [email protected].

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