Lamont, Democrats divided on Connecticut Option health plan

HARTFORD -- Competing Democratic proposals for a so-called Connecticut Option health plan epitomize the differences between Gov. Ned Lamont and Democratic legislators in how they would accomplish a shared goal of making health care and health insurance more affordable in the state.

The contrast in approach and scope reflect a running policy disagreement between the Democratic governor and Democratic majorities in the legislature over a state-funded public option health insurance plan that goes back seven years to Lamont's first days in office.

The governor's version of the Connecticut Option would be a publicly created but privately run health plan for small businesses, nonprofit organizations and individuals. Lamont has proposed a $1 million study to analyze the design and development of the health insurance initiative.

Meanwhile, Senate Democrats are proposing a publicly funded, $200 million Connecticut Option that would offer health care tax credits for families earning up to 600% of the federal poverty level; establish a basic health program for low-income residents who earn too much to qualify for the state Medicaid program; and a dedicated budget account to pay for this health coverage.

But with about a month left in the 2026 legislative session, House Speaker Matt Ritter, D-Hartford, said he doubts the legislature will be establishing any new health insurance plan.

"It is not going to happen," he said. "I like to think we're good up here, but that would be a tall order."

Ritter said the legislature will be pressed to find the time for full House and Senate debates on a new health insurance plan before the session's May 6 adjournment deadline.

Under the Affordable Care Act, a basic health program is an optional state health insurance program that may offer coverage for individuals with incomes from 133% to 200% of the federal poverty level who earn too much for Medicaid but cannot afford to purchase plans through a state's health insurance marketplace. The federal government provides states with funding equal to 95% of the federal subsidies that would otherwise have been available to the individuals on the health insurance exchange. States must establish special trust funds to deposit the federal money.

In addition to the federal subsides, Senate Democrats propose transferring $200 million of the approximately $330 million remaining from a $500 million state contingency fund into a new Connecticut Affordable Health Care Trust Fund to pay for their proposed Connecticut Option subsidies. The Emergency Federal Response Fund was created in November to respond to federal budget cuts and policy changes.

House Democrats also have proposed a basic health program and a dedicated budget account to hold the federal subsidies and any other funds state law requires to be deposited. Both Democratic bills require the state to apply for required federal waivers to establish a basic health program.

But the Lamont administration said it opposed the two competing Democratic bills. Administration officials told legislators that establishing a basic health program would require time and resources to perform actuarial analysis; contract a private insurer or managed care organization to offer standard health plans; and meet other operational requirements. It also would require a detailed federal approval process that would take into account the effects on Medicaid and other related health care programs.

At this time, only Minnesota, New York, Oregon and the District of Columbia have established a basic health program in the 11 years since states were given the option, according to the Centers for Medicare and Medicaid Services.

House and Senate Republicans are supporting a bill that proposes to authorize so-called association health plans that allow trade groups, chambers of commerce and professional associations to join together to offer large group health plans to members. The legislation also directs the state Office Policy and Management to conduct a study of the feasibility of a Connecticut Option plan that would be designed by the state but administered by private insurers.

The Human Services Committee voted March 19 to advance all three Democratic health care bills, and the Insurance and Real Estate Committee advanced the Republican-backed association health plan bill on March 12. The four bills now await action by the House and Senate.

Senate President Martin Looney, D-New Haven, is not ready to rule out the possibility of Democrats and Lamont negotiating a deal on a plan.

"Those are important bills and hopefully we'll be able to move forward on those in consultation with the administration," he said. "Because clearly, one of the major ongoing challenges we have is to try to provide affordable health insurance, but also quality insurance that does not leave people out, that doesn't punish people with preexisting conditions and all of it."

Looney said there is a need for action due to the steep premium increases for hundreds of thousands of state residents after enhanced federal subsidies for purchasing policies on the state's health care exchange under the Affordable Care Act expired Dec. 31. Congress had declined to extend them.

In December, Lamont announced he would use $70 million from the contingency fund established a month earlier to partially offset the loss of the enhanced ACA tax credits for more than 100,000 low- and middle-income families for a year. At this time, more than 148,000 Connecticut residents are enrolled in qualified health plan coverage through Access Health CT.