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Connecticut—Update on Healthcare Reform Initiatives


Email Alert

By Jennifer N. Willcox*

December 3, 2008

Conventional wisdom would not expect Connecticut, long known as the insurance capital of the United States, to be at the forefront of health reform initiatives, but 2008 saw a number of efforts at major change. Connecticut's part-time legislature will not go back into session until January 2009, so reviewing the status of the 2008 efforts can be helpful in predicting what the state's General Assembly may attempt in 2009. Given the state's projected budget deficits, however, significant healthcare reform in the "Land of Steady Habits" appears unlikely in the coming year.

Charter Oak Health Plan

Governor M. Jodi Rell received a fair amount of press coverage last year for her Charter Oak initiative, a "public-private partnership" that would offer coverage through private managed care plans to adults who have been uninsured for at least six months and who are ineligible for other state medical assistance. The plan has no income maximum, but provides premium subsidies for individuals at 300% of the federal poverty level or less. Although no pre-existing condition exclusions are allowed, participating managed care plans can impose maximum deductibles of $1,000, a maximum 20% cost-sharing after the deductible is met, an annual benefit limit of $100,000, and a lifetime benefit limit of $1 million [Public Act 07-2 (June Special Session)]. Three managed care companies signed contracts to offer the Charter Oak program, and enrollment started on July 1, 2008. Controversially, the state's Department of Social Services (DSS) "linked" participation in the Charter Oak plan to
participation in the state's State Children's Health Insurance Program (SCHIP) plan, Healthcare for UninSured Kids and Youth (HUSKY), requiring managed care companies and providers to participate in both programs despite uncertainty about the demographics of the Charter Oak population and low reimbursement. Governor Rell announced last week that she was willing to "delink" participation in the two programs, although it is not clear whether this change will encourage additional participation in Charter Oak. Hospitals and physicians in Connecticut have been slow to sign on with Charter Oak, and advocates and legislators have expressed concerns that the Charter Oak networks in place thus far are inadequate to serve the 19,200 people that are estimated to enroll in the first year.

The Governor's step to delink Charter Oak and HUSKY may forestall further legislative activity on the Charter Oak front, but Democratic legislators have criticized other features of Charter Oak, including the benefit limitations in the program, such as lack of mental health coverage and the requirement that applicants go six months without any coverage in order to be eligible. News reports repeatedly refer to the "troubled" Charter Oak program, so the 2009 legislative session may see legislative efforts to rework it.

Hospital System Strategic Task Force

Governor Rell also convened a task force on hospital systems which released its report and recommendations in January 2008. The recommendations included improving the recruitment and retention of physicians and other healthcare providers; taking steps to alleviate overcrowding in emergency rooms; and adopting measures to reduce the "cost shifting" of losses from underfunded government programs and self-pay patients to commercial (usually employer-based) insurance. Certain recommendations were considered by Governor Rell in developing her budget proposals for the 2009 fiscal year, and a bill implementing some, but not all, recommendations of the report was brought forward in the 2008 legislative session. However, the bill died in the state House during the budget wrangling, and it is expected that legislators will return to the topic in the 2009 session.

HealthFirst Connecticut Authority

The HealthFirst Connecticut Authority was established in 2007 and is an initiative of the Democratic leadership in the state General Assembly. The members of the working group include representatives of insurance companies, labor, hospitals, consumer groups, employers, and state agencies. The working group was charged with: (1) examining and evaluating different alternatives for providing Connecticut residents with quality, affordable, and sustainable healthcare; (2) recommending ways to contain the cost and improve the quality of healthcare; and
(3) recommending ways to finance quality, affordable healthcare coverage. The working group has been meeting for over a year, and was required to report back to the state General Assembly by December 1, 2008. The final report likely will generate some legislative proposals, but any proposals with significant dollar signs attached will face a steep uphill battle given the state's current financial condition. In addition, one of the chief proponents of health reform in the state and a driving force behind establishing the HealthFirst Connecticut Authority and the Primary Care Access Authority (discussed below), former House Speaker Jim Amman, has resigned his seat to prepare for a run for governor in 2010.

Primary Care Access Authority

Like the HealthFirst Connecticut Authority, the Primary Care Access Authority was established by the state Democratic leadership. Members include the commissioners of several state departments, the state Comptroller, and representatives of various provider groups. The Primary Care Access Authority is charged with: (1) determining what constitutes primary care services; (2) inventorying the state's existing primary care infrastructure; (3) developing a universal system—which maximizes federal financial participation in Medicaid and Medicare—to provide primary care services, including prescription drugs, to state residents; and (4) developing a plan for implementing the system. Under the legislation creating the Primary Care Access Authority, the universal primary care system report must be developed by December 31, 2008, and the plan for implementing the system must be developed by July 1, 2010. While legislative proposals will likely result, the Primary Care Access Authority faces the same economic and political realities as its sister authority, the HealthFirst Connecticut Authority, and passage of any significant legislation based on the work of the Primary Care Access Authority seems unlikely.

Connecticut Healthcare Partnership

During the 2008 legislative session, the state House Majority Leader and the Secretary of State led the charge to create the Connecticut Healthcare Partnership. The plan would allow small businesses, nonprofits, and municipalities to purchase health benefits through the state employees' pool. The theory behind the Partnership is that small businesses and nonprofits can achieve lower prices in negotiating with insurance companies by leveraging the clout of the large state plans. The bill implementing the Connecticut Healthcare Partnership passed the state House and Senate, but ultimately was vetoed by Governor Rell, due in part to opposition from state businesses and insurance companies. Many businesses and municipalities feared this bill could lead to higher costs, given the richer benefit packages enjoyed by state employees. The Governor's signing statement, however, indicated her support for the general principles behind the bill, and Democratic supporters have vowed to bring the bill back in the 2009 session.

*We would like to thank Jennifer N. Willcox, Esquire (Pullman & Comley LLC, Bridgeport, CT) for providing this summary.

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