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Proposed Legislation Would Have Connecticut Comptroller Run Public Health Option for Small Businesses and Nonprofits

  • Democratic lawmakers in Connecticut again pursue public option for health insurance in the state
  • Similar plan in 2019 failed under fierce opposition from the insurance industry and business trade groups
  • Public hearing on current proposal set for Tuesday

Democratic lawmakers in Connecticut are preparing a new effort to set up a public option for health insurance in the state, two years after the failure of a similar measure.

The proposal, issued in the Connecticut State Senate, would have the state comptroller establish and manage a state-run health insurance plan for nonprofits and small businesses with less than 50 employees. A public hearing on the bill will take place at 11 a.m. on Tuesday in the Insurance and Real Estate Committee, and can be viewed via Zoom and YouTube Live.

A public option would allow the state government to play a direct role in establishing premiums and policies, which residents could then purchase as plans offered through participating private insurers. Proponents say a public option would offer low-cost health insurance to those who are unable to afford a private plan.

Last November, a coalition of state legislators, activists, and health experts announced their intention to pursue a public option in this year’s legislative session. The group said at that time that the COVID-19 pandemic has demonstrated the importance of adequate health insurance, and suggested that the incoming legislature could be more supportive to the measure. Democrats made net gains of six seats in the Connecticut House of Representatives and two seats in the Connecticut State Senate in the 2020 election.

State Comptroller Kevin Lembo is optimistic that legislation establishing a public option will pass this year. He also suggested that there is broad support for a public option, releasing the results of a poll showing that 72 percent of Connecticut small business owners support a public option to compete with private insurers.

Insurers, business trade organizations, and health plan groups have been vocally opposed to a public option, saying it would be unsustainable and potentially harm Connecticut’s economy. These groups have been skeptical about the government’s ability to provide health coverage better than private insurers, and worry that a public option could pose a greater burden to taxpayers if they need to cover any deficits in the program.

The Connecticut Business & Industry Association says a December poll of 231 of its small business members found that 63 percent were opposed to a public option. CBIA also points to a municipal partnership plan to cover city and state workers in Connecticut, which lost $31.9 million in 2019, as an example of government inefficiency in managing health care. Lembo has defended that plan, saying losses were expected in the plan’s early years, that it has been adjusted when necessary to minimize any premium increases, and that no municipalities have abandoned it.

A public option proposal failed to gain traction in Connecticut in 2019. A public option measure won support from several moderate Democratic presidential candidates in 2020 as an alternative to a single-payer Medicare for All option.

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