Future of Public Option Under Malloy Is Cloudy

Even as Gov. Dannel P. Malloy expressed concerns about the proposed SustiNet state-run health plan this week, he emphasized that he embraces its goals. He supports universal health care coverage and allowing municipalities and nonprofits to buy into the state employee insurance pool.

But the SustiNet plan also calls for offering state-run insurance to the public--the so-called public option. To many SustiNet supporters, the public option is a must-have. The insurance industry vehemently opposes it.

Malloy embraces health reform and sees the insurance industry as a key source for job growth. His take on the public option?

"He is hard pressed to see how something that has not been tried and proven effective anywhere else could be done here, especially given who we are historically, and the industries that are so prominent and important to the state economically," said Roy Occhiogrosso, a senior advisor to the governor.

Malloy believes the state is "years away, if even that, from what is currently being envisioned as a workable option," Occhiogrosso said. "The reality is we are in a place where the economics of that might not make sense."

Nonetheless, Occhiogrosso said, Malloy would be open to a compromise on SustiNet if it addresses his concerns, which include the plan's potential cost and its call to give control of more than $7 billion in state health care spending to a quasi-public agency.

"Are there discussions happening? Yes," Occhiogrosso said. "Do we hope something can be worked out that makes sense? Of course."

There are elements of the proposal that the governor, SustiNet supporters, and the insurance industry can agree on. But the public option could be a stumbling block.

The push for SustiNet grew out of a multiyear effort to promote universal health care, and has galvanized many people who want an alternative to the insurance industry, not just expanded coverage. The movement tapped into the frustration of people who believe the federal health reform law, which has no public option, did not go far enough.

Juan A. Figueroa, president of the Universal Health Care Foundation of Connecticut, which developed the original plan for SustiNet, said many of Malloy's concerns, including the governance and timing of the plan, can be addressed.

But Figueroa said any plan that moves forward must include a public insurance plan to compete with private insurers like Aetna, CIGNA and Anthem Blue Cross and Blue Shield.

"What's really more important to me is the framework for having a long-range vision and making sure that we have a new product via a public option that is offered to the public," he said. "That's the bottom line."

Insurance industry representatives, meanwhile, have pointed to pieces of SustiNet they would support, including delivery system changes like the use of medical homes and alternative payment models. Keith Stover, a lobbyist for the Connecticut Association of Health Plans, said insurers also agree with the principle of getting as many people covered as possible.

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