Connecticut Public Option: Potential Ramifications on Provider Finances and Patient Access to Care

As Connecticut lawmakers consider ways to improve health care during the 2021 legislative session, policy proposals to create a new public insurance option are up for consideration. While policymakers are floating a public option as a means to achieve increased coverage and lowered health costs, they should also consider the impact the policy might have on access to care in the state. Public programs typically reimburse providers significantly below commercial rates, meaning offering a state public option at a reduced premium might require significantly lower provider reimbursement rates to ensure solvency and achieve cost containment.

As the number of Connecticut residents covered by the Connecticut Public Option and other public programs increase, the impact on provider finances could also have unintended yet significant ramifications for patients. Faced with an influx of patients on public programs, providers could be forced to reduce services or change the way they provide care to remain afloat, potentially threatening access to care in communities across the state.

The Connecticut Public Option

In 2021, Connecticut legislators introduced Senate Bill 842 (S.B. 842), which would create a new public coverage option (“Public Option”) in Connecticut.¹ Modeled off the state’s Partnership Plan for non-state public employees and employers, the Public Option would be managed and overseen by the Connecticut Office of the State Comptroller and administered in partnership with private insurers.² Connecticut’s Public Option would be available to multiemployer plans (typically unions), nonprofits, and small businesses (50 employees or fewer).

Policymakers introduced the Connecticut Public Option in an effort to provide an affordable coverage option for consumers and decrease health care costs. However, to ensure cost containment while holding down premiums for consumers, the Public Option will likely require reduced reimbursement rates, significant tax increases, or a combination of the two.

Footnotes:

1: Insurance and Real Estate Committee. “Substitute for Raised S.B. No. 842 Session Year 2021.” Connecticut General Assembly, 2021. https://www.cga.ct.gov/2021/fc/pdf/2021SB-00842-R000640-FC.pdf.

2: Insurance and Real Estate Committee. “Substitute for Raised S.B. No. 842 Session Year 2021.” Connecticut General Assembly, 2021. https://www.cga.ct.gov/2021/fc/pdf/2021SB-00842-R000640-FC.pdf.