SustiNet plan starts taking shape

    Connecticut state employees, HUSKY and Medicaid recipients and municipal workers could all share the same health plan within the next three years if a proposal by the SustiNet board of directors goes forward.

    The 11-member SustiNet board met Thursday to begin making decisions about what to recommend to the General Assembly at the end of the year.

    The board’s recommendations are likely to get the attention of Governor-elect Dan Malloy. His running mate, current Comptroller Nancy Wyman, is the co-chair of the board. She will be the state’s next lieutenant governor.

    Kevin Lembo, the other co-chair and current state healthcare advocate, was elected last month to be the state’s next comptroller.

    SustiNet modeling done by the board’s consultants show the state saving money each year of the plan’s operation, but no one has estimated start-up costs yet. The amount of savings varies widely depending on how broadly SustiNet is offered and how successful it is in influencing provider reforms.

    Many of the state savings are caused by new federal dollars flowing under the health care reform law passed earlier this year. The most ambitious estimates have the state netting nearly $400 million in savings in a sample year of the program.

    Anya Rader Wallack, one of the Massachusetts-based consultants guiding the SustiNet board, led the board through topics where the board did not have a consensus yet. She said differences among board members “were less ideological than practical.”

    After some discussion, board members agreed SustiNet should begin by insuring state and municipal employees and Medicaid and HUSKY participants, while retaining the possibility of expanding to include small business employees, nonprofit employees or selling coverage on the state’s insurance exchange.

    The base estimate for SustiNet enrollment is 620,000 without offering SustiNet beyond current state groups. This number includes estimates of bringing 206,000 new people into insurance markets thanks to the effects of federal reform.

    Opening SustiNet to other employers would add more than 150,000 people to the plan, according to estimates, but only provide insurance to 1,000 to 3,000 previously uninsured residents. Similarly, offering the plan for sale on the state’s exchange would add 324,000 people to SustiNet, while again bringing insurance to 1,000 to 3,000 previously uninsured residents.

    The board also endorsed the Basic Health Plan, an optional federal program to expand Medicaid to people just above the current income limits. This option would add 30,000 to the SustiNet pool, while providing insurance for about 1,000 people previously uninsured.

    The Basic Health Plan is revenue positive for Connecticut because of generous federal subsidies.

    Future legislative changes and ongoing administrative changes to the federal reform law will have a big impact on SustiNet.

    “The federal reform is really a gift,” said board member Paul Grady. “But it may be a short-term gift.”

    “Unless Congress changes the law, it’s set in stone,” said Stan Dorn, senior research associate at the Urban Institute and SustiNet advisor.

    The enrollment estimates were developed based on models of how much money SustiNet could save, allowing its product to be cheaper.

    “The price of a product changes and people’s behavior changes,” said Rader Wallack.

    Combining Medicaid and health insurance state employees is not without complexity, despite being the first goal of SustiNet.

    Joseph McDonagh, a board member, said collective bargaining agreements might require SustiNet to have a two-tiered offering.

    Dr. Robert Zavoski, medical director for the Department of Social Services, said there would be inefficiencies in having two different plan offerings, but it would be necessary. “If they are completely the same, you’re going to lose your shirt,” he said.

    The board agreed SustiNet should be a quasi-government agency, similar to the Connecticut Health and Educational Facilities Authority. The current SustiNet board would continue in place, with the possibility of expansion.

    The board also agreed to seek increases in Medicaid reimbursement rates right away. “Otherwise you can say goodbye to SustiNet,” Wyman said.

    The board members expressed hope that increased Medicaid rates would increase access for patients on the plan, while also reducing the costs shifted to patients with private insurance.

    Another option the board considered is expanding eligibility for Medicaid before 2014 when certain provisions of federal reform take effect. However, this is expected to cost between $100 and $160 million, according to Dorn.

    Lembo had announced at a Nov. 18 meeting that SustiNet would meet behind closed doors Dec. 2, but the board did not go into executive session for its discussion.

    The next SustiNet board meeting is from 9 a.m. to noon on Dec. 15 at the Legislative Office Building, room 1E.

    According to consultants for the board, the group will complete its recommendations by Dec. 19 in order to have them to the legislature by Dec. 31.