This coming Monday morning, state lawmakers in Hartford, the nation’s insurance capital, will begin debate on implementing something insurers pulled out all the stops to kill at the national level — the so-called public option that would have created a government insurance program to compete with private carriers.
The setting has more than a bit of irony, since it was Connecticut Sen. Joe Lieberman whose opposition to the public option effectively assured it would not be part of the health care reform measure passed in Congress. Lieberman argued that the public option might operate so efficiently and attract so many customers that private insurers couldn’t compete, and at the 11th-hour he refused to vote for a health care reform bill if it created such an option. But perhaps Democrats can do in Hartford what they could not do in Washington.
In fact, they have already taken an important first step. While members of Congress were still debating reform in 2009, the Connecticut legislature approved a bill to establish the framework for a state-based public option. The program, called SustiNet, would create pools of people Connecticut already covers — including state workers and residents enrolled in Medicaid and other public programs —and then eventually broaden the pools to include uninsured individuals and small businesses that wanted to join. After failing to kill the SustiNet bill in the legislature, insurance firms and their business allies leaned on former Gov. Jodi Rell, a Republican, to do it in, but it became law anyway when the General Assembly overrode her veto.
Rep. Betsy Ritter, House Chair of the Public Health Committee, speaking at a press conference held on January 19th, 2011, to highlight the SustiNet bill raised by the Connecticut Legislature’s Public Health Committee.Since then, an 11-member Sustinet board of directors has been at work laying the groundwork to implement the program. If lawmakers and the new governor, Daniel P. Malloy — a Democrat who backs Sustinet but faces a massive budget deficit — can agree on how to finance the program, the nation’s first public option will be born. If implemented, SustiNet will be offered as an option along with private carriers in the state’s health insurance exchange, which will start operations on Jan. 1, 2014.
On Monday, three legislative committees will hold a joint hearing on a report issued last month by the SustiNet board sketching out how the state might proceed. Although board members and other backers believe they have the votes to implement the program, they are bracing for what they suspect will be a massive fear-mongering campaign to turn public opinion against SustiNet — a campaign funded quietly by the big insurance firms in Hartford. Among the carriers with either headquarters or sizable operations in the area are the country’s four biggest for-profit insurers: Aetna, CIGNA, UnitedHealthcare and WellPoint.
But SustiNet supporters will have to do more than brace themselves. They will have to launch a campaign of their own to counter what will indeed be a blitzkrieg of spin. They know the industry does not want a single state — and certainly not the insurance state — to create what it spent millions of premium dollars to abort at the federal level.
The fear mongering will revolve around the J-word: jobs. Just as Congressional Republicans have labeled last year’s federal legislation “The Job-Killing Health Care Law Act,” insurers and their Connecticut friends will allege that a state public option would lead to massive layoffs if people begin leaving the private market in favor of a government-run plan. It is a tried-and-true tactic that many industries — from Big Oil to Big Soda — have used when faced with the prospect of new laws or regulations that might hinder their ability to meet shareholders’ profit expectations.
The beverage industry is one of the best recent examples. It has used jobs-centered fear mongering to great success as it has mounted campaigns nationwide to defeat proposals that would impose a tax of a penny or two on sugary beverages. Such a tax, they always allege, would decimate the work crews at soft-drink bottlers, trucking companies, fast-food chains and even bodegas. The campaigns are especially effective when unemployment is high, as it is now. Big Soda is batting 1,000 so far, having defeated tax proposals in every city that has considered them to date.
With so many Hartford-area residents employed by big insurance firms — and so much potential profit at stake — SustiNet supporters can expect to see the mother of all fear-mongering campaigns unfold in the weeks to come.
The campaign more than likely will not be based on any solid or verifiable evidence that a public option might boost the ranks of the unemployed. But you can bet there will be a stack of studies predicting a hemorrhage of jobs. It’s just that most if not all of those studies will come directly or indirectly from the insurers or their business allies. In fact, most of the fear mongering will come not from the industry itself but from those allies. Who are they? Watch this space Monday to find out.
Wendell is a Senior Analyst at the Center for Public Integrity where this was originally posted on February 11, 2011.