🔒As high-deductible health plans grow in popularity, some state officials want to rein them in

Health insurance policies with increasingly high deductibles have become the norm in Connecticut, and now, a top Democratic state lawmaker and his allies are taking aim at restricting or potentially even eliminating them.

State Sen. Martin Looney, long an agitator of the state’s powerful health insurance lobby, filed or co-sponsored several bills this year that aimed to crack down on high-deductible health plans, including one that would have outright banned the policies.

The ban bill never made it to a public hearing, let alone any kind of vote, but that may change next year. A task force created by lawmakers late in the recent legislative session is preparing to study the financial ramifications of high-deductible health plans on consumers, and ways to ensure access to affordable health care.

Any move to restrict or eliminate high-deductible plans in the state would face major opposition, as it could upend employer-sponsored health insurance that now covers a majority of Connecticut’s private-sector workforce.

Employers have been increasingly drawn to high-deductible plans because they help reduce health insurance premiums, but they also typically require consumers to pay more out of pocket for their care when they need it.

Members of the new task force are being appointed by legislative leaders and Gov. Ned Lamont. It’s still early, but some ideas Looney and fellow reformers may pursue include pro-rating deductibles for consumers who join a plan mid-year; capping deductibles below current federal minimums; fiddling with coverage requirements; or even restricting lower-income residents from accessing the plans.

Some of those changes, however, could lead to higher premiums for employers and workers, according to insurers and the Connecticut Business & Industry Association.

Another major complicating factor is that certain changes might imperil the tax-advantaged status of health savings accounts regulated by the IRS, or more broadly run afoul of federal law.

Ted Doolittle, the state’s Healthcare Advocate who sits on the 12-member task force, said high-deductible policies are best suited for upper-income households. While he favors reforms — such as closing a current loophole that can force some patients who switch jobs mid-year to pay a double deductible — and hopes to find a way to reduce the prevalence of high-deductible plans, he said he doesn’t want to take the plans away from those who want or benefit from them.

“It’s a complex area we don’t want to wade into without being sophisticated and exploring it correctly,” Doolittle said.

The task force, which must report its findings and recommendations to the legislature in early February, just in time for the start of the 2020 legislative session, is a chance to “mull this over a little bit outside the confines of a hurried legislative session,” he said.

Various task forces have come and gone in Connecticut, and they can sometimes be a way for legislators to punt on thorny or complex issues.

But in an interview, Looney said he’s not backing down from pursuing reforms.

“It seems to be becoming more and more of a problem for people who find themselves in a position where their policies become unaffordable,” the 26-year Senate veteran from New Haven said. “The task force will give us solid information to come back with next year to help with other legislation.”

While no significant high-deductible plan legislation became law this year, Looney said there are signs of bipartisan support, as evidenced by the Senate’s near unanimous passage in late May of a patient protection bill, S.B. 42, which called for the task force, beefed up emergency room insurance coverage, and placed limits on out-of-pocket expenses insurers can charge.

It never reached a House vote, but Looney said he’s OK with that and hopes the task force’s work will help reinforce reform desires.

“Our concern was the insurance industry might try to pick the bill apart a little bit and counterattack in the House,” he said, sharing a bit of his legislative tactical thinking.

Big bills, skipped care

Recent studies have shown that patients with high-deductible health plans are more likely to delay medical care and have more trouble paying medical bills.

Less than half of enrollees have enough in their savings accounts to cover their deductible, according to a recent survey by the Kaiser Family Foundation and Los Angeles Times.

Avoiding care reduces healthcare spending, but some question whether saddling consumers with medical debt is worth it.

Among them is Doolittle, who said high-deductible plans tend to simply mask the true cost of health care.

He said it’s time to assess whether high-deductible plans’ purported cost-lowering strategy of giving consumers financial “skin in the game” has been effective or worthy policy.

Besides his official state work representing consumers in insurance-coverage disputes, Doolittle said he’s also had a high-deductible plan, so he views the topic from a few angles.

“I started to have this perception that really was a pretext, and really what was going on was the insurance companies were just trying to keep the premiums down, because that’s what you fight on with your competitors,” he said.

He said the high-deductible structure can be cruel, since big patient bills come amid times of injury and illness. ”From a policy perspective, is it desirable to load the extra cost onto families exactly when they are sick?” he asked.

Insurers, businesses concerned

Task force members so far also include several doctors, a hospital executive, an insurance lobbyist, and a tax attorney. There are several more slots to fill, including a small employer and a consumer. The task force could begin its work in September.

As the group takes shape, Susan Halpin, chief lobbyist for the Connecticut Association of Health Plans, said health insurers’ main concerns will be policy ideas that could increase premiums.

“We’re always concerned about any legislation and its unintended impact,” Halpin said. “From the insurance perspective, we want to make sure that consumers have access to a range of affordable healthcare policies and high-deductible plans remain one option toward that end and we would hate to see that compromised in the marketplace.”

Michelle Rakebrand, a lobbyist for the CBIA, which represents a range of employers that offer insurance to their workers and also runs its own private benefits exchange for member companies, warned lawmakers earlier this year that proposed reforms could simply shift the cost of care away from deductibles and toward premiums.

”While CBIA understands that [high-deductible plans] may offer a slimmer benefit package, for many small employers that is the only affordable alternative,” Rakebrand wrote.

Doolittle said the clout of the state’s insurance industry, which helped defeat a public-option-style health plan in the final days of this year’s legislative session, will make reforms challenging.

“It’s hard to get stuff done here in this respect because Connecticut is the insurance capital,” he acknowledged. “It’s super hard politically to have that conversation. But that’s what needs to happen.”

Correction: An earlier version of this story gave an incorrect number of seats on the high-deductible task force. There are 12 appointments, not 13.