The stunning 2019 defeat of aplan to implement such a public option in Connecticut shows howdifficult it may be to enact even "moderate" solutions thatthreaten some of America's most powerful industries. (Image:Shutterstock)

Health care costs were rising. People couldn't afford coverage.So, in Connecticut, state lawmakers took action.

Their solution was to attempt to create a public healthinsurance option, managed by the state, which would ostensiblyserve as a low-cost alternative for people who couldn't affordprivate plans.

Immediately, an aggressive industry mobilized to kill the idea.Despite months of lobbying, debate and organizing, the proposal wasdead on arrival.

Related: Support for a public option isgrowing

"That bill was met with a steam train of opposition," recalledstate Rep. Sean Scanlon, who chairs the legislature's insurance andreal estate committee.

Through a string of presidential debates, the idea of a publicoption was championed by moderate Democrats ― such as former SouthBend, Indiana, Mayor Pete Buttigieg, Minnesota Sen. Amy Klobucharand former Vice President Joe Biden ― as an alternative to asingle-payer "Medicare for All" model. Those center-left candidatesagain touted the idea during the Feb. 25 Democratic debate in SouthCarolina, with Buttigieg arguing such an approach would deliveruniversal care without the political baggage. (Buttigieg andKlobuchar have since ended their presidential bids.)

The public option has a common-sense appeal for many Americanswho list health care costs as a top political concern: If themarket doesn't offer patients an affordable health care insurancethey like, why not give them the option to buy into agovernment-run health plan?

But the stunning 2019 defeat of a plan to implement such apolicy in Connecticut — a solidly blue, or liberal-leaning, state —shows how difficult it may be to enact even "moderate" solutionsthat threaten some of America's most powerful and lucrativeindustries. The health insurance industry's fear: If the averageAmerican could weigh a public option — Medicare or Medicaid or someamalgam of the two — against commercial plans on the market, theymight find the latter wanting.

That fear has long blocked political action, said ColleenGrogan, a professor at the University of Chicago's School of SocialService Administration, because "insurance companies are at thetable" when health care reform legislation gets proposed.

To be sure, the state calculus is different from what a federalone would be. In the statehouse, a single industry can have anoutsize influence and legislators are more skittish about job loss.In Connecticut, that was an especially potent force. Cigna andAetna are among the state's top 10 employers.

"They became aware of the bill, and they moved immediately tokill it," said Frances Padilla, who heads the Universal Health CareFoundation of Connecticut and worked to generate support for thepublic option.

And those strategies have been replicated at the national levelas a national coalition of health industry players ramps uplobbying against Democratic proposals. Beyond insurance, healthcare systems and hospitals have joined in mobilizing against bothpublic option and single-payer proposals, for fear agovernment-backed plan would pay far less than the rates ofcommercial insurance.

Many states are exploring implementing a public option, and onceone is successful, others may well follow, opening the door to afederal program.

"State action is always a precursor for federal action," saidTrish Riley, the executive director of the National Academy forState Health Policy. "There's a long history of that."

Virginia state delegate Ibraheem Samirah introduced a new publicoption bill this session. In Colorado, Gov. Jared Polis isspearheading an effort. And Washington state is the furthest along— it approved a public option last year, and the state-offered planwill be available next year.

But in 2019, Connecticut's legislators were stuck between twodiametrically opposed constituencies, both distinctly local.

Health costs had skyrocketed. Across the state, Scanlon said,small-business owners worried that the high price of insurance wassqueezing their margins. A state-provided health plan, the logicwent, would be highly regulated and offer lower premiums and stablebenefits, providing a viable, affordable alternative to businessesand individuals. (It could also pressure private insurance to offercheaper plans.)

A coalition of state legislators came together around aproposal: Let small businesses and individuals buy into the stateemployee health benefit plan. Insurers' response was swift.

Lobbyists from the insurance industry swarmed the Capitol,recalled Kevin Lembo, the state comptroller. "There was a lot ofpressure put on the legislature and governor's office not to dothis."

State ethics filings make it impossible to tease out how much ofAetna and Cigna's lobbying dollars were spent on the public optionlegislation specifically. In the 2019-20 period, Aetna spent almost$158,000 in total lobbying: $93,000 lobbying the Statehouse, and$65,000 on the governor's office. Cigna spent about $157,000:$84,000 went to the legislature, and $73,000 to the executive.

Anthem, another large insurance company, spent almost $147,000lobbying during that same period — $23,545 to the governor, and$123,045 to the legislature. Padilla recalled that Anthem also madeits opposition clear, though it was less vocal than the othercompanies. (Anthem did not respond to requests for comment.)

A coalition of insurance companies and business trade groupsrolled out an onlinecampaign, commissioning reports and promoting op-eds thatargued the state proposal would devastate the local economy.

Lawmakers also received scores of similarly worded emails fromCigna and Aetna employees, voicing concern that a public optionwould eliminate their jobs, according to documents shared withKaiser Health News. Cigna declined to comment on those emails, andAetna never responded to requests for comment.

Connecticut's first public option bill — which would let peopledirectly buy into the publicly run state employee health plan ―flamed out.

So lawmakers put forth a compromise proposal: The state wouldcontract with private plans to administer the government healthoption, allowing insurance companies to participate in thesystem.

The night before voting, that too fell apart. Accounts of whathappened vary.

Some say Cigna threatened to pull its business out of the state if a public option wereimplemented. Publicly, Cigna has said it never issued such a threatbut made clear that a public option would harm its bottom line. Thecompany would not elaborate when contacted by KHN.

Now, months later, both Scanlon and Lembo said another attemptis in the works, pegged to legislation resembling last year'scompromise bill. But state lawmakers work only from Februarythrough early May, which is not a lot of time for a major bill.

Meanwhile, other states are making similar pushes, fightingtheir own uphill battles.

"It really depends on whether there are other countervailingpressures in the state that allow politicians to be able to go fora public option," Grogan said.

And, nationally, if a public option appears to gain nationaltraction, Blendon said, insurance companies "are clearly going tobattle."

They're going to go after every Republican, every moderateDemocrat, to try to say that … it's a backdoor way to have thegovernment take over insurance," he said.

Still, when President Barack Obama first proposed the idea of apublic option as part of the Affordable Care Act, it was put asideas too radical. Less than a decade later, support for the idea ―every Democratic candidate backs either an optional public healthplan or Medicare for All ― is stronger than it ever has been.

So strong, Grogan said, that it is hard for people to understand"the true extent" of the resistance that must be overcome torealize such a plan.

But in Connecticut, politicians say they're up for a new battlein 2020.

"We can't accept the status quo. … People are literally dyingand going bankrupt," Scanlon said. "A public option at the statelevel is the leading fight we can be taking."

KaiserHealth News is a nonprofit news service coveringhealth issues. It is an editorially independent program of theKaiser Family Foundation, which is not affiliated with KaiserPermanente.

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