“They Think They Are Screwed”

The nation’s largest health insurer, UnitedHealth saw its profits boom last year during the COVID-19 pandemic, as people largely avoided going to the doctor and put off elective procedures, activities that cost insurers money.

The company reported more than $15 billion in profit in 2020, an 11 percent increase over the previous year. In the year prior to that, the company made headlines after its CEO netted more than $50 million. Now, UnitedHealth is taking action to protect its windfall, as lawmakers around the country weigh reforms to address soaring health care costs.

In Connecticut, where UnitedHealth asked regulators to approve large increases in premiums for this year, the company and other major insurers have undertaken a massive campaign to block a new legislative attempt at passing a state-level public option.

Hartford, the state capital, is a major hub for health insurers, which account for 25,000 jobs, according to the industry. The state has long been a battleground between the health insurance industry and those fighting for reforms.

In 2009, Connecticut passed a law that paved the way for the state to establish a public option. Six months later, though, Congress passed the Affordable Care Act (ACA), and the state never set up its own insurance option. Former Connecticut senator Joe Lieberman played a key role in killing the public option provision in the ACA, refusing to support the bill if it included a public option.

Connecticut lawmakers proposed public option plans in 2019 and 2020. Once again, legislators in the Democratic-held state house are considering public option legislation, backed by state comptroller Kevin Lembo and the chair of the Senate insurance committee, state senator Matthew Lesser. The bill passed the Senate finance committee on Thursday, and it will receive a vote on the floor of the Senate before going to the assembly.

The legislative proposal to create a public option in Connecticut would authorize the state comptroller to offer the state’s current health care plan for public employees to certain individuals, small businesses, and nonprofit employers. The so-called Connecticut Partnership Plan is currently administered by Anthem.

Additionally, the proposal would raise funds for subsidies for those people by instituting a tax on health insurance companies, similar to the Affordable Care Act’s health insurance tax. The health insurance tax, which cost Connecticut health insurers $300 million annually, was repealed in 2019, and the repeal took effect earlier this year. The new tax would cost insurers in the state $50 million.

Democratic governor Ned Lamont opposes the legislature’s bill and has instead proposed his own health insurance reform plan, which would tax insurance companies to fund more subsidies to buy health insurance on the state exchange.

Front group campaigns backed by the health insurance industry are working to kill the legislation, and they are spending millions of dollars to kill state-level public option legislation being considered in Colorado, too. They argue that if states set up even modest public option plans, it could be the start of a slippery slope toward a single-payer system where there’s no need for health insurance companies.

Hausman, the UnitedHealth Group spokesperson, additionally argued in an email that “public option proposals will disrupt current coverage platforms by reducing access to providers, shifting costs to small businesses, increasing taxes, and eliminating jobs.”

Tom Swan, the executive director of the Connecticut Citizen Action Group, a group advocating for the public option legislation, told us that health insurers “are so threatened by this because if a public option passes in the insurance capital of the United States, they think they are screwed. And we hope that’s true.”

“Really Grassroots”

During the webinar, Azam, the UnitedHealth Group VP, claimed that a state-run health insurance option would create an “unlevel playing field” in competing against private insurers, claims that have been widely repeated in the industry’s campaign.

When asked by an employee attending the webinar what it means for the premiums to be artificially low, she responded, “When I say ‘artificially low,’ I mean that we wouldn’t even be allowed to have premiums that low, because we are required to have revenues match claims. Whereas the state is not requiring itself to do so. And taxes have been increased to cover those state costs.”

Azam was repeating the false claim propagated by the Connecticut Business & Industry Association that the state’s Connecticut Partnership Plan does not charge high enough premiums to cover costs.

Lembo, the state comptroller, debunked that claim in a February letter, explaining that a 2019 legislative fix had brought premiums on par with the cost of care. The actual reason the partnership’s premiums are lower is that the difference between claims and premiums is not used to generate profits, according to a March report from the comptroller’s office.

In the presentation, Azam also laid out the company’s strategy for tanking the public option proposal. “We have three major coalitions in Connecticut in addition to our grassroots efforts,” she said.

The presentation slide listed the Stop the HIT national coalition, a group that was formed to push for the repeal of the original health insurance tax in the ACA; Insurance Matters to CT, a coalition of insurers, businesses, and trade groups in the state organizing against the public option; and Connecticut’s Health Care Future.

Connecticut’s Health Care Future is a campaign from the Partnership for America’s Health Care Future, a state-focused affiliate of the health care industry front group set up to oppose Medicare for All and a public option at the federal level.

“This national group has major members including the American Hospital Association, AHIP [America’s Health Insurance Plans], physician groups, business groups, and the Connecticut arm of it is really grassroots,” Azam said.

Connecticut’s Health Care Future has made radio ad buys, and Azam said during the February webinar that it is also “aggressively engaged in letter writing campaigns.”

She added: “There are over 10,000 members of ‘My Care, My Choice,’ a grassroots platform in Connecticut, that are engaged in letter writing, and we also have a targeted letter writing campaign to key members of the insurance committee in the legislature.”

Azam said that other insurers and trade groups are working to deploy their employees against the Connecticut legislation.

“We also have trade groups doing employee engagements like this and member engagements. And the other carriers in Connecticut, the other major health insurance carriers, are doing engagements like we are today as well,” she said.

Azam noted that Connecticut’s Health Care Future had recently done polling in the state and found that “consumers are very concerned about a government takeover of health care.”

The group’s polling was conducted by Locust Street Group, a public relations and grassroots consulting firm. They claimed that only 36 percent of respondents support a Connecticut public option, and only 40 percent support the idea of a national public option plan.

Meanwhile, a Fox News voter analysis survey of the American electorate, conducted just before the 2020 election, found that 74 percent of Connecticut voters support the idea of “changing the health care system so that any American can buy into a government-run health care plan if they want to.”

While Azam had previously said that Connecticut’s Health Care Future is “really grassroots,” when an employee asked how they can get involved with the group, she responded: “I don’t know that individuals can join the Connecticut for Health Care Future coalition. I think it’s mostly businesses.”