Budget Impact on HealthCare

June 18, 2015

Hartford, CT – State Senator Scott Frantz (R-Greenwich) released the following statement today re: Hartford Hospital’s decision to lay off employees in response to state budget reductions in Medicaid rates and high hospital taxes.

“What was feared is now becoming reality. The consequence of tax hikes on our health care system is the eroding of the system. In the last two days alone we have seen two healthcare clinics in the greater New Haven area close eliminating more than 30 jobs and now this.

“Today’s admission from executives at Hartford Healthcare that Medicaid payment reductions from the state will amount to more than $100 million over the next five years – now means more than 300 layoffs.

“Back in February, I asked the Office of Policy and Management Secretary why hospitals are being asked to pay more in taxes through the proposed budget. The answer from OPM Secretary Ben Barnes; “Why do you rob banks? That’s where the money is.”

“Despite our best efforts to stop this bad budget from being passed it was approved by the legislature and contains many changes that are negatively impacting hospitals and health care providers. Those changes include:

  • Reductions in Medicaid provider rates by $10 million annually
  • Restrictions in the utilization of Urban and Industrial Sites Tax Credits by Hospitals by 50%
  • Increases taxes on CT’s hospitals by $211.8 million annually
  • Enacts a Hospital Provider Tax on ambulatory surgical centers which never had a public hearing resulting in higher healthcare costs

“It is my sincere hope that during the next few weeks the legislature can rethink some of the items in this budget. It is critical we find common ground before more jobs are lost.”