Senate Leader: CT Budget Talks Must Address Crippling Medicaid Cuts

October 27, 2015

Courant Op-ed by Sen. Len Fasano

Gov. Dannel P. Malloy and the Democratic majority are underfunding health care for the poor more than any other state in the country. Connecticut’s already low Medicaid reimbursement rates, paired with the governor’s recent budget cuts slashing $190 million from hospitals, puts Connecticut far behind the rest of the nation in properly funding and caring for residents most in need.

Although the governor is now calling for bipartisan budget talks, he only plans to talk about plugging the nearly $120 million new hole in his budget, not restoring any of the $103 million he cut from hospitals, the poor, the elderly, the disabled and those with mental health needs. It would be a grave mistake if lawmakers limited the conversation to only new rescissions. We need to holistically rewrite this budget and provide for a more stable financial future for this state, which includes talking about Medicaid.

In recent years, Connecticut has reimbursed hospitals about 60 cents for every dollar of care provided to a Medicaid patient, the lowest rate in the nation. According to research by the Connecticut Hospital Association, the recent cuts would result in that funding dropping to about 40 cents on the dollar.

To cope with such a staggering shortfall, hospitals have to find savings elsewhere. This will directly and severely threaten accessibility for hundreds of thousands of vulnerable citizens. It could also mean employee layoffs, service reductions, longer wait times and facility closings.

We’ve already started to see some of these effects.

St. Francis Hospital and Medical Center was forced to reduce staffing and services, including pediatric services, at two Hartford clinics that serve a large Medicaid population. As a result, the number of patient visits at these city clinics has declined by the thousands, meaning children in Hartford are not getting the care they need.

Hartford HealthCare has also taken a hit. It eliminated 335 positions and $40 million in expenses after the Democrats’ budget, passed in June, enacted a first round of Medicaid cuts. Now, they’re bracing for more cuts, and have already shut down plans to merge with a hospital in Putnam to expand services.

Yale New Haven Health, which provided services for 292,000 Medicaid beneficiaries at a total expense of $214.2 million in 2013, will also be pushed to make cuts. With 1 in 5 Connecticut residents now on Medicaid, but less funding to pay for services, something’s got to give.

Under Malloy and the Democratic majority, while hospitals and patients suffer from cuts, the state has reduced its net contribution to Medicaid to zero. The hospital tax, which was designed as a way for the state to gain federal reimbursements for hospitals, has become a way for the state to bolster its own revenues, not a way to increase funding for care. Hospitals are now facing taxes of more than half a billion dollars and a crippling effective tax rate of 94 percent. Federal matching funds and the provider tax paid by hospitals now comprise 100 percent of Medicaid hospital payments, essentially eliminating the state’s investment in Medicaid. Malloy has said that Connecticut is subsidizing hospitals. The reality is Connecticut’s hospitals are now subsidizing the state.

The governor recently announced a plan to restore less than 10 percent of the Medicaid funding he cut to six small hospitals. Although reinstatement of the small hospital funding is needed, the governor’s plan is woefully insufficient. It ignores our urban communities. It also fails to create long-term structural change in the way our state treats health care providers, something Republicans made a major focal point in our alternative budget presented earlier this year.

Instead of leading us into a modern era of health care, Malloy and Democrats’ policies are causing Connecticut, especially our cities, to regress. To prevent a health care crisis, lawmakers on both sides of the aisle have to take action now. I’m encouraged that the governor wants to talk, but the discussion must include the governor’s initial round of cuts, future deficits and ways to truly make the budget sustainable and predictable.

Len Fasano, a Republican, is Senate minority leader and represents the 34th Senate District including East Haven, Durham, North Haven and Wallingford