Senator Kelly Votes in Support of Pro-Health Care, Pro-Jobs Settlement to End Gov. Malloy’s Abuse of CT Hospitals

December 18, 2019

State Senator Kevin Kelly (R-Stratford) today voted in support of a settlement between the state of Connecticut and the state’s hospitals that will result in the withdrawal of a lawsuit against the state challenging Governor Dannel P. Malloy’s abuse of the hospital tax system.


“This settlement is a pro-jobs, pro-healthcare agreement. It puts an end to expensive litigation and will greatly benefit taxpayers, hospital workers and patients,” said Sen. Kelly. “Gov. Malloy and Democrat lawmakers abused the hospital tax system for many years. Promises were made, and promises were broken. Hospitals were taken advantage of to balance past budgets, ultimately hurting patients and employees. This settlement rights the wrongs of the Malloy administration, saves good paying health care jobs, and gives hospitals the tools they need to improve both health care quality and access.”


The hospital tax was initially designed to be a net gain for hospitals. Hospitals would pay a tax to the state, and the state was supposed to leverage those dollars to attain more federal funding for CT’s hospitals. However, over the years Gov. Malloy and Democrat lawmakers returned less and less of the money promised to hospitals. The hospital tax became a financial burden that took funds away from hospitals and put more strain on health care access and affordability.


“It is my hope that lawmakers will learn from this situation and will stop passing policies that leave our state open to more lawsuits, like truck-only tolls, because Connecticut taxpayers are the ones who ultimately pay,” said Sen. Kelly. “This deal recognizes the damage caused by the policies under Gov. Malloy and marks a new start to the state’s relationship supporting hospitals, growing jobs and improving quality and access to health care.”


The agreement also increases Medicaid hospital reimbursement rates by about two percent per year after years of little movement. This will reduce the shortfall that results from Medicare and Medicaid paying hospitals less than the cost of care for beneficiaries of public programs. This will enable hospitals to do more to improve the patient experience, such as investing in capital improvements and improving access to care.


The seven-year agreement will give Connecticut hospitals and their employees the stability they need to continue providing care and services to people across our state. It will also protect taxpayers from the financial risk, uncertainty and expense of ongoing litigation that resulted from Gov. Malloy’s abuse of the hospital tax system.