The Connecticut Hospital Association (CHA) warns that proposed tax increases on hospitals will be “devastating” in a press statement. The new law will increase taxes on hospitals by $375 million, according to the CHA. This is a higher increase than the original budget that Gov. Ned Lamont proposed earlier this year, which the CHA also spoke against.
“The tax increase on hospitals and proposed cuts to healthcare providers contained in this budget will be devastating for hospitals, their workforce, and their patients,” the CHA said in a press release. “It will leave hospitals facing a staggering cut of hundreds of millions of dollars, while the state uses federal dollars to balance its budget without any action to increase Medicaid reimbursement for care provided to patients in hospitals. These policies will move Connecticut backward in our collaborative efforts to make healthcare more affordable and accessible.”
Hospitals have been losing money in Connecticut for years, largely due to Medicaid costs. The CHA and other health groups argue that Medicaid and Medicare reimbursements are low in the state—they have not been raised since 2007—so health care providers are operating at a loss when treating Medicaid patients. As a result, the difference is made up with increasing charges on private insurance.
The state’s 2025 Healthcare Report recommended raising reimbursements for Medicaid and Medicare. There were several legislative proposals this year that would have increased reimbursement rates. However, none of those proposals made it into the final budget.
“Increasing the provider tax with no positive return for Medicaid reimbursement to hospitals hinders the state’s ability to maximize federal funds to support Medicaid,” the CHA said. “On top of this newly inflated tax increase, the comptroller’s plan to reduce payments to hospitals for services provided to state employees and non-Medicare eligible state retirees would further harm healthcare providers at a time when they are facing ongoing challenges and future uncertainty.”
On a national level, the budget bill that was passed by the House of Representatives in May would call for significant cuts to Medicaid, which would impact Connecticut’s health care systems.
“There is still time to amend the budget to best prepare the state for any federal changes on the horizon,” the CHA said. “We have been in talks with the state on the urgent need to maximize federal Medicaid funding should the federal government pull back on its commitment to the program.”
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Almost makes the CHA feel like an ordinary citizen when it comes to tax ramifications.
Our cost of living increases disappear, tax’s go up, we complain (falls on deaf ears). Your reimbursements won’t change and your tax’s go up. Seems kind of ironic doesn’t it?
Touche Gary! Medicaid has been expanded well beyond the original purpose to cover the truly needy and the financing between the Feds, CT and providers (e.g. the provider “tax”) is opaque and corrupt. Time to make some hard choices and limit Medicaid to the truly needy and ensure that providers are reimbursed for the cost of that care without incentives to game the system.