Legislative Democratic leaders held a press conference on January 28 to unveil a legislative proposal that would increase the state’s Medicaid reimbursement rates, which have largely remained at 57 percent since they were last adjusted in 2007. However, recent actions by President Donald Trump’s administration that paused funding for grants and loans loomed large over the press conference, with Democrats expressing uncertainty about what the move means for federal taxpayer funding Connecticut receives for many state programs.

Speaker of the House Matt Ritter, D-Hartford, said there is a “lot of chaos” in Connecticut across the country and added that as the day goes on, he expected people would hear more about litigation to stop “what on its face is an illegal order.”

On Monday, a memo from the Office of Management and Budget (OMB) ordered all agencies to temporarily pause disbursing grants and loans by 5 p.m. on January 28 that may be related to recent executive orders Trump has issued on initiatives related to “financial assistance for foreign aid, nongovernmental organizations, DEI, woke gender ideology, and the green new deal.” The memo directs federal agencies to conduct a review of grant programs and submit detailed information on them to OMB by February 10.

Hours before it went into effect, a federal judge temporarily paused enforcement of the freeze until Monday. Connecticut joined 22 other states in suing to stop implementation of the freeze late Tuesday afternoon.

Generally, the president does have the power to temporarily defer the expenditure of some discretionary funds that have been approved by Congress. But this power is limited to contingencies, where savings can be achieved, and as directed by law. It does not allow the president to defer funding to implement policy preferences. Permanently canceling appropriated funds, a process known as rescission, requires Congressional action. In either case, the president is required to inform Congress of his intentions via a special message, which, to date, Trump has not done.

Ritter said that the commissioner of the Department of Health and Human Services had informed Democratic leaders that they could not access the Medicaid system, though it was unclear if this was due to the OMB memo. Trump administration officials have said programs like Medicare, Social Security, and food stamps should not be affected by the freeze.

Sen. Chris Murphy, D-CT, later posted on social media, confirming that the state’s Medicaid payment system had been “turned off.”

Ritter added that Democratic leaders had not wanted to cancel the press conference because they wanted to let everyone in Connecticut know what was going on nationally and because they couldn’t stop doing their jobs. He added that Democrats had put together a “well-thought-out, rational plan” that created a path to increase services, but it might have to be adjusted depending on actions taken by Congress.

The plan, presented by co-chairs of the Human Services Committee Rep. Jillian Gilchrist, D- West Hartford, and Sen. Matthew Lesser, D- Middletown, would set Medicaid reimbursement rates at 75 to 80 percent of Medicare and would be phased in over the course of several years. Lesser added the state would spend an increasing amount of money each year–$75 million, $150 million, $200 million, and $250 million–matched with support from the federal government. He emphasized that the state needs the federal government to be a partner.

According to Lesser, a study conducted by the Department of Social Services on Medicaid rates found that in cases where there are Medicaid equivalents, Connecticut is far underpaying what nearby states like New York and Massachusetts are paying. He added that 40 percent of children in the state get healthcare through Medicaid, which can make access to specialists difficult.

Lesser also stated that home healthcare workers make twice as much in Massachusetts as they do in Connecticut.

“Good luck getting someone to come to Connecticut.” Lesser said, adding that he believes the new rate reimbursement plan will help alleviate workforce issues, make Connecticut more competitive, and improve access to care.

Gilchrist added that they had heard from nonprofit behavioral healthcare providers who averaged 40 to 42 vacancies, as well as knee surgeons who said the Medicaid reimbursement rates don’t pay for the cost of a prosthetic. As a result, Gilchrist said, they take 1 Medicaid patient a year “to be nice” because they are financially losing out. She also said dental visits at community health centers cost $120 per patient due to the reimbursement race, causing those health centers to lose $10 million annually across their problems.

“It’s because of us not increasing Medicaid rates.” Gilchrist said. She added that the rate study made clear the need to establish a system that would automatically adjust the rates so “in 18 years we’re not back here saying we haven’t increased rates.”

A number of other Democratic leaders also spoke at the press conference, with their focus largely on the grant freeze and what it may mean for the state.

Senate President Martin Looney, D-New Haven, called the news “extremely disconcerting” and quoted King Lear, “the worst is not so long as we can say, ‘This is the worst.'”

“Not to be grim, but this is what’s happening.” Looney added, referencing news of the grant freeze. He added that he wouldn’t be surprised if the legislature has to return after its June 4 adjournment date to do a “substantial budget” in response to the federal government’s actions.

House Majority Leader Jason Rojas, D-East Hartford, said he knows the budget is “the biggest value statement” and talked about making investments in programs like Medicaid as a “value statement to stand by.”Senate Majority Leader Bob Duff, D-Norwalk, said that while he was proud to live in Connecticut and of the announcement Democrats were making, it was a day that needed courage. He added that people need to “speak up” and talk about the federal government “literally stopping grants down to communities today at 5.”

The Connecticut Hospital Association said they “look forward to being part of continuing conversations” with advocates and lawmakers as the Medicaid proposal moves forwards.

“The ultimate goal should be to increase Medicaid rates across the healthcare continuum. This includes hospitals where providers care for everyone who walks through their door, regardless of their ability to pay, even as Medicaid underpayment—which totaled more than $1.4 billion in hospitals in 2023—creates staggering challenges.  The goal should also include payment reforms that enable investments in the community to ensure the Medicaid program is better able to address root cause drivers of chronic disease and poor health outcomes.  The need to include hospitals in immediate efforts is crucial and becomes even more so when the hospital tax settlement expires in the upcoming biennium.” CHA said via a press release.

Republican legislative leaders also reacted to the press conference, calling it “theatrics over substance” in a press release. “

Let’s be clear: the President’s federal funding pause is far from the doomsday scenario Democrats are peddling. Their claims are nothing more than an attempt to gaslight Connecticut residents. If Attorney General Tong and other Democrat leaders invested half as much effort into lowering costs for electric ratepayers as they do defending criminal illegal aliens and librarians promoting sexualized content in schools, Connecticut families would be far better off.” House Republican Leader Vincent Candelora, R-North Branford, and Senate Minority Leader Stephen Harding, R-Brookfield, said in a joint statement.

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