The Connecticut Office of Health Strategy (OHS), an agency with the dedicated mission to control and lower health care costs in Connecticut, was dissolved by Gov. Ned Lamont and the General Assembly as part of the 2026 budget package after a seven-year run that saw the office grow in size and cost, but with little change to Connecticut’s escalating health care prices.

Gov. Lamont proposed dissolving the OHS in his budget after former OHS Commissioner Dierdre Gifford stepped down in May 2025 over her involvement with a federal corruption scandal during her tenure at the Department of Social Services, and lawmakers followed suit, agreeing to end the agency and disperse its employees and responsibilities to other departments.

Although its stated mission was to keep health care costs down in Connecticut, OHS, by its own reports, had little effect, and may have just added to those costs overall. The agency’s budget grew from roughly $3 million in 2019 to more than $18 million last year, with 84 percent of that budget going to outside contractors to manage massive databases of health care information and compile reports regarding Connecticut’s health care cost benchmarking initiative.

The agency was also placed in charge of Connecticut’s Certificate of Need process, which determines whether hospitals or medical practices can expand or reduce services in an area. In concept, the agency was intended to unify multiple healthcare monitoring functions from across various state departments, better enabling the state to gather data, monitor and control costs. 

However, the agency itself was funded almost entirely with fees levied on commercial insurance policies and deposited into the Insurance Fund, and on hospitals, who had to pay millions every year to cover the salary and benefits of the agency’s Certificate of Need staff. Lawmakers in 2024 began to question both the growth of OHS’s budget and its reliance on insurance fees to pay for its staff.

Despite the growth of OHS over the past seven years, one of its primary functions in setting health care cost growth benchmarks to control costs turned out to be a failure, according to their own report, which found Connecticut’s health care cost growth had wildly surpassed their benchmarks. 

Hospitals and medical providers, furthermore, debated the veracity of some of OHS’s reporting, particularly in how the agency measured Connecticut’s Medicaid reimbursement rate, which they contend is far too low and contributing to the increasing cost pressure for those with insurance.

However, despite dissolving the agency, savings for Connecticut’s budget will likely be small. Although the agency’s budget is roughly $18 million, only three to four million of that will likely be saved as the various responsibilities are being transferred to other departments.

According to the 2025 budget, this year OHS was meant to receive $13.3 million from the Insurance Fund and $4.5 million from the General Fund. According to the fiscal analysis of the 2026 budget adjustment, however, $10.9 million from the Insurance Fund and $4.4 million from the General Fund will be transferred to various departments like the Department of Public Health  (DPH) and the Office of Policy and Management (OPM) to pay for the transferred staff, leaving roughly $3 million in potential savings to go elsewhere.

It also means that insurance customers and hospitals are still on the hook for funding these positions. Hospitals over the last four years have seen a 40 percent increase in the assessment placed on them by OHS, generally with little to no explanation other than needing more staff.

A special working group convened to determine whether the Insurance Fund was being used properly criticized OHS for its ever-expanding use of the fund to pay for more personnel. Sen. Cathy Osten, D-Sprague, and co-chair of the powerful Appropriations Committee said at the time that she failed “to see the value of a group that’s not driving down the healthcare costs,” during a September 18, 2024, meeting of the working group.

However, under this year’s budget adjustment, 11 positions and $1.2 million were moved from the Insurance Fund to the General Fund, easing at least a little pressure on the Insurance Fund. 

The DPH will take back administration of the CON process, along with 23 employees and the millions in assessments levied on hospitals. According to public hearing testimony, the transfer of those employees to DPH will only cost $2.8 million, far less than the $6.4 million hospitals were paying; the additional money was being spread across various employees not directly working on CON administration, including agency leadership.

The OPM will now take over health care cost benchmarking and house Connecticut’s All Payers Claim Database (APCD), a massive trove of healthcare data that has bounced from Access Health CT to OHS and now to OPM. 

The APCD costs roughly $1 million per year for an outside contractor to manage and industry insiders, including the Connecticut Hospital Association, question the accessibility and utility of the database, arguing it is difficult and expensive to get the data and that much is missing or not usable, even though the database is used to set healthcare cost benchmarks

However, as part of the 2026 budget, the secretary of OPM must now, in concert with the APCD Release Committee, expedite the process for releasing APCD data to healthcare providers by approving or disapproving an application within ten days and releasing the data ten days after receiving a completed data use agreement. It also allows release of raw data “to the extent permitted by law and sufficient to enable the entity to assess, verify, or challenge,” the health care benchmarking determinations.

OPM is also required to revise the APCD’s methodology for analyzing data and “examine the contribution of material changes in clinical risk payment methodologies that have a material change on cost growth measures.”

Senate President Pro-Tem Martin Looney, D-New Haven, opposed the dissolution of OHS in testimony before the Appropriations Committee, saying the agency was developed after a year-long study conducted by Bailit, a company that would go on to be one of OHS’s top contractors, that that the study’s top recommendation was creating OHS to “so that all of the healthcare oversight tools would reside in one agency.”

Although Looney admitted the agency needed improvement and “has lost some trust and needs to repair some relationships,” he argued abolishing it would be a step backwards, and that lawmakers should exercise the same level of care and study that went into the creation of OHS before dismantling it.

“At least the same level of care should be taken before demolishing the agency and spreading its embers across other agencies,” Looney wrote in testimony. “OHS doesn’t need to be abolished, it needs to be reformed, strengthened and allocated the resources necessary to do its job.”

Representatives of Connecticut’s insurance companies, however, supported the measure; they argued the Insurance Fund should no longer be used to prop up state employee costs for the programs previously housed under OHS and instead be paid through the General Fund.

“For several years, the operations of OHS have been funded through assessments on insurers deposited into the state’s Insurance Fund,” wrote Susan Halpin of the Connecticut Association of Health Plans. “As a result, the costs of these activities have been borne largely by a single sector of the state’s economy—insurers and, ultimately, the employers, families, and individuals who purchase coverage.”

“The amendment transfers $4.4 million and 41 positions in the General Fund and $10.9 million and one position in the Insurance Fund from OHS to various agencies in FY 27 to account for costs related to the functions and positions that each agency is taking on due to the elimination of OHS,” according to the budget’s fiscal analysis.

Republish This Story

Republish our articles for free, online or in print, under a Creative Commons license.