February 6, 2013
Malloy's Budget Plan

CT hospitals would suffer a $550M cut

Hartford Hospital

Connecticut's 30 hospitals are slated to lose $550 million in state funding over the next two years under a two-year budget plan pitched on Wednesday by Gov. Dannel P. Malloy.

HartfordBusiness.com review of Malloy's detailed budget plan indicates the acute caregivers' funding loss is mainly related to the elimination of the state's uncompensated care funding to hospitals, reductions in Medicare reimbursements and changes that are coming as a result of federal health care reform.

Yale-New Haven Hospital is slated to be the biggest loser under Malloy's budget plan, facing $102 million in funding losses over the next two years

Hartford Hospital will lose $50 million over the next two fiscal years, while St. Francis Hospital and Medical Center is being hit with reductions totaling $38 million.

Malloy's budget director Ben Barnes said Wednesday that the state has decided to accelerate the phase out of uncompensated care funding to hospitals to help close billion budget deficits over the next two fiscal years.

Meanwhile, federal health care reform is expanding eligibility for the state's Medicaid program, but not providing extra funding to cover those costs until Jan. 1 2014. In the meantime, Connecticut must pay the tab for the expanded coverage, and hospitals are being asked to shoulder that burden.

Part of the reason uncompensated care funding, which pays for care hospitals provide to the uninsured, is being eliminated is because the federal health care law is expected expand insurance coverage to hundreds of thousands of uninsured residents in the state.

That is being done through the expansion of Medicaid and the creation of a health insurance exchange, which will provide tax credits and subsidies for the uninsured to buy health insurance.

With more people having insurance, it means hospitals will essentially have more paying customers, which will offset some of funding cuts from the state, Barnes said. But that won't begin to happen until 2014, leaving potentially significant holes in hospital budgets this year.

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