Hospitals Continue Advocacy To Protect Healthcare From Harmful State Budget Proposals

With less than two weeks left in the 2025 Legislative Session, the Connecticut Hospital Association (CHA) continues to urge legislative leaders and other members of the General Assembly to reject and remove harmful spending and revenue provisions included in the governor’s and the Appropriations and Finance, Revenue, and Bonding Committees’ state biennial budget proposals.

Specifically, certain provisions applicable to state fiscal year (FY) 2027 — the second year of the biennium — would cause irreparable damage to hospitals and health systems.  CHA is requesting that lawmakers remove two provisions harmful to hospitals from the proposed budgets.  The proposals would: 

• Increase the amount hospitals pay in taxes by $140 million in FY27
• Reduce payments to hospitals by $100 million in FY27 for services provided to state employees and non-Medicare eligible state retirees 

Rebasing the hospital tax, one of the budget proposals, would impose an even higher levy on hospitals, which already pay more than $800 million in taxes each year.  Reduced payments for state employee/retiree care would result in unsustainable losses to hospitals and limit patients’ options for care.

Additionally, the budget language would allow the Department of Social Services (DSS) to determine payment amounts to individual hospitals, excluding the legislature from the process.  The policies would allow the state to withhold supplemental payments from all hospitals in future years if even one hospital is delinquent in paying taxes.

Critically, the budget proposals do nothing to ensure the Medicaid program is paying hospitals fairly for the care they provide, forcing hospitals to absorb a massive $1.4 billion shortfall from chronically low Medicaid reimbursement every year.  The policies also make it more difficult for the legislature to support hospitals through enhanced Medicaid rates in the future.

CHA stresses that uncertainty regarding the future of Medicaid and the federal commitment to the program is an important reason not to advance these harmful policies in the budget but rather begin work soon after this year’s legislative session to find a post-settlement agreement that addresses the future of the hospital tax and Medicaid rates.

CHA also continues to air radio and video messages focusing on state budget negotiations and urging lawmakers and the governor to avoid policies that would harm healthcare and instead pursue solutions that address chronic Medicaid underfunding.

Connecticut hospitals continue to engage in collaborative advocacy efforts, including strategic initiatives to push back against harmful proposals and advocate for better solutions to support hospitals, the healthcare workforce, and the patients for whom they care.

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Click here to learn more about CHA’s advocacy to protect patient care and strengthen hospitals.