CT hospitals ‘concerned’ about proposed hospital tax in Lamont budget

Westfair Business Journal – Wednesday, February 4, 2026
By Gary Larkin

WALLINGFORD – As Gov. Ned Lamont prepares to give his State of the State address today, the Connecticut Hospital Association (CHA) expressed serious concern over his FY 2027 budget adjustment proposal related to the provider tax paid by Connecticut hospitals, warning that it threatens healthcare access and affordability.

CHA also reacted to the governor’s budget proposals related to disbanding the Office of Health Strategy (OHS) and funding to study a government-run public option health plan.

“The care Connecticut depends on is at risk under this proposed budget,” said Jennifer Jackson, CEO of CHA. “This tax proposal continues to ask hospitals to shoulder higher taxes while making little real investment in patient care at a time when financial burdens are already enormous. The result will be fewer resources at the bedside, higher healthcare costs imposed on consumers, and more strained workforce.”

She further mentioned that Connecticut hospitals already pay nearly a billion dollars each year in taxes while facing nearly $1.5 billion in annual losses due to Medicaid underpayment.

“Adding to the tax burden without meaningfully addressing this shortfall forces hospitals to make difficult choices,” she added. “It threatens access to care and weakens the state’s healthcare safety net.”

As for disbanding OHS, “CHA thanks the governor for recognizing the need to improve upon processes tied to the state’s critical healthcare responsibilities, including the certificate of need (CON) process and healthcare cost growth benchmarking,” she said. “CHA appreciates that reorganizing agency responsibilities creates an opportunity for open dialogue and meaningful, constructive reform.”

Governor Lamont’s hospital tax proposal would add an additional $100 million in new state taxes on hospitals in its first year, raising the amount hospitals will pay in taxes to $920 million in FY 2027.

Executives of hospitals in the state responded to the governor’s proposal with similar concern.

• Patrick Charmel, President and CEO, Griffin Health: “The reality on the ground for independent community hospitals like ours is stark: Medicaid today pays only about sixty‑three cents for every dollar it costs us to care for our Medicaid patients, and yet we are being asked to absorb a higher tax on top of that chronic underpayment. This is not a theoretical budget issue – at my hospital it means real cuts to programs, longer waits for appointments, and fewer healthcare resources for some of the most vulnerable people in our community.”
• Jeffrey Flaks, President and CEO, Hartford HealthCare: “Connecticut is home to the highest quality healthcare in the nation, and that is something we should all be proud of. Maintaining that standard of excellence requires investment as well as honest recognition of the challenges facing healthcare. Investing in healthcare should be a priority as it protects the workforce, ensures a focus on innovation and is an overall benefit to the state, ensuring this is the place where people want to live, work, and retire.”
• Christopher O’Connor, CEO, Yale New Haven Health: “The state’s chronic under reimbursement of Medicaid services means we are paid the least when we care for the patients that need us the most. As our state’s largest provider of Medicaid and operator of essential safety net hospitals, our Health System’s costs exceeded our reimbursement by a combined total of $450 million caring for 663,509 Medicaid beneficiaries in 2024 alone.”
• Kathleen Silard, President and CEO, Stamford Health: “While we appreciate that the governor’s proposed budget undoes the $375 million tax increase imposed in last year’s biennium for 2027, we cannot support the proposal on the table. The Office of Health Strategy’s 2023 report demonstrated that Connecticut hospitals lose approximately $1.4 billion providing care to Medicaid recipients annually. To make ends meet and enable a modest operating margin, Stamford Health and other hospitals must shift costs to commercial insurance contracts and therefore employers and working families.”

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