Connecticut’s health care outlook for 2025: Rising costs amid Trump uncertainty

CT Insider – Monday, January 6, 2025
By Liese Klein

With the prices of everything from prescription drugs to medical supplies to insurance coverage continuing to rise, Connecticut patients and health care businesses are looking for relief in 2025.

State lawmakers have plans they say will help lower health care costs — but major policy shifts promised in Washington, D.C., could add complications.

“A lot of people — and certainly us in state government — are wondering what changes that President Trump and the new Congress will make that will have a dramatic impact on us,” said Connecticut Comptroller Sean Scanlon.

The comptroller’s Healthcare Cabinet, a working group that includes medical providers and advocates, plans to prioritize health care affordability for 2025, including reforming the state’s Medicaid reimbursement system to get more funding to hospitals and front-line providers, Scanlon said.

Medicaid, a government program that covers health care for 1 in 5 Americans, currently matches state dollars with federal funding, without a limit on spending. Trump’s past pledges to turn Medicaid into limited block grants for the states could cost Connecticut hundreds of millions of dollars a year, Scanlon said.

Trump’s promise to cut insurance subsidies for plans administered under the Affordable Care Act could also boost costs for the 129,000 Connecticut residents enrolled in plans on the Access Health CT exchange.

If current federal subsidies are allowed to expire next year, net premium payments for Affordable Care Act plans would increase by an average of 79% nationwide, according to KFF, a nonprofit health research group.

Between Medicaid and Affordable Care Act coverage, about 1 million Connecticut residents could be directly impacted by Trump policy changes to government programs, Scanlon said. “That’s one thing that certainly is on our mind, and that makes budgeting a challenge,” Scanlon said.

Beyond Medicaid and ACA challenges, Scanlon said the Healthcare Cabinet would be reviving a plan to allow small businesses and nonprofits to buy into the state health plan. Known as “the public option,” the idea had been raised in prior years but was killed in 2021 after lobbying from the insurance industry, according to the Connecticut Citizen Action Group.

“A lot has changed, and the needs are worse,” Scanlon said. “I think the government has a role here, and I think that you’ll see us leading on that in 2025.”

Hospitals ask for more state help as costs surge

Insurance companies and Medicaid reimbursement rates were targeted by Connecticut hospital executives at a December press conference highlighting ongoing financial woes in the industry.

The state could see hospitals continuing to struggle in 2025 along with a paring back of services, said Jennifer Jackson, president of the Connecticut Hospital Association. Labor shortages, drug costs and “administrative roadblocks” contributed to keeping Connecticut hospital margins in the red and underperforming in nearby states, she said.

“These are real and persistent concerns for the sustainability of Connecticut hospitals, the more than 260,000 jobs that they support and the high level of care that they provide to patients, as well as the really significant investments in care that they provide to their communities,” Jackson said.

The mean hospital operating margin for Connecticut remained negative for the second straight year in fiscal 2023 at -0.5%, according to a report from analyst Kaufman Hall that was released at the hospital association news conference. The state’s Office of Health Strategy said it would release its report on individual hospital financial performance in January.

Nuvance Health, owner of Danbury, Norwalk, Sharon and New Milford hospitals, cited projected 2024 losses of nearly $150 million in its bid to merge with New York’s Northwell Health, a deal that could close in 2025 if the state gives its approval.

If approved, the Nuvance-Northwell merger will create a $20 billion health care system based in New York with 28 hospitals and 99,000 employees.

Hospital systems to battle in court over merger deal

The financial pressures on Connecticut hospitals are shaping another major health care drama set for 2025: The court battle between Yale New Haven Health and Prospect Medical Holdings over the purchase of three Connecticut hospitals.

The two health systems are set to go to court over terms announced in 2022, with Yale New Haven Health alleging that Prospect has let its properties deteriorate and the hospitals are no longer worth the original agreed price of $435 million. California-based Prospect has accused Yale New Haven Health of bad faith in the deal.

Conditions at Prospect’s hospitals in Connecticut — Waterbury, Manchester Memorial and Rockville General in Vernon — have been declining, according to employees and state regulators, who hit Prospect with a $60,000 penalty over health code violations at Waterbury Hospital in November.

Conditions at Prospect’s hospitals in Connecticut — Waterbury, Manchester Memorial and Rockville General in Vernon — have been declining, according to Yale’s allegations in the lawsuit. And in November, state regulators hit Prospect with a $60,000 penalty over health code violations at Waterbury Hospital.

A judge has combined the two systems’ lawsuits, with a trial in the case scheduled to start in April.

Prof.: Watch for Trump action on vaccines, more data breaches

Connecticut biotech firms that develop vaccines could be among the many impacted by Trump’s pick for Secretary of Health and Human Services, Robert F. Kennedy, Jr. An outspoken vaccine skeptic, Kennedy could influence policies impacting pharmaceutical companies and the more than 25,000 Connecticut residents who work in the industry.

Changes in vaccine policy would have a dramatic influence on public health as a whole and the thousands of Connecticut students training in medical fields, said Angela Mattie, a professor of management and medical sciences at Quinnipiac University.

Kennedy’s “views could have a significant impact on public health, and not in a good way,” Mattie said. “I think that’s one of the important things to look for and to speak out against.”

On the positive side, Mattie said she expects more use of artificial intelligence in health care in 2025, with technology impacting every aspect of care, from scheduling to diagnosis to treatment planning.

“There’s a lot of promise, and there’s a lot of need to balance privacy issues, ethical issues,” Mattie said. “That’s going to be interesting and evolving.”

The increased use of AI in crippling cyberattacks will also present a growing challenge to hospitals and insurers in 2025, Mattie said. A ransomware assault on the Change Healthcare billing system paralyzed health systems nationwide in February.

“Health care will continue to be a target for cybersecurity breaches,” Mattie said. “Hospitals and health care facilities will have to continue to become sophisticated and put money into the infrastructure to protect the data.”

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