Connecticut hospitals serve as the healthcare safety net for their communities, caring for all regardless of ability to pay.
Connecticut hospitals also continue to face significant economic headwinds that threaten their financial health and sustainability. The consistent gap between the cost of providing patient care and payment to hospitals for those services, particularly from Medicare and Medicaid (called HUSKY Health in Connecticut), creates pressing financial challenges.
The underpayments by Medicare and Medicaid require hospitals to seek to make up the difference from commercial health insurers, leading to a cost shift from government payers to commercial insurers.
How Hospitals Are Paid
Hospitals receive payment for patient services from government insurance programs like Medicare and Medicaid, from commercial insurance companies, and from patients who pay (in part or in full) for services themselves.
Hospitals receive reimbursement from Medicaid for only about 62% and from Medicare for only 74% of what it costs to provide the care to those patients. In 2023, this underpayment for services amounted to nearly $2.8 billion, and Connecticut hospitals incurred $1.43 billion in Medicaid losses and $1.38 billion in Medicare losses.
