New Hospital Tax Model Included in Connecticut House Republicans’ Budget Proposal

The Connecticut General Assembly’s House Republican Caucus has unveiled a $27.9 billion budget adjustment proposal for fiscal year (FY) 2027 that includes a new hospital provider tax model.

The model included in the House GOP plan aligns with the approach for which hospitals have been urgently advocating — an approach designed to maximize federal funding in support of patient care while establishing a sustainable, long-term framework for the state’s healthcare delivery system that begins to recognize chronic Medicaid underpayment.

The caucus’s budget provisions, which legislators detailed during a press conference on Tuesday, April 14, mirror the commitment demonstrated by leaders of the Appropriations and Finance, Revenue and Bonding Committees, who have shared support for advancing a new hospital tax model that protects patients and preserves access to lifesaving care.  CHA applauds House Republicans for taking this action and looks forward to working with the other caucuses and the Lamont administration to enact these tax provisions.

“We urge continued momentum to advance this new hospital tax model,” the Connecticut Hospital Association (CHA) said in a statement.  “With federal changes requiring timely submission and significant demands on lawmakers during the legislative session, prompt action is essential to ensure stability for providers and for the patients and communities they serve.”

Final negotiations on adjustments to the second year of the FY 2026-27 state budget are accelerating.  Before the legislature adjourns on Wednesday, May 6, both chambers of the General Assembly are expected to approve a final spending and revenue proposal.  CHA continues to urge elected officials to build into the budget a new hospital tax model comprising five key components:

1. Increase the value of the state’s tax on hospitals to leverage the maximum amount of federal revenue available
2. Use all net proceeds of the increased tax to support patient care delivered by hospitals
3. Ensure that all non-governmental hospitals participate in the tax program (including Connecticut Children’s and Waterbury Hospital) and reserve the benefit of the tax to only those hospitals that pay the tax
4. Seek to secure a five-year deal with the federal government
5. Preserve the state’s current $500 million share of the tax benefit in the coming fiscal year, while not expanding that share

Learn more at ProtectCTCare.org.

Related News:

CHA Statement on Hospital Tax Provisions in the House Republican Budget Proposal

Now Is the Time To Fix the Hospital Tax: Connecticut Hospitals Elevate Urgency To Adopt New Model in State Budget

CHA Statement on Hospital Tax Provisions in State Legislature’s Proposed Budget