WEEKLY UPDATE: 02/19/26
The Connecticut Hospital Association’s (CHA) Jennifer Jackson, CEO, penned an op-ed titled “Ensuring Connecticut’s Taxes On Hospitals Support Patients,” published in CTNewsJunkie on Monday, February 16. The article further elevates hospitals’ serious concerns about the harmful hospital tax provision in Governor Ned Lamont’s fiscal year (FY) 2027 budget adjustment proposal. It also outlines a better approach to ensure the state’s hospital tax supports patient care.
“Connecticut is at a crossroads. The governor’s budget proposal would perpetuate the cycle of high taxes on and underinvestment in care provided by hospitals. The proposal will hurt patients, families, and the communities that depend on local care,” Jackson wrote. “This provision threatens to repeat history — a government failure involving the tax that resulted in a lawsuit and historic settlement between hospitals and the state in 2019 that Gov. Lamont himself helped solve.”
The hospital tax is a major source of revenue for the state. States can use hospital tax dollars as the state share for Medicaid services, allowing them to access federal matching dollars to pay for Medicaid services. Disputes over the state filling budget holes with hospital tax revenue, rather than using it to benefit hospitals and their patients, resulted in a historic settlement between the state and Connecticut hospitals in 2019. The settlement expires in June 2026.
“If we all work together — lawmakers, the governor, hospitals, and caregivers — and structure the tax with a patient-first approach, we can turn a harmful proposal into a solution that begins to address the mounting pressures driving up healthcare costs and hindering access,” Jackson said.
Click here to read the op-ed in CTNewsJunkie.
Click here to learn more about Connecticut’s hospital tax.
Legislative Testimony Underscores Harm of Proposed Tax Increase, Urges State To Raise Medicaid Rates
On Wednesday, February 18, CHA’s Paul Kidwell, senior vice president of policy, testified before the Appropriations Committee in opposition to the hospital tax provisions in HB 5032, An Act Adjusting The State Budget For The Biennium Ending June 30, 2027.
“We oppose the governor’s proposal,” Kidwell said. “The tax program should be used to support patient care at hospitals; the governor’s proposal does not. The tax program should seek to maximize federal funding for Connecticut; the governor’s proposal leaves money on the table. Hospitals that receive tax-funded payments should pay taxes; the governor’s proposal does not require it. Hospitals that want to participate in the tax, like Connecticut Children’s, should be able to; the governor’s proposal prohibits it.”
Kidwell pointed to the impact of continued inaction to address the nearly $1.5 billion in losses local hospitals face every year because Medicaid pays far less than what it costs hospitals to care for patients covered by Medicaid. This state fiscal year, hospitals will pay $820 million in taxes. Of that amount, the state retains a little more than $500 million for its own purposes and uses approximately $300 million to draw down federal matching dollars to support Medicaid payments to hospitals. Adding to local hospitals’ tax burden, without meaningfully addressing massive shortfalls, forces hospitals to make impossible choices to sustain essential services, and it weakens the state’s healthcare safety net.
CHA also highlighted a better approach to the hospital tax.
“We believe the hospital tax program should maximize federal revenue and ensure that 100% of any increase in the tax is used to improve hospital reimbursement for patient care and begin to address Medicaid underpayment. We believe Connecticut Children’s should participate in the tax program and that Waterbury Hospital should fully participate in the program as a taxpaying hospital, maintaining its current status.”
Watch the video recording on YouTube here.
Read CHA’s written testimony here.
Learn more about the impact of the governor’s proposed hospital tax increase here, or visit protectctcare.org.
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