WEEKLY UPDATE: 06/05/25
In the final days and hours of the 2025 Legislative Session, Connecticut hospitals and health systems engaged relentlessly with legislators and the Lamont administration to modify and improve upon legislative proposals, including provisions contained in the fiscal year 2026-2027 state biennial budget before the Connecticut General Assembly adjourned Sine Die at midnight, Wednesday, June 4.
The Connecticut House of Representatives and Senate passed the $55.8 billion two-year spending and revenue plan on Monday and Tuesday of this week, respectively, and transmitted the bill to Governor Ned Lamont for his signature.
Through steadfast advocacy efforts, the Connecticut Hospital Association (CHA) successfully negotiated modifications to language in several provisions impacting hospitals and healthcare that were ultimately reflected in the adopted budget, including measures related to certificate of need (CON) applications, a maternity care report card, reproductive and gender-affirming care, a hospital financial assistance portal, emergency department data, EMTALA, and the States Advancing All-Payer Health Equity Approaches and Development (AHEAD) Model. The CHA-negotiated language builds in critical safeguards for hospitals and health systems.
Hospital Tax Changes
CHA also continued its urgent grassroots campaign to mobilize hospitals, patients, and advocates against harmful budget proposals, and further expanded on this effort in response to a new budget provision released on Monday, June 2, that imposes a $375 million tax increase on hospitals 2027 without improving hospital Medicaid reimbursement. The levy is significantly higher than the $140 million tax hike included in the governor’s proposed budget released in February. Budget proponents said the increase was intended to leverage the state hospital tax to bring in more return federal payments ahead of potential federal changes that would prevent hospital tax expansion in future years.
“The tax increase on hospitals and proposed cuts to healthcare providers contained in this budget will be devastating for hospitals, their workforce, and their patients,” CHA wrote in a statement. “It will leave hospitals facing a staggering cut of hundreds of millions of dollars, while the state uses federal dollars to balance its budget without any action to increase Medicaid reimbursement for care provided to patients in hospitals. These policies will move Connecticut backward in our collaborative efforts to make healthcare more affordable and accessible.”
Connecticut hospitals subsequently met with the governor and policymakers to advocate for assurances that the tax increase would be used to increase Medicaid reimbursement for hospital care and specifically raised concerns about the overall size of the $375 million increase, as it would surpass federal limits on how much hospitals can be reimbursed under Medicaid.
Though the provision was not removed from the budget, the governor, House Speaker Matt Ritter, and the governor’s administration committed to scaling back the provider tax increase and developing a system to distribute funds back to hospitals in the coming months. Legislators are expected to return for a special session this summer or fall, at which point CHA will work to ensure the tax is adjusted.
“We’re going to want to get to a fair deal for everybody, and if we have to come into special session to do that, we will do that, because the provider tax is very important to everybody… We’ll do right by [hospitals],” Ritter said.
“We are trying to reassure [hospitals] that we absolutely want to help everybody,” Lamont’s budget director, Office of Policy and Management (OPM) Secretary Jeffrey Beckham, said on Tuesday shortly after the governor had met with CHA representatives. “We want there to be net winners here.”
“We have assured [the Connecticut Hospital Association] that the hospitals will be treated equitably,” Chris Collibee, OPM, reiterated to the CT Mirror on Wednesday.
Budget Overview
The biennial budget includes maneuvers to avoid some of the restraints tied to the state’s fiscal guardrails and spending caps, including increasing the threshold for the volatility cap to free up more room for spending. Budget proponents have celebrated the budget’s inclusion of increased Educational Cost Sharing funding, a $300 million child care fund, increased special education funding, and a $250 child tax credit available to families eligible for the EITC (Earned Income Tax Credit) with at least one dependent, among other provisions supported by the spending increase.
View the Office of Legislative Research’s summary of the budget here.
Read the budget bill here.
