WEEKLY UPDATE: 09/04/25
Connecticut hospitals and health systems continue to engage state officials and lawmakers on potential strategies to mitigate the impacts of H.R. 1, the One Big Beautiful Bill Act (OBBBA), on health insurance enrollment, patient access to care in their communities, and overall healthcare affordability.
Health Insurance Coverage
An estimated 100,000-200,000 Connecticut patients are expected to lose health insurance coverage due to Medicaid eligibility changes over the next few years, according to the Office of the State Comptroller. New work requirements, more frequent redeterminations, and reductions in retrospective coverage will affect the Medicaid expansion population (HUSKY D), accounting for approximately 315,000 of Connecticut’s nearly 950,000 Medicaid beneficiaries. CHA has approached the Connecticut Department of Social Services (DSS) to explore opportunities to limit the impact of these new requirements on Medicaid enrollment.
Access Health CT, Connecticut’s official health insurance marketplace, projects another 30-35% of its 150,000 insured will lose coverage by 2034 if Congress allows enhanced premium tax credit subsidies to expire at the end of the year. If marketplace plan costs increase dramatically in 2026, enrollees will struggle to afford — and may therefore decide to forgo — coverage.
On Tuesday, September 2, at an informational hearing held by the legislature’s Human Services Committee, Mark Schaefer, vice president of system innovation and financing at CHA, explained how the anticipated substantial decline in health insurance coverage will have a ripple effect on the entire care continuum.
“When people lose healthcare coverage or access, they often avoid or delay seeking care. They may not get timely care for a condition or get their prescription medications filled, and this can make manageable health problems like high blood pressure or diabetes or infections become much more serious over time,” Schaefer said. “Without coverage, people are more likely to wait until their conditions become emergencies, and then they turn to hospital emergency departments. The emergency department is often the only place they can receive care, regardless of ability to pay. But by that point, their illness is more advanced, which means more intensive and more expensive treatment.”
As a consequence, Schaefer said, uncompensated care costs will surge, further straining financially stressed hospitals facing chronic Medicaid underpayment and rising operating expenses.
On Thursday, September 4, CHA also participated in a forum hosted by the Commission on Racial Equity in Public Health and Health Equity Solutions. The forum further explored the impact of H.R. 1, including the impact of federal cuts on Medicaid, Connecticut’s health insurance exchange, and access to coverage and care.
“Cutting insurance access hurts patients, hurts hospitals, and ultimately hurts the whole community,” Schaefer said in a pre-recorded, informational video created by the commission and featured at the forum.
Hospital Provider Tax
Connecticut hospitals are continuing to assess the federal law’s impact on the hospital provider tax. H.R. 1 seeks to freeze and gradually reduce the use of provider taxes to fund the non-federal share of Medicaid spending. The law decreases the “safe harbor limit” from 6% to 3.5% by 2031, with a phased-in reduction beginning in 2028. It is unclear whether the Centers for Medicare and Medicaid Services (CMS) will continue to grant waivers that allow states to tax hospitals exceeding the safe harbor limit. Connecticut has historically received a federal waiver to tax outpatient revenues at an amount higher than the “safe harbor” rate of 6%, while imposing the maximum 6% for inpatient revenues. Additionally, CMS’s interpretation of the law will determine whether the $375 million hospital tax increase recently adopted in the biennial state budget will be impacted by the provisions of H.R. 1 when Connecticut’s hospital tax settlement expires.
“It’s a big question mark,” Paul Kidwell, senior vice president of policy, CHA, told CT Mirror. “We’re proceeding as if we can continue, with the knowledge that we need more information from CMS in order to be certain.”
CHA is analyzing how the provider tax provisions of H.R. 1 interact with the tax increase adopted in the biennial state budget and the impact on advocacy efforts to maximize the use of the tax to address Medicaid underpayment.
