SB 3, An Act Concerning Health Care Affordability

TESTIMONY OF THE CONNECTICUT HOSPITAL ASSOCIATION
SUBMITTED TO THE HUMAN SERVICES COMMITTEE

Tuesday, March 17, 2026

The Connecticut Hospital Association (CHA) appreciates this opportunity to submit testimony concerning SB 3, An Act Concerning Health Care Affordability.  CHA opposes the provisions related to the “Connecticut Option” and a basic health program, has concerns regarding the proposed voluntary hospital financial assistance program tied to disproportionate share hospital (DSH) payments, and supports the sections directing the Department of Social Services (DSS) and other state agencies to collect preliminary data regarding individuals eligible for coverage or exemptions under H.R. 1, as well as the provisions establishing tighter timeframes for prior authorization review. 

Connecticut hospitals make our state stronger by delivering nationally recognized, world-class care, supporting jobs and economic growth, and serving communities across Connecticut.  Every day, hospitals improve access, affordability, and health equity — providing care to all patients regardless of ability to pay.  At the same time, hospitals invest in their workforce and local communities, even as they navigate significant financial and federal challenges.

The “Connecticut Option”

CHA opposes Sections 4 through 8 of SB 3, which propose the establishment of a “Connecticut Option” under the Office of Policy and Management (OPM) and directs the development of a basic health program.  The bill proposes creating a “Connecticut Option” using a combination of funding from a newly established Connecticut Affordable Health Care Trust, along with other state, federal, and external funding sources.  It also directs DSS, in consultation with OPM, to establish a basic health program.  The bill also indicates that the “Connecticut Option” could structurally operate via a “buy-in option for a plan that mirrors Medicaid,” and that an established workgroup may consider options to “promote cost containment and network adequacy.”

We are opposed to the proposed intent to design and implement these programs without addressing the underlying issue of chronic Medicaid underpayment and instead adding another layer of complexity to an already strained system.  We also object to the viability of any program that hinges on contracting care to one limited network and thereby limiting patient choice.  We believe Connecticut should focus on strengthening what already works within the healthcare system rather than creating new government-run plans that may jeopardize access and affordability.  Hospitals across the state are already facing significant financial pressures driven by workforce shortages, rising costs, and persistent underpayment from existing government programs.  Introducing a new public option built on top of the current Medicaid program without addressing these underlying challenges, risks destabilizing the healthcare delivery system.  We note that our comments on the proposal for a basic health plan in SB 3 are also included in our testimony on HB 5559, An Act Concerning A Basic Health Program.

Spousal Responsibility for Medical Debt

CHA opposes Section 9 of SB 3, which proposes to modify Connecticut law so that a surviving spouse is not responsible for medical debt incurred for reasonable and necessary services provided by a physician, dentist, or hospital to a deceased spouse.  The bill would eliminate the responsibility of the surviving spouse to pay for medical expenses incurred by a deceased spouse, creating an exception to the underlying statute which treats the payment for such things as medical care and housing as a joint spousal obligation.

We understand that the death of a spouse has an enormous impact on the surviving spouse and family and can create a new financial outlook for a family.  No one should avoid or delay seeking medical care because of a concern of inability to pay, and medical debt should never limit an individual’s economic opportunity.  In this regard, however, we emphasize that Connecticut hospitals have well established systems for screening patients for financial assistance and patients may reapply if their circumstances change.

CHA stands ready to collaborate with the committee to ensure that any legislative changes to medical debt policy are practical, fair, and effectively support Connecticut families.  We would welcome further discussions on how financial assistance programs can continue to meet the changing needs of patients and their families.

Hospital Financial Assistance Program

Sections 10 and 11 of SB 3 establish a voluntary hospital financial assistance program that would create new requirements for hospital financial assistance policies for hospitals that choose to participate.  CHA appreciates the committee’s continued focus on helping patients manage the cost of care, but we have concerns with the financial assistance provisions in Sections 10 and 11 because similar policies have been proposed and discussed in recent years and raise significant operational and financial concerns for hospitals.  Connecticut hospitals already provide extensive financial assistance and free care programs for low-income patients, including individuals who fall within the income ranges associated with programs such as the Supplemental Nutrition Assistance Program (SNAP) and the Women, Infants, and Children (WIC) Nutrition Program.

The proposal to automatically extend financial assistance eligibility based on participation in these programs is therefore largely duplicative of existing hospital policies and may create administrative complexity without meaningfully improving access to assistance.  In addition, the bill would prohibit hospitals from considering patient assets when determining eligibility for financial assistance and would limit hospital collections to no more than two percent of a patient’s annual household income.

Together, these provisions represent a significant departure from existing financial assistance frameworks and effectively shift the cost of inadequate insurance coverage and patient cost-sharing obligations onto hospitals.  Hospitals remain committed to working with patients to resolve medical bills and connect eligible individuals with coverage programs, but policies that impose rigid statutory collection limits or restrict reasonable eligibility criteria could undermine hospitals’ ability to sustain these programs while continuing to provide care to all patients regardless of their ability to pay.

In addition, although we greatly appreciate the interest in addressing additional uncompensated care costs that might result from federal policy changes, we have concerns about conditioning DSH payments on adoption of these financial assistance policies.  Under federal Medicaid DSH rules, each hospital is subject to a hospital-specific DSH limit, and the availability of DSH must be evaluated together with other Medicaid reimbursement, including supplemental payments, when determining whether additional DSH capacity exists.  As a result, DSH may not be available, or available in the same amount, for all hospitals that adopt these proposed financial assistance policies.  This creates a risk that DSH would be an uneven and potentially inequitable mechanism for supporting new uncompensated care costs.  We instead propose that the state consider establishing a dedicated and stable funding pool for hospital uncompensated care payments that is not contingent upon participation in a voluntary financial assistance program.  We note that our concerns with this section are also noted in CHA’s testimony on SB 496, An Act Concerning Hospital Uncompensated Care as well.

Medicaid Community Engagement and Work Requirements

CHA supports Sections 12–15 of SB 3, which would establish a formal process for the state to monitor, report on, and disseminate information to beneficiaries regarding eligibility for, and exemptions from, Medicaid community engagement and work requirements as well as SNAP requirements under federal law.  We believe the development of these data will be helpful for both the state and hospitals to gain a better understanding of the scope of impacted individuals and to design strategies to prevent unnecessary coverage loss where possible.  CHA supports the Lamont administration’s efforts to prioritize access to clear and timely information about coverage eligibility and exemptions.  Ensuring that eligible individuals maintain coverage will be particularly important as hospitals continue to face chronic financial pressures and anticipate additional increases in underinsurance and uncompensated care resulting from federal policy changes under H.R. 1, the One Big Beautiful Bill Act (OBBBA).

Medical Frailty Definition

CHA supports Section 16 of SB 3, which notes the efforts of DSS to develop a medical frailty definition in advance of forthcoming federal guidance.  We encourage the state to adopt an appropriately expansive definition for purposes of determining exemptions from Medicaid and SNAP work and community engagement requirements.

Legislative Approval for Connecticut’s Medicaid Payment Model

CHA supports Section 17 of SB 3, which would require DSS to obtain approval from the Human Services and Appropriations Committees before changing the Medicaid payment model from fee-for-service to managed care or seeking related federal approval.  The section also establishes meaningful procedural safeguards, including advance public notice, an opportunity for written comment, a public hearing, and legislative review of the fiscal, patient care, and provider reimbursement impacts of any such proposal.  CHA supports this strong oversight framework and appreciates the bill’s recognition that any proposal to fundamentally restructure Medicaid financing warrants careful scrutiny, transparency, and robust legislative review given its potentially significant consequences for patients, providers, and the state.

Prior Authorization and Utilization Review

CHA strongly supports Section 18 of SB 3, which would make several meaningful improvements to prior authorization and utilization review by shortening the timeframe for nonurgent prospective and concurrent review determinations from seven calendar days to two business days, requiring health carriers to identify missing information within twenty-four hours, requiring a decision within twenty-four hours after that information is received, and deeming a request approved if the carrier fails to act within the required deadlines.  These reforms respond directly to longstanding concerns CHA has raised about the inappropriate use of utilization management, particularly prior authorization, to delay or restrict access to medically necessary care.  

As we have noted in previous testimony, prior authorization has become one of the most common barriers to timely care, plans frequently change the rules governing prior authorization during provider-insurer contract periods, and these processes impose enormous administrative burdens on hospitals and frontline clinicians while delaying patient access to needed services.  We have long supported legislation that requires more definitive timeframes, improves transparency and timeliness, and provides for automatic authorization when a health carrier or utilization review entity fails to meet required review deadlines.  Section 18 advances these goals exactly. By creating clear response deadlines and meaningful consequences for noncompliance, it helps put healthcare decisions back in the hands of patients and providers, reduces avoidable delays in treatment, and promotes more efficient and predictable reimbursement for hospitals and other providers.  CHA appreciates the legislature’s continued attention to prior authorization reform and supports Section 18 as an important step toward a fairer, more transparent, and more accountable utilization review process.

Thank you for your consideration of our position.  For additional information, contact CHA Government Relations at (203) 294-7301.