Hospitals and social services took the brunt of cuts in a bipartisan bill approved by state lawmakers aimed at erasing the state budget deficit.
General Assembly members approved roughly $218 million in spending reductions, with $126 million cut from the Department of Social Services, which houses the state’s Medicaid program.
In addition to Gov. Dannel P. Malloy’s $170 million in spending cuts, legislators approved the mitigation bill Dec. 19 to close the projected 2013 fiscal year budget gap of at least $365 million.
A total of $103 million was cut from hospital funding, which the Connecticut Hospital Association (CHA) greatly opposed.
“Hospitals will continue to provide excellent care to patients regardless of their ability to pay,” said Michele Sharp, CHA spokeswoman. “However, these figures cut into the bottom line, impacting the ability for hospitals to sustain programs and services, make updates to infrastructure and technology, and maintain optimal levels of staffing.”
In response, Gian-Carl Casa, undersecretary for Legislative Affairs under the Office of Policy and Management (OPM), said the cuts were made where there would be the least impact on services. He also said hospitals are receiving significantly more funding under the state’s revised Medicaid and Low-Income Adults program than they were a few years ago under the State Administered General Assistance program.
“Nobody’s going to be happy about being cut,” Casa said. “But they were necessary to ensure that the state budget remains balanced this fiscal year.”
The total amount of spending reductions approved to date is $388 million, right between the OPM deficit projection of $365 million and the Office of State Comptroller’s estimate of $415 million. Additionally, the mitigation plan includes $23 million in revenue adjustments due to increased expectations and account transfers.
Projections for the 2014-2015 biennium budget deficit are estimated to be at least $1.2 billion, which legislators are expected to address further in January.
Officials say the projected gaps are due to increased demand for Medicaid services for low-income residents, which is a result of the state’s high long-term unemployment levels and on recent expansions to the state’s Medicaid program to include low-income adults.
Among the bigger cuts approved by state officials are $25 million from the state treasurer debt service, $28 million from state employee health benefits and roughly $44 million from the Department of Education, University of Connecticut and Higher Education Board of Regents. In total, $158 million was cut from the Department of Social Services, primarily targeting the Medicaid program.
Officials cut about $54 million from funds set aside to pay for uninsured patients who can’t afford to pay for health care and about $34 million from funds to help reimburse providers for services they provide for Medicaid patients.
On Dec. 20, CHA issued a release stating the cuts would eliminate critical hospital programs for the uninsured, low-income, homeless and elderly, among other groups. Additionally, representatives said hundreds of hospital jobs are now on the chopping block.
“We know there are better alternatives,” Sharp said. “We propose moving eligible individuals from Medicaid to the state’s health insurance exchange. That is a win for everyone: better access to providers for patients, lower costs for the state, and better reimbursement rates for providers.”
“Again, they were very difficult decisions — but many more are going to be necessary as we discuss a budget for the next biennium,” Casa said. “The governor has been clear that we will live within our means and he has no intention of raising taxes.”