Reform bill may mean federal aid for state health-care program

Passage of national health care reform apparently has ended a long-running stalemate between the legislature and the Rell administration over seeking federal reimbursement for a state-funded health care program.

Three times over the last seven years, the legislature has directed the state Department of Social Services to apply for millions of dollars in federal matching funds for the state-funded State Administered General Assistance (SAGA) program, which provides health care to some 43,500 low-income individuals not eligible for the federal Medicaid and Medicare programs.

The failure of DSS to act had long frustrated legislators.

“Despite these clear legislative directives and the prospect of substantial savings to the state, DSS continues to delay submission,” wrote Appropriations Committee co-chair Sen. Toni N. Harp, D-New Haven, and Human Services co-chair Sen. Paul R. Doyle, D-Wethersfield, to Gov. M. Jodi Rell last month.

“Every day we wait it is costing us more and more money,” said Harp in a recent interview.

DSS has maintained that the agency can’t handle the paperwork required to have SAGA considered for federal reimbursement. In a Jan. 20 letter to the legislature’s Appropriations and Human Services committees, DSS Commissioner Michael P. Starkowski said the application would cost $100,000 and require “significant resources in the department.”

But the new federal health care reform law establishes a streamlined 90-day application process, and Rell budget director Robert L. Genuario said the process will now move ahead.

“It makes sense. The discussion has never been if we should do it. It’s been how do we do it,” Genuario said.

Harp agreed that DSS appears to be pursuing the application now.

“We want to move quick. It seems they do too, so we can start getting this money,” she said.

Senate Democrats estimate the reimbursements would result in $10.8 million in new revenue for the state this fiscal year and $38.5 million for the upcoming fiscal year beginning July 1.

But Rep. Craig A. Miner, the House ranking Republican on the Appropriations Committee, said he opposes opening the program to federal funding because it will require the state cover every eligible applicant. Right now, SAGA care has a limit of how much it can spend.

“Federal money is not always going to be there. What are we trading for a short-term gain?” he said. “This is in no way a guarantee of future revenue and we are talking about making it an entitlement program that we can no longer put a price limit on.”

But Harp said the legislature has repeatedly passed measures, beginning in 2003, saying it wants SAGA to be an entitlement program.

“We have said that’s what we want. We want to guarantee coverage to this population. The benefits outweigh the costs,” she said.

In addition to increased revenue for the state, obtaining federal reimbursement for SAGA expenses will help healthcare providers as well.

In order for the state to qualify for the federal money, the reimbursement rates for providers of SAGA care must substantially increase. For hospitals, which now are paid about 43 percent of the cost of providing care to SAGA clients, reimbursement will increase to about 70 percent, said Stephen Frayne, Connecticut Hospital Association’s senior vice president.

“We would still be losing money. We just wouldn’t be losing so much,” he said.