Connecticut expands Medicaid, expected to bring in $53 million

Connecticut has become the first state in the U.S. to take advantage of a provision in the new federal health reform law by adding nearly 45,000 low-income childless adults on Medicaid.

Prior to the federal health reform law states had to apply for temporary waivers to receive partial reimbursements for this population not otherwise eligible for Medicaid, but the state never applied.

This move gained Republican Gov. M. Jodi Rell‘s support because it will generate $53 million in new federal revenue for a population already being covered completely at the state’s expense.

“With this federal help, we will be able to provide increased medical benefits for them through Medicaid while relieving the burden on state taxpayers,” Rell said Monday when announcing the state’s application was accepted by the U.S. Department of Health and Human Services.

Moving people covered under State Administered General Assistance to Medicaid is expected to benefit struggling hospitals, who are paid less than half the cost of treating SAGA patients. This measure will increase those reimbursement rates to Medicaid rates.

“You will see over time hospitals will be more willing to care for this population,” said Sheldon Toubman, a lawyer for New Haven Legal Assistance, calling the coverage under SAGA “spotty at best.”

Kathleen Sebelius, HHS secretary, applauded Connecticut for being the fist state to apply. The District of Columbia is the only other jurisdiction to apply so far.

“Today’s action will bring substantial new federal support to the state and help improve the health of its citizens,” said Sebelius.