Funding for the state’s social “safety net” programs would be increased by nearly $345 million over spending levels proposed by Gov. M. Jodi Rell in the budget bill approved by the legislature’s Appropriations Committee Thursday, paid for by an anticipated influx of federal money and levying a new hospital tax.
The hike in the Department of Social Services budget angered both Republican leaders and the Connecticut Hospital Association.
“Common sense has just left the state legislature” said Sen. Dan Debicella of Shelton, the ranking Senate Republican on the committee.
“This is socialism. At the very same time they are saying they want to reduce health care costs, they are increasing the costs for hospitals. Who exactly do you think is going to end up paying for that?” said House Majority Leader Lawrence F. Cafero of Norwalk.
The proposed 5.5 percent hospital tax would be levied on the revenue at every hospital to raise an estimated $207 million next fiscal year. The plan is to then disperse that money to the most needy hospitals, making the state government eligible for $103.5 million more from added federal Medicaid reimbursements.
“The reality is, most [hospitals] I believe can handle this tax without increasing their rates,” Sen. Toni N. Harp, D-New Haven and co-chairman of the Appropriations Committee, said before the bill was approved 29-25.
But Stephen Frayne, CHA’s senior vice president for health policy, said the “already financially-stressed hospitals” cannot afford the tax. He said it will result in higher medical costs for patients. Hospitals in Connecticut lose almost $300 million a year in underfunded reimbursements for the state’s health insurance plans, he said.
Republican Gov. M. Jodi Rell also recommended a tax on hospitals, but at a 3.25 percent rate, in her deficit mitigation package earlier this year.
Robert L. Genuario, Rell’s budget director, said the difference between what was approved by the Appropriations Committee and what Rell is recommending is that Rell’s proposal would help close the deficit, not be used to increase spending.
“Any additional federal revenue should be used for closing our deficit. I cannot emphasize that enough,” he said.
The DSS budget approved by the committee restored funding that Rell had proposed to cut for more than a dozen programs, including for vision coverage, non-emergency transportation, interpreters, child daycare services, and the 2-1-1 phone lines for residents to apply for Husky coverage or get questions answered.
The committee also rejected Rell’s proposed co-pays for Medicaid and Husky B coverage that she expected to generate $11.1 million in new revenue. The committee also increased reimbursement rates for the state-run welfare programs for adults – SAGA – to match Medicaid funding levels. Rell estimates the SAGA increase will cost $91 million for the coming year if the federal government does not reimburse as the appropriations committee is expecting.
Genuario said it is unclear if SAGA programs will qualify for federal reimbursement under the new health care reform law.
“We think there may be a hole,” he said.
Another cause of increased spending is increased enrollment in entitlement programs, particularly Medicaid. Medicaid spending is expected to increase by almost $300 million more than originally budgeted. Appropriation Committee leaders said they expect to get 61 percent – or $183 million – of that back from the federal government.
Harp justified the increased spending for human services, saying, “We are looking for more revenue from the federal government and less cuts.”
One department that did see a cut in the Appropriations Committee budget is the Department of Children and Families, by about $13.5 million from Rell’s proposal.
Rep. John Geragosian, House co-chair of the committee, said the cuts in programs for child abuse intervention and safe and group homes for youth reflects reduced need and low enrollment numbers.