Olha Yarynich, Contributing Photographer

Last Tuesday, Connecticut lawmakers announced a plan to increase Medicaid reimbursement rates.

In a press conference at the State Capitol, legislative leaders, including State House Speaker Matt Ritter, State Senate President Martin Looney and Human Services Committee Co-Chairs Senator Matt Lesser and Rep. Jillian Gilchrist, introduced a multi-year initiative to increase Medicaid reimbursement rates. They argue the plan will incentivize more healthcare providers to accept Medicaid patients and increase care access for low-income patients. 

The announcement came amidst President Donald Trump’s efforts to cut funding for programs that do not align with his priorities, and hours after the White House ordered the freezing of all federal grants and loans, which was later blocked in court and withdrawn. 

“On a day of some chaos nationally, it is a reassurance that we have Connecticut leaders who are out here defending the rule of law, making sure that we are investing in people … in our communities … and in access to healthcare,” Lesser said.

The proposed Medicaid rate adjustments will be implemented over three years and total $250 million in investments. Ritter highlighted the historical reliance on Medicaid funding to stabilize hospitals and expand services, framing the initiative as a necessary step toward ensuring provider participation in the program.

According to Looney, the stagnant Medicaid reimbursement rates have contributed to a shortage of providers accepting Medicaid patients. He pointed to children’s mental health services as an area where underfunding has led to access issues, noting that for many families, in-school counseling is the only service available due to a lack of community providers.

Legislators stressed that the plan to increase Medicaid rates is about more than just stabilizing the system — it is about equity and access. 

State Senate Majority Leader Bob Duff linked the issue to Connecticut’s economic future, arguing that low reimbursement rates contribute to shortages of in-home care workers.

Legislators emphasized that low Medicaid reimbursement rates have made it difficult for healthcare providers to recruit and retain staff, as wages in neighboring states are significantly higher.

The proposed rate adjustments would address disparities in provider compensation, ensuring that specialists who have been reluctant to take Medicaid patients due to financial constraints could reconsider their participation. Legislators highlighted that for certain specialties, such as dental care and allergists, Medicaid patients currently have few, if any, options in the state.

Legislative leaders have acknowledged the potential need for adjustments should federal funding changes occur. 

“We have to be ready for any outcome,” Looney said, warning that significant federal budget cuts would create a major challenge for the state, making it difficult not only to maintain existing programs but also to expand critical services like Medicaid. “We’re not just trying to sustain the status quo—we need to move forward,” he added.

Dr. Howard Forman, a professor of healthcare economics at Yale, emphasized that while higher reimbursement rates could improve healthcare access, policymakers must balance costs with sustainability.

Still, according to Forman, facilities predominantly serving Medicaid patients may struggle to maintain operations if reimbursements do not cover costs.

Additionally, Forman highlighted the challenges posed by hospital bankruptcies, such as the recent Prospect Medical Holdings bankruptcy, which has placed financial strain on hospitals that heavily rely on Medicaid and Medicare reimbursements. 

As Connecticut lawmakers push forward with their Medicaid rate increase plan, they face financial and policy uncertainties. While the initiative has drawn broad support from state leaders, healthcare professionals and advocacy groups, its success will depend on navigating federal funding challenges and ensuring long-term sustainability.

Dr. Stacy Taylor, immediate past president of the Connecticut State Medical Society, emphasized that the proposal is about more than just economics — it is about ensuring that residents receive the care they need.

“It is an investment in the health and well-being of Connecticut’s residents,” Taylor said. “The true beneficiaries today are the patients who will gain improved access to care that they need and they deserve.”

State officials say Connecticut will not wait for Washington to act when healthcare access is on the line.

As of November 2022, Medicaid and CHIP covered more than 91.7 million patients nationwide.

JANICE HUR
Janice Hur covers the Yale New Haven Hospital for the SciTech desk. From Seoul, Korea, she is a sophomore in Morse majoring in Biomedical Engineering.