What You Need to Know About Governor Malloy's Cuts to Hospitals and DKH

**UPDATE, 10/9/2015**
Governor Malloy has restored a small portion of hospital funding. However, it is not enough to relieve the need for DKH to continue with cuts to staff and operations. Read the facts below then scroll to the bottom of this page for the latest updates.

**ORIGINAL TEXT**

Once again, the health and livelihood of Northeast Connecticut are being threatened by state budget cuts to hospitals. After our community and our legislators successfully fought in our I AM New Day campaign last spring to avoid $12 million in cuts proposed by Governor Malloy, the Governor has made similar cuts to the budget approved and enacted by the legislature just three months ago. 

Here's what you need to know:

• On September 18, the Governor announced $63.4 million in cuts to Medicaid payments to hospitals, which eliminate 100% of the supplemental and small hospital payments that were due to hospitals for October 1, 2015 through the end of the state's fiscal year on June 30, 2016. Combined, these two cuts increase the tax burden on hospitals from $300.1 million to $492 million over the next nine-month period. 
  • For DKH this means a cut of at least $4.2 million over the next nine months. If the cuts remain and are extended through the end of the state's two-year budget in 2017, the total lost to DKH will be $11 million. That's more than three times greater than the cuts DKH received in the state’s 2014-15 budget, which has already caused our organization to have an operating loss, despite cutting $6 million in expenses.
  • If these cuts are allowed to stand, Northeast Connecticut will face the same dire threats to health and livelihood as in the Governor’s originally proposed budget.

Take Action Now > At a Glance Medicaid Hospital Expenditures & Enrollment: Federal vs. State Share Read the Press Release Day Kimball Healthcare Set to Lose Millions as a Result of Governor's Budget Cuts

• This funding had also qualified the state for a 200% match in federal Medicaid dollars. By eliminating the state funding, the federal funding is now lost as well. So the $63 million in state cuts mean an actual loss of $192 million in funding to CT hospitals for the nine-month period. It also means the state is leaving $373 million in federal dollars on the table each year. That’s money that could be used to help people in Connecticut, and it’s going to other states instead. It makes no sense when Connecticut has a revenue problem.
• This is on top of the hospital tax. Virtually every state has a hospital tax, but outside Connecticut it is used universally to increase Medicaid rates to hospitals as well as help balance the state budget. Connecticut uses the hospital tax to benefit exclusively the state budget, and actually adds to the cost burden on hospitals by imposing a real tax on them. 
• Governor Malloy has effectively raised the hospital tax by $100 million each year he has been in office. The Connecticut hospital tax burden exceeds the Connecticut corporate tax burden more than five-fold. 
• Connecticut started taxing hospitals in 2012 as a means to maximize federal Medicaid reimbursement. But the state quickly broke its commitment to maximize federal revenue and started moving to a direct taxation model. The state kept using more and more of the taxes collected from hospitals to balance the state budget. This most recent cut by the Governor means that $556 million per year – more than half a billion dollars each year – will not be used for healthcare.
• The consequences for all patients - not just those on Medicaid - will be longer hospital wait times, less access to care, and higher healthcare costs for everyone. 
• The Governor’s actions will severely strain the budgets of healthcare providers. Connecticut was already dead last in the nation for Medicaid reimbursement, and now providers are being paid less than half of what it costs to provide care. How are hospitals, particularly those with a high mix of Medicaid patients like DKH, expected to survive?
• These cuts will not only have disastrous effects on health care in our state, but on the economy as well. In most parts of the country, the healthcare sector is viewed as an economic engine that fosters job growth and fortifies the local economy. But here in Connecticut, since July, according to the state Department of Labor, Connecticut hospitals have lost 530 jobs. During the same time period, the federal Department of Labor reported that hospital employment increased nationally by 15,700 jobs, and is averaging an increase of 12,000 new jobs per month. Connecticut is heading in the wrong direction. 

This has to stop. Taxing the sick, hospitals, and healthcare is wrong. It increases cost, reduces access, hurts our state and local economies, and is inconsistent with the goals of healthcare reform. 

Please take just a few moments to stand up for the health and well-being of yourself, your family and your community - click here to tell legislators to stop the cuts now >