Senate bill to study a ‘Basic Health Plan’ sparks heated debate over Medicaid rates and hospital stability

Senate Bill 3, the legislature’s sweeping health-care affordability proposal, was advanced out of the Human Services Committee after an extended, sometimes pointed, debate over whether the state should prioritize immediate Medicaid reimbursement increases or study market reforms such as a Basic Health Plan and a Connecticut option.

Senator Lesser, the bill’s sponsor, told the committee the package is designed to respond to “major threats to the stability of our hospitals” caused in part by federal changes and the loss of enhanced premium tax credits. He said the bill starts a planning and study process that could expand coverage and create a health-care affordability trust capitalized in part by the state’s federal emergency-response fund. “This will make health insurance more affordable for the middle class in the state,” Senator Lesser said, urging members to adopt the measure.

Opponents warned the bill addresses symptoms rather than the immediate cause of hospital strain. “The biggest threat to hospital stability here in Connecticut is the fact that a third of our residents are on Medicaid, and our Medicaid reimbursement rates are among the lowest in the country,” Senator Perillo said, arguing that low Medicaid rates force hospitals to shift costs into higher commercial premiums. Representative Case pressed the committee to act on previously identified, concrete rate increases now, noting past rate studies and a $400 million figure cited for overdue rate adjustments.

Other lawmakers endorsed parts of the bill but urged stronger accountability and cross-committee review. Representative Meskers said increased state dollars should include measures to ensure private-sector reimbursement doesn’t simply capture higher rates without performance conditions. Several members questioned how a Basic Health Plan would interact with Covered Connecticut and Access Health, who would bear actuarial risk and how the 95% advanced premium tax-credit transfer would be administered; Senator Lesser said the plan would be administered by the state and contract with a risk-bearing entity and that key design choices would be worked out through the bill’s planning process.

Committee leaders also highlighted targeted hospital relief inside the bill, including language to direct disproportionate-share-like payments to hospitals and provisions to reduce balance billing for low-income patients. Supporters said those pieces could direct up to several hundred million dollars in federal funds to hospitals that treat high numbers of uninsured and underinsured patients.

After substantive questions and back-and-forth among members — and repeated assurances that any major statutory changes would require later votes and committee action — the committee put the bill forward to the floor; the clerk conducted a roll call and the chair said votes would be held open pending any additional members who later cast ballots.

What happens next: The bill now moves to the full chamber for consideration, with additional analysis and potential statutory changes to be hashed out in subsequent committee and floor action.