Governor Malloy proposes changes to healthcare in his budget proposal
Deep cuts to hospitals and changes in Medicaid eligibility are among the reductions Gov. Dannel P. Malloy is proposing in his new two-year budget, set to be presented on Wednesday.
A budget document obtained Tuesday by The Associated Press shows the Democratic governor’s plan cuts $1.8 billion in spending from the current services budget, which is the amount of spending required by law.
Malloy, who is scheduled to address a joint session of the General Assembly at noon, has been criticized by legislative Republicans for spending initiatives he has recently unveiled, especially those relying on borrowing. He’s also likely to receive criticism for increasing spending in the general fund, the state’s main account, by roughly 5 percent in the first year and 3.7 percent in the second.
Under Malloy’s proposal, the general fund would be about $20 billion in the first year and $20.8 billion in the second, according to the budget document.
Malloy’s budget director, Benjamin Barnes, said much of the spending increase stems from state employee retirement health care and pension costs, expanding Medicaid eligibility under the federal health care reform law and other higher Medicaid costs. To help offset costs, besides the spending cuts, Malloy’s budget extends various taxes and tax credits set to expire.
Chief of Staff Mark Ojakian defended the package, which he called a framework for discussions with lawmakers over the coming weeks.
‘‘We’re producing a balanced budget while increasing spending by a very marginal amount to reflect the governor’s priorities but also cutting programs and no new taxes,’’ Ojakian said.
The General Assembly, which is controlled by Democrats, has until June 5 to reach an agreement with the governor.
The largest reduction is made in the Department of Social Services account, the largest in the budget. Barnes said many of the spending reductions included in a recent deficit-cutting plan, including reductions in the funding hospitals use to help cover the cost of caring for uninsured patients, are extended into the new budget proposal. He said the payments to hospitals are cut in half in the first year and are phased out in fiscal year 2015.
He said the program is phased out in 2016 under the federal health care reform law because those patients will theoretically be insured.
The health care reform law also prompted the Malloy administration to propose that about 40,000 higher-income Medicaid recipients, such as some parents of children on the HUSKY health insurance program, transition into the new health care exchange and sign up for private coverage with a subsidy. Additionally, Barnes said the budget cuts tens of millions of dollars from small social service programs.
Malloy has already released various details of his budget. On Tuesday, he announced that his plan dedicates an additional $152 million over two years to the Education Cost Sharing grant, the state’s major grant program for local education affecting 117 cities and towns.
Malloy said much of the additional money will target some of the state’s most troubled schools.
A state education task force recently recommended increasing state spending on ECS.
Malloy also has proposed a $1.5 billion, 10-year plan to boost science, technology and engineering at the University of Connecticut and a $200 million, 10-year fund to help attract more bioscience companies and jobs to the state. Borrowed money, or bonding, will be used to help pay for both initiatives.
House Minority Leader Lawrence Cafero Jr., a Norwalk Republican, said he was dismayed by Malloy’s plan to spend so much on UConn during difficult economic times.
‘‘My first reaction is, ‘Say it ain’t so, governor. Say it ain’t so,'’’ Cafero said last week.