In 2012, Connecticut lawmakers passed a budget banking on $50 million in Medicaid savings from a plan limiting coverage for certain low-income young adults -- before the federal government approved a waiver for the plan.
In early March, the Centers for Medicare & Medicaid Services denied that waiver request, saying the plan's elimination of coverage for some 13,000 19-25-year-olds "is not consistent with the general statutory objective" of Medicaid.
With the state facing the second highest debt to GDP ratio in the country, at 7.9 percent, Connecticut lawmakers have been trying to find budget savings and at least slow the growth in spending -- efforts that, as elsewhere, have been controversial, particularly in healthcare.
"I hope that the administration has learned something from this experience, but unfortunately the governor's proposal to end Medicaid coverage for [some low-income residents] is still being aggressively pursued," Sheldon Toubman, a staff attorney at the New Haven Legal Assistance Association, told the Connecticut Mirror.
He was referring to Governor Dannel Malloy's most recent budget proposal, which calls for transitioning some 40,000 residents making over 133 percent of the federal poverty level into the state insurance exchange starting in 2014, with an estimated savings of about $66 million over two years.
Malloy's proposal would not require a federal waiver, but it is creating concerns among healthcare advocates like Toubman.
Currently the state's Medicaid program, called HuskyA, covers low-income adults with children earning up to 185 percent of the federal poverty level. Transitioning those currently on Medicaid into the HIX -- even with premium support -- would likely see them having higher cost-sharing than they do currently, and perhaps discouraging some people from getting insured, Toubman said.
"Although the exchange theoretically offers alternative coverage, the required cost-sharing under the exchange plans will as a practical matter render insurance out of reach for most of them," Toubman told the Mirror. Malloy's proposal, he said, could cause "a major increase in the number of uninsured low-income individuals in our state, at least among low-income parents."
Even as Malloy, a Democrat, faces criticism for reductions to human services programs -- he's also proposing a 16 percent reduction to the earned-income tax credit -- he's receiving about as much heat from Republicans displeased with the fact that his budget actually increases spending by 9 percent over the previous fiscal year.
Mirroring debates in other highly-indebted states, like Illinois, Connecticut Republicans are urging Malloy to consider restructuring another area of state healthcare spending -- public employee health plans and pensions, which Connecticut public workers contribute only about 2 percent of their income towards, one of the lowest contributions of state employees in the country.
"We could save hundreds of millions of dollars simply by bringing state employee pension contributions in line with the national average," state Senator John McKinney, the Republican minority leader, wrote in a Hartford Courant op-ed. "We could save even more money by bringing state employee pension and health care benefits more in line with those offered in the private sector."