Connecticut: One-Fifth of Residents on Medicaid Leads to $1 Billion Deficit

Connecticut: One-Fifth of Residents on Medicaid Leads to $1 Billion Deficit

Despite a $1.5 billion tax hike on income, sales, corporations, and other areas in 2011, the state of Connecticut is projected to have a budget deficit that reaches $1 billion by the end of June 30, 2013.

Gov. Dannel Malloy (D), who prefers to call the projected deficit a “shortfall,” claims that increased Medicaid costs and declining revenues are the problem. The state’s enrollment of low-income adults on Medicaid has increased in two years from 45,000 to 83,000. The total number of people in Connecticut now on Medicaid is 671,550, or approximately one-fifth of the state’s total population.

Gov. Malloy took office in 2010. However, his predecessor, Republican Gov. M. Jodi Rell, made Connecticut the first state to expand Medicaid under ObamaCare, asserting that the federal assistance would provide increased medical benefits for low-income individuals while relieving the burden on the state’s taxpayers.

During a recent committee meeting, Republican lawmakers in the state asked whether people are moving into Connecticut to take advantage of the state’s Medicaid programs. Roderick Bremby, the state’s commissioner of Department of Social Services, said that, over the past five years, food stamp usage has increased 80% and Medicaid services 30%. However, besides the economic downturn, he could not determine specific causes for the increase in low-income adults on Medicaid.

In 2011, Republicans urged the state to hire more Medicaid fraud investigators, arguing that the positions would be reimbursed 75% by the federal government. Democrat lawmakers never included that suggestion in budget adjustments.

State Sen. Toni Harp (D) told committee members, “Nobody wants to see it [Medicaid] go up like a quarter of a billion dollars. Nobody does, but the reality is there are people out here that need services that are now getting them. I’m not one to say this is a bad thing to occur.”

Blaming revenue shortfalls on national economic factors, Gov. Malloy denied that the status of his state’s finances have anything to do with poor policy-making by his administration. He asserted that his state’s government is “smaller, leaner, and more cost effective than it’s been… in recent times.”

Malloy stated that he will be reviewing areas for spending cuts to close the budget gap but will protect education spending and social services. As a result of the concession deal he made with public sector unions in 2011, Malloy cannot lay off employees to cut spending.

“I have no intention of raising taxes,” Malloy said, but then clarified that statement by saying that he could not rule out tax increases until he has a better view of the economic climate.