The state’s declining financial support to hospitals will translate to more than 4,000 lost jobs, $300 million in lost personal income, and a $145 million decline in state revenue by 2017, a new analysis by two UConn researchers argues.
When Connecticut implemented a hospital tax in 2012, Gov. Dannel P. Malloy’s administration and lawmakers pitched it as a way to leverage more federal revenue, which would help the general fund and more than make up for the financial loss to providers, Fred Carstensen, director of the Connecticut Center for Economic Analysis, and Peter Gunther, senior research fellow, wrote in a recently released pro bono study.
But that hasn’t happened. Instead, state support fell to $96 million this year, when it would have been $268 million under the state’s original commitment to hospitals, the analysis stated.
While the state’s budgeting method says that the declining spending on hospitals has bolstered the general fund by $100 million this year, the report argues that the general fund has actually taken a $136 million hit, when accounting for climbing health insurance rates and other factors.
“While it might appear that the changes in hospital tax/state transfer/federal reimbursements scheme is helping the state budget, this analysis argues it is making the situation in Connecticut worse, resulting in significant job losses, reductions in household incomes, and budget shortfalls,” the analysis said.
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