🔒Medicaid costs surged in 2024. It’s still CT’s cheapest insurance

Connecticut’s Medicaid spending per enrollee jumped 14% between 2023 and 2024, nearly doubling the per-person cost growth of health expenses in the state overall, according to an April 2026 report by the state Office of Health Strategy. Despite the increase, Medicaid, known as HUSKY in Connecticut, still managed to maintain the lowest costs per enrollee of any market — even when compared to commercial insurance. “Medicaid is still far and away the cheapest program, and it has way sicker people overall than commercial [insurance],” said Sheldon Toubman, an attorney with Disability Rights Connecticut. Retail pharmacy and long-term care services were the biggest drivers in the Medicaid cost increases, said Alexander Reger during a presentation of the results on Tuesday. Reger was, at the time of the presentation, healthcare benchmarks initiative director for the state Office of Health Strategy (OHS dissolved as of the close of business on June 25. Its staff and core operations have been transferred to other departments). In recent years, the Medicaid program has come under fire for cost overruns. But Sen. Matt Lesser, D-Middletown, said those criticisms are more around budgeting than about underlying costs. In fact, many Democratic lawmakers are calling for increases in investments to the Medicaid program, particularly in the wake of pending federal work requirements that could jeopardize coverage for more than 100,000 residents currently enrolled in the program. For years, physicians and legislators on both sides of the aisle have been sounding the alarm that the state doesn’t pay providers enough to treat patients with Medicaid coverage, thus decreasing access to care for those residents. Over the past two years, lawmakers have voted to pass a net increase of $50 million for Medicaid reimbursement rates in fiscal year 2027 compared to FY 2025. “Those changes to the rate structure are also going to increase costs. And they’re designed to. That’s literally what we’re setting out to do as a policy,” Lesser said. But while many lawmakers agree that increased investments in Medicaid are necessary, Lesser said there are areas, like pharmaceutical spending, where state officials are working to control program costs. The Department of Social Services was not able to comment in time for publication.

Cost growth benchmark

The findings comparing cost increases across markets are part of the state’s latest cost growth benchmark report, which OHS officials presented during a hearing earlier this week. The benchmark sets an annual target for increases in healthcare spending in an attempt to hold providers and insurers accountable to maintain affordability for residents. For 2024, state officials set the target for overall per-person spending growth at 4% . Medicaid and commercial insurance both exceeded the benchmark, while Medicare cost growth per enrollee remained below it at 3.7%. Every commercial insurer also exceeded the benchmark. “Healthcare has typically been a black box, and the benchmark program is one of Connecticut’s first real attempts to uncover that black box,” Reger said. A 2025 survey of more than 1,400 Connecticut adults found that nearly three-quarters of residents worried about affording healthcare in the future, and nearly two-thirds had delayed or gone without care in the last year because of costs. OHS officials were careful to explain that the benchmarking isn’t meant to imply that all healthcare spending growth is bad. For example, aggregate primary care spending statewide increased in 2024 by 9.8%. Many policymakers see such increases as a win because studies show routine care can prevent more expensive and complex diagnoses down the line. Toubman noted many advocates feel the same way about increased spending on home- and community-based services, which allow people who need long-term care to get it at home, which can be more cost-effective. But the report did identify areas ripe for savings. In 2024, OHS identified more than 500,000 ER visits — costing the system roughly $818 million — that could have been managed more cheaply in a primary care setting. “Even if a small fraction of those could be solved by opening more primary care clinics or opening more accessibility, then we have both provided better care and saved the states and its residents money,” Reger said.