US House Budget Proposal Threatens Connecticut Medicaid and ACA Coverage

Connecticut faces a potential increase in uninsured residents if the US House budget proposal, known as the One Big Beautiful Bill Act, passes into law. Experts estimate that 140,000 more individuals in the state could lose health coverage, adding to the current 195,000 uninsured, which would mark the highest level in two decades.

The bill proposes significant cuts to Medicaid, which currently covers about one million Connecticut residents. It reduces funding to the state including for coverage of immigrant children, despite Connecticut solely using state funds for their care. The legislation also introduces work requirements for approximately 340,000 low-income residents covered under the Affordable Care Act (ACA) expansion and imposes charges of up to $35 per medical service for some patients.

Healthcare coverage has been shown to save lives and reduce costs. The proposed cuts may strain hospitals and providers, increasing uncompensated care costs, which reached $250 million in 2023 in Connecticut. This could lead to higher healthcare prices for insured patients, negatively impacting wages, employment, and tax revenues.

Uninsured individuals face increased debt and financial instability, affecting their ability to afford housing, education, and basic needs. This also places additional pressure on state and local budgets, potentially diverting funds from other priorities like education and public safety.

Healthcare costs in Connecticut are rising faster than incomes, with insurance premiums increasing at a higher rate than wage growth since 2008. Employer-sponsored coverage has been declining, and many residents report delaying or skipping care due to cost. A significant portion of insured individuals struggle with medical bills, leading to debt and cutbacks on necessities.

The bill's Medicaid work requirement targets able-bodied adults but overlooks barriers such as disability, education, caregiving duties, childcare, and transportation. Administrative challenges in verifying compliance risks coverage losses for many who are already working. Past implementations in Arkansas and Georgia resulted in coverage losses without employment gains and increased administrative expenses.

Exemptions to the work requirements are complex and difficult to verify, potentially causing administrative burdens for both Medicaid recipients and state agencies. The policy may lead to involuntary disenrollment from Medicaid rather than promoting employment.

Connecticut has proactively expanded coverage options under the ACA, including Medicaid expansion for adults, the creation of Covered CT for those above Medicaid income levels, and coverage for low-income undocumented immigrant children. However, enhanced subsidies that improved affordability during the COVID-19 pandemic are set to expire without Congressional extension.

The House bill passed narrowly and faces anticipated changes in the Senate. Connecticut's Congressional delegation unanimously opposed the measure, citing concerns over its impact on the needy, state workers, taxes, and public health risks.

Healthcare analyst Ellen Andrews, Ph.D., emphasizes the challenges posed by the bill and underscores Connecticut's leadership in expanding healthcare coverage. She notes that rising healthcare costs and proposed policy changes threaten affordability and accessibility in the state. Ongoing policy debates highlight the need for sustainable solutions that balance coverage, costs, and administrative feasibility.