Governor M. Jodi Rell today announced she has asked Connecticut ’s Congressional delegation to join her in pressing for an increase in federal Medicaid reimbursement rates to be included in the second national economic stimulus package Congress will consider in the coming days.

Social services represent the largest component of the $18.4 billion state budget, accounting for about 40 percent of expenditures. Services range from child care, food stamps and heating aid to nursing homes, home health care and services to the elderly. Connecticut ’s expenses are partially reimbursed by the federal government, but the state’s reimbursement rate is set at 50 percent – the lowest possible – so any increase would mean a substantial boost in state revenues.

Dear Connecticut Congressional Delegation:

I know that the campaign season has been long and difficult for all of you and I hope that you have had some time to rest and recover since Tuesday’s election.

Connecticut residents are looking forward to the prospect of new and creative solutions to the serious challenges confronting us. Foremost on their minds – and mine – is the national economy. I know you share my conviction that as Congress returns to work in the coming days there is much that needs immediate attention. High on that list should be passage of a second national economic stimulus package – one geared toward easing the grinding financial pressures on the states and helping put people back to work.

As you know, middle-income families in Connecticut and elsewhere are struggling as never before. They see their energy bills, their food bills and other expenses piling up, while the stock market remains in a slump and businesses large and small fight to keep their heads above water. Many of our largest employers have laid off workers. Even those that have not been forced to cut jobs are predicting lower spending and lower profits.

In Connecticut and all over the country, state governments are pinched between competing demands. Almost every state in the nation is required, either by law or by constitution, to have a balanced budget. Yet almost every state has seen revenues decline as jobs are lost, incomes dwindle and the economy contracts. And, of course, it is when the economy is deteriorating that the demand for state services is at its greatest.

That is why I am writing today to urge you to swiftly enact a comprehensive economic stimulus package for the states.

As you know, I recently wrote Congressional leaders on the same subject, a request that was echoed by Representative Courtney. I stressed that the package should not only include money for unemployment assistance and new infrastructure projects to help create jobs, but should also include money to relieve the pressure that skyrocketing Medicaid costs are placing on states.

I am asking that you pay particular attention to the issue of Medicaid reimbursements. An increase in reimbursements will serve two critical purposes: It will enable us to continue providing both direct services to citizens and indirect services through our network of private and non-profit providers, and it will relieve some of the burden as the General Assembly and I cope with the current budget deficit of more than $300 million.

Connecticut ’s federal medical assistance percentage (FMAP) is currently set at 50 percent, the lowest possible reimbursement rate set by the federal government. An increase to 55 percent would mean an additional $125 million in annual revenue to maintain our high-quality health care programs.

Medicaid represents Connecticut ’s most significant public investment in the health and well-being of our population. Our fiscal 2009 Medicaid budget exceeds $3.7 billion, or 21 percent of the entire state budget. This includes nearly $1.5 billion for citizens in long-term care, nearly $800 million for child and care-giver coverage and $334 million for community and home health care services.

Programs ranging from prenatal care and children’s health coverage to community-based home care for elders, coverage for the employed disabled and long-term care for our vulnerable seniors are all supported by federal Medicaid reimbursements. Many Connecticut residents rely on these programs and would be deeply affected if budget realities forced them to be scaled back or eliminated.

None of us want to see these programs become a victim of the very real budget pressures faced by Connecticut and countless other states – and that is yet another reason why an increase in Medicaid reimbursement rates is such a vital component of the stimulus package Congress will be considering.

Working together, we can soften the impact on our working families, our retirees, our senior citizens and the others across this nation who struggle to make ends meet. The mandate revealed in Tuesday’s election clearly sought nothing less. And the future of a great nation clearly demands nothing less.

Sincerely,


M. Jodi Rell
Governor