CT21, CERC: State Should ‘Go Long-Term’ on Fiscal Reforms

As a reluctant economy continues to squeeze Connecticut between declining state revenues and a greater need for public services, the state needs to address all three issues.
Connecticut’s economy has been held back by the uncertainty over state finances and the budget’s long-term sustainability.
This week, CT21 and the Connecticut Economic Resource Center presented new findings on one of the biggest areas of state spending—how to reform long-term healthcare in Connecticut to save taxpayer dollars and deliver more desirable care.
Biggest line item
Medicaid, the biggest single line item in the state budget, accounts for almost 14% of state spending, or nearly $2.5 billion, in FY 2016.
Rebalancing the long-term care system away from expensive institutional care to more cost-effective (and desirable) home and community-based services (HCBS) could help avoid dramatic Medicaid cost increases.
Rebalancing would also help ensure that older residents—and those of any age with disabilities—get the help they need.
Connecticut has already made strides toward achieving its goal of a 75/25 HCBS vs. institutional care split, but this shift needs to speed up if the state is going to keep pace with the needs of a rapidly aging population. (The ratio is currently 60/40.)
According to one estimate, Connecticut will see a net increase of 70,000 clients accessing long-term support services by 2025.
According to the report, which was produced by CERC for CT21, shifting the HCBS/institutional care balance to 75/25 could save the state $657 million in 2025 compared to costs at the current 60/40 ratio.

Another study, by Health Management Associates for AARP, found that “for the cost of serving just one person in a nursing facility, the state could serve nearly three eligible individuals in the community.”
This report explained that the average monthly cost of institutional care per Medicaid client was about $5,800, while care for someone participating in the Connecticut Home Care Program for Elders was, on average, just $1,985.
Sustainable
Connecticut’s business community has long promoted sustainable reforms like these to solve the state’s persistent fiscal troubles and make businesses more confident about expanding and growing jobs here.
The state simply has to find ways to change the way it operates and deliver quality services more efficiently and less expensively.
CBIA will continue to work with CT21 and other interested groups this legislative session to accelerate the pace of long-term support services rebalancing to provide appropriate, more desirable care at a lower cost to state taxpayers.
CBIA and its member companies have made it clear for years that if the state is going to reach its enormous economic potential, state government must prove it can manage its finances in a sustainable way.
Doing so will give businesses the confidence to remain in Connecticut and expand and grow jobs.
And more investment and well-paying jobs will generate the revenue necessary to underwrite core state services, such as education and transportation, that families rely on.
For more information, contact CBIA’s Louise DiCocco (203.589.6515) | @LouiseDiCocco