Face the Facts: How CT is preparing for federal funding cuts

Cuts being announced on a daily basis from Washington. $14.3 billion in federal funding is in question.

We all see them. Things like Medicaid, education, road repair, all could be impacted moving forward.

Connecticut is in better shape than many other states because of our rainy day fund and our projected budget surpluses for the next several years.

So will we even feel the impact? Comptroller Sean Scanlon explains some of the math for us.

Mike Hydeck: So arguably, we think, possibility, $800 million in federal funding could disappear from the health exchange here in Connecticut moving forward. If that does indeed happen, does Connecticut pick up the tab?

Sean Scanlon: I think it's too soon to know. And what we're trying to do every single day on the state level, from the governor to the constitutional officers, to the legislature, is to really understand exactly what's happening. We don't get a memo from Washington every time they cut the funding or freeze the funding, so many times, we're playing detective to try to figure out what exactly happened. What do the people who are supposed to get that funding know? Can we find answers for them? And is that a permanent cut, a temporary cut? We don't know. All these question marks are hanging over what we do. The good news is, as you said, Mike, we do, thanks to our fiscal discipline, thanks to the fact that we've turned around our state's finances, we are in a better position than other states, but there are limits to what we'll be able to do if, in fact, we lose billions of this funding.

Mike Hydeck: So if that cut goes through, when it comes to healthcare, how many people could lose their coverage, if nothing was done? If the cut was made and we didn't fill the gap as the state?

Sean Scanlon: Well, let's just talk about Medicaid. Medicaid is health insurance for one million vulnerable people in our state. These are kids. These are seniors in nursing homes. These are disabled individuals. These are our family members, our neighbors, our loved ones. We get $6 billion from the federal government on Medicaid, and right now, Congress is working through a bill known as the Budget Reconciliation Act that is asking the committee that oversees Medicaid to cut $880 billion over the course of 10 years.

Mike Hydeck: That's across the country.

Sean Scanlon: So this isn't partisanship. This isn't fake news. This is math, and what I do as the comptroller is math. There is no way for them to find that much savings without making systemic programmatic cuts to Medicaid. And if they do that, those one million people that we have on our plan are going to be impacted in a negative way, as will our hospitals, as will our primary care doctors, and the ripple effects will be felt for a very long time.

Mike Hydeck: So do you think the impact will be their premiums will go up? They'll lose coverage? What could happen if this does go through?

Sean Scanlon: People on Medicaid don't pay premiums, but they lose coverage. And these are, again, the most vulnerable people in our society. These are kids, seniors in nursing homes. Disabled people. It's a very tough set of people that will be impacted by this, and they're still going to get sick, because all of us get sick. So what our hospitals worry about, what our providers, our community health centers, worry about, is these people are still going to come to our places, but they're not going to be getting to use insurance anymore, because they won't have that insurance. And that means that, by law, they will have to treat them, but they won't get paid for it, and those costs will just get shifted onto all of us with private insurance, as they already are now, which is causing people to already be frustrated with the cost of private insurance. And so the ripple effects of this go beyond just finding waste, fraud and abuse. We all want to find waste, fraud and abuse. What we don't want to see is massive cuts to this important program to pay for a giant tax cut in Washington.

Mike Hydeck: So what does Connecticut do? Do we, like some lawmakers say, need to change at least one of the spending rules so we can make sure that we don't overpay for, you know, pension debt and we put it towards healthcare? Or do we dig into the $4.1 billion in the rainy day fund? How do we go about taking step one?

Sean Scanlon: We in the last 10 years have come such a long way, right? 10 years ago, we're in a fiscal crisis. Today, we've had seven consecutive years of balanced budgets, right? Paid off $8 billion of pension debt. We've got that $4 billion rainy day fund. We've made big progress. But in my mind, I began the year and the governor began the year focused on how to make Connecticut more affordable. We've gotten out of this crisis. Now we've got to make it more affordable. Our challenge now, and the challenge that they're doing right now in the legislature, is to find a balance between plowing ahead with what we want to do in Connecticut, which is make Connecticut more affordable and continue our progress, but also potentially have to backfill for federal cuts that we're seeing, and to deal with the recession that in likelihood is coming to the state of Connecticut because of what's happening with our fiscal policies in Washington and on Wall Street.

Mike Hydeck: Which means revenues would go down as well.

Sean Scanlon: Which means that, once again, we may need to use that rainy day fund to both deal with the dual threat of an economic slowdown and potentially less federal funding.

Mike Hydeck: OK, so another question. The governor unveiled a way for people, because we're seeing these rolling threats of cuts every single day. In different departments, whether it's education, whether it's healthcare, whether it's national parks. There's a way for people here in Connecticut to connect with the governor's administration and you about when they see these cuts and how they impact them. What just was unveiled this week?

Sean Scanlon: We need the help of the people to tell us what's going on. It's almost like that poster you see, if you see something, say something. If you are being impacted by a federal freeze or a federal cut, we're asking people to go to ct.gov/fedimpact and report that to us, so that we can actively, in real time, understand what the impacts are of these federal policy changes, and know what it is that we might need to do in terms of response, to step in, to help that nonprofit, to help that city or town that lost a grant, to help this program that is helping people in our state. We need to know what the impact is before we can figure out whether we have the ability to step in.

Mike Hydeck: And what the solution is. Alright, if you are going to be impacted, the website is, say it again?

Sean Scanlon: ct.gov/fedimpact