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Connecticut Hospitals, Angry at Gov. Malloy, Pave the Way for Lawsuit

George Ruiz
Creative Commons

Connecticut's hospitals are threatening to take the state to court over a hefty tax that amounts to hundreds of millions of dollars this year alone, and it's part of an ongoing  tension between the hospitals and Democratic Governor Dannel Malloy.

The battles lines are clear. Malloy says the hospitals are getting rich off taxpayers, making more money now thanks, in part, to the Affordable Care Act. As he sees it, hospitals can afford to give some money back.

“If you’re going to not raise people’s taxes, then you have to expect an industry that’s making a billion dollars a year in your community to trim its sails," Malloy said recently on WNPR's Where We Live.

But if the governor sees bloat, the hospitals see a politician who’s using them as easy targets. And they’re paying for political-style advertising to say that his cuts will have real impact.

“That means longer wait times, fewer cancer screenings, and nurses will be let go," said a man in one televised ad. "Tell Gov. Malloy to stop cutting our hospital care. Lives depend on it.”

At issue now is a tax implemented in 2012. The plan was that hospitals would pay around a few hundred million dollars a year to the state, and all – if not more – of that money would be returned to them as a mix of state and federal Medicaid money.

But that was then. Now, the state budget is out of balance, and Malloy wants to tax the hospitals even more -- and keep most of the money. That leaves people like Patrick Charmel in a bind. He’s the CEO at Griffin Hospital, an independent non-profit in Derby.

“So now...we’re talking over half a billion dollars, over $500 million," Charmel said. "So that’s what hospitals are paying in, and, essentially, we’re not getting any of that back.”

Charmel said that more cuts to funding will undoubtedly mean more cuts to services for those who need them most. And it’s a policy dispute that could turn legal.   

This week, the hospitals asked two state agencies to find the tax invalid -- a move they say could be followed by taking the tax itself to court.

Jeff Cohen started in newspapers in 2001 and joined Connecticut Public in 2010, where he worked as a reporter and fill-in host. In 2017, he was named news director. Then, in 2022, he became a senior enterprise reporter.

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