HARTFORD — With the legislature planning to restore funding for a popular Medicare program, Gov. DannelP. Malloy reiterated his push last week for lawmakers to also come up with broader deficit plan.
He repeated his warning that restoring funds to the Medicare Savings Program without also addressing a $222.5-million deficit would worsen the shortfall, which already has reached the threshold that requires Malloy to submit a mitigation plan to the legislature.
“If the legislature is convening a special session, they should take this opportunity to address the full deficit facing the state,” he said in a statement Thursday. “Having said that, if their intention is to limit their action to only restoring eligibility for the Medicare Savings Plan, it’s imperative that the additional expenditure is offset with real and achievable spending cuts.”
Malloy also had his budget chief, Benjamin Barnes, draft a memo stressing the difficulty of trying to find the savings needed for the program within the current budget. The budget, adopted in October, reduced the number of residents eligible for the Medicare program and cut $54 million in the current budget, followed by $130 million next year.
“While it is clear why the cuts to MSP have been targeted for restoration, it is not clear that there are realistic alternatives that are not as bad or worse,” Barnes wrote.
Malloy’s warning drew criticism from Senate Republican Leader Len Fasano, R-North Haven, who called the memo “ a lot of words from someone who is desperately trying to be relevant.”
“Frankly, the last person I would take suggestions from at this point is GovernorMalloy and his administration,” he continued. “They have failed to keep businesses here, failed to protect our economy, failed our state’s transportation needs and failed to create any kind of stability for Connecticut. The governor and his administration need to sit back and let lawmakers do the driving.”
The Medicare Savings Program utilizes Medicaid funding to help cover some out-of-pocket costs incurred by residents on Medicare. If the cuts are not restored, some residents will become ineligible because the budget closed the program to those whose incomes exceed the federal poverty level.
Barnes said in his memo that balancing those cuts with savings elsewhere in the budget would be too difficult. Aside from arguing that overtime costs are already greatly limited and leave little room for savings, he also wrote that state agencies are unable to absorb additional cuts.
He also wrote that enrollment in the program jumped after the state loosed eligibility requirements in 2010, “just as the state was about to be hit with the worst fiscal crisis in a generation.”
The state increased income limits and removed an asset test, prompting enrollment to grow from 69,790 in August 2009 to more than 161,000 currently.
Barnes said that changes in the budget would eliminate eligibility for roughly 70,000 residents and reduce benefits to another 20,000.
Some lawmakers have suggested reinstituting an asset test as a way to keep residents with more resources from qualifying because they meet the income requirement. Barnes said that would have a limited impact because residents can pass the test by putting assets into a trust, give them to family members, or purchase certain protected items.