CT Gov. Ned Lamont Issues 'Extraordinary' Declaration Amid Nearly $300M Shortfall

CONNECTICUT — Facing a nearly $300 million projected shortfall in Medicaid, Gov. Ned Lamont has signed a Declaration of the Existence of Extraordinary Circumstances on Monday to keep Medicaid fully funded for the rest of the 2025 fiscal year.

The General Assembly still needs to sign off on the changes, and Lamont is proposing the funding come from the state's general fund surplus.

The Connecticut Department of Social Services (DSS) is responsible for administering Medicaid in Connecticut. The department estimates that it will need an additional $284 million to ensure that payments continue to be made to health care providers under this program. More than 900,000 Connecticut residents receive health coverage through Medicaid, including children, older adults, individuals with disabilities, and low-income families.

A rarely used declaration and answers on what is driving up costs

This is the first time a declaration of this kind has been issued since 2007, when Gov. M. Jodi Rell signed a similar declaration.

Increases in costs are being driven by several factors, including changes in the enrollment mix, rising home health and pharmacy costs, and overall increased utilization of services across the program. Lamont said the shortfall will begin on May 21 unless the legislature takes action.

2 big changes are a part of this declaration, including use of GLP-1s

To contain costs, Lamont said he has proposed repealing the GLP-1s for weight loss only starting in June, as well as changing Connecticut’s home-based services program to a waiver, which will limit enrollment. DSS plans to provide stronger oversight of pharmacies to ensure patients receive the medication they need, without waste.

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Threat to access to care, health outcomes and federal funds

"Absent immediate action, the state will lack sufficient appropriations by May 21, 2025, to make timely payments to hospitals, physicians, behavioral health providers, nursing homes, and other healthcare professionals, thereby threatening the delivery of medical care and risk worsening health outcomes, increased long-term costs, and loss of federal matching funds," the declaration reads.

Where will the $284 million come from?

The General Fund is projected to end the fiscal year ending June 30, 2025, with a surplus in excess of $450,000,000, sufficient to address the Medicaid deficiency, Lamont said.

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Lamont's explanation

“Our most vulnerable residents, including seniors and those with disabilities, receive health coverage through Medicaid and it is important that we authorize the funding necessary to ensure these payments continue to be made and people can access the care they need,” Lamont said in a prepared statement. “Connecticut is not alone on this issue as many states are confronting funding issues with Medicaid that are being driven by several intersecting factors. I am hopeful that a unanimous, bipartisan majority of legislators in the General Assembly will agree that we have an obligation to support Medicaid and the people who depend on it for care.”

Lamont’s declaration clarifies that this additional expenditure shall not be considered general budget expenditures for the 2025 fiscal year for the purposes of determining general budget expenditures for 2026 fiscal year.

Top Republican's reaction

Vincent Candelora (R-North Branford) released a statement saying, "Make no mistake—Democrats and the Governor knew about this Medicaid shortfall over a year ago. They ignored it, rejected our responsible plan to fix it, and instead chose to send more money to the state’s higher education system. Now, we’re seeing the start of a smoke-and-mirrors scheme not just to cover up a crisis of their own making—driven in part by costly policy decisions like expanding free healthcare for illegal immigrants—but also to set the stage for exceeding the spending cap in the upcoming biennium by pushing current-year expenses into the next fiscal year. With this deficiency deal, Democrats and the Governor are putting Connecticut on a fast track to even bigger budget problems—ones we’ll be grappling with for years to come."