Connecticut State Comptroller Sean Scanlon on Monday warned the state legislature it must adopt more realistic Medicaid budgets, saying surging program costs and looming federal funding cuts threaten health coverage for roughly 1 million state residents.
“We have an overspending problem,” Scanlon said during a mid-afternoon online news conference on fiscal and economic trends, “and 60% of that overspending right now is happening with Medicaid.”
Connecticut’s Medicaid program has exceeded its authorized budget three consecutive fiscal years, and federal cuts totaling more than $900 billion nationwide through 2034 will compound state-level pressures that officials have not yet fully projected — while the program supports medical, behavioral health, substance abuse, and elder care services for roughly one in four state residents.
Connecticut’s Department of Social Services carries a $3.7 billion Medicaid line item — about 14% of the state’s General Fund — that has outrun its authorized budget each of the past three years. The department overspent by almost $160 million two fiscal years ago and by more than $300 million last fiscal year, according to the comptroller’s annual reports. Gov. Ned Lamont’s budget office projects more than $110 million in additional cost overruns in the current fiscal year.
Compounding those pressures, President Trump and Congress last July ordered federal Medicaid spending cuts of more than $900 billion nationwide by 2034. States are expected to begin feeling significant pain from those cuts by 2028. Connecticut analysts have not yet projected the state’s specific share of the losses, Scanlon said, though the hit is expected to be significant.
“I think that every option should be on the table for us as we explore how to make sure that the million or so people who get Medicaid can continue to get that … health care that they need,” Scanlon said.
Under budgeting, not overspending
Rather than authorizing realistic Medicaid appropriations, the state legislature and Lamont’s administration have repeatedly set funding levels that ignore clear demand growth trends, then covered cost overruns near the end of each fiscal year when budget cap rules allow more flexibility, Scanlon said.
“I think that the issue that’s happening right now is less an issue of overspending and more an issue of under budgeting,” the comptroller said, calling on officials “to craft more realistic budgets.”
Scanlon argued against cutting the program, saying reduced access to primary and specialist care raises costs in the long run for both patients and the state. “It sounds somewhat counter-intuitive, but the more money you spend (up front,) the less money you spend” in the long run, he said.
Surpluses, caps, and pension debt
Connecticut has run up surpluses exceeding $1.8 billion — equal to 8% to 9% of the General Fund — since aggressive budget caps were installed in 2017. Those surpluses have been directed toward reserves and reducing pension debt that still exceeds $33 billion, according to Lamont’s budget office.
Lamont, a fiscally moderate Democrat, has resisted adjusting the caps despite pressure from fellow Democrats who argue the rules divert too much money from health care, education, and municipal aid. Scanlon stopped short of calling for changes to the caps but said all solutions need to be reviewed.
Sen. Cathy Osten, a Democrat from Sprague who cochairs the Appropriations Committee, said state officials must reckon with the full scope of the problem — including that coming federal cutbacks in health care, nutrition, and other human services programs will likely drive Medicaid demand to new heights.
“We know we have a Medicaid problem,” Osten said, “and it’s something we’re going to have to address.”
Lamont’s budget spokesman, Chris Collibee, said the administration would release its Medicaid funding proposal on Feb. 4, when the governor presents budget adjustments for the 2026-2027 fiscal year. The goal, Collibee said, would be “to enhance affordability and opportunity for all Connecticut residents.”