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The State Budget and Structural Reform, Part 1

Jul 27, 2015
Editor’s Note: Throughout this year’s debate on the FY 2016 - FY 2017 biennial budget, the MetroHartford Alliance advocated for structural reforms that would establish a fiscal foundation supporting private sector job retention and growth as well as capital investment. In communications to policymakers and public forums on the budget, the Alliance continually stressed the need to adopt lasting, real reforms to bring sustainability to our state’s budget, such as those developed by the Connecticut Institute for the 21st Century. The Institute was formed in 1997 when public and private leaders in Connecticut came together to exchange ideas about increasing the state’s economic growth and competitiveness. The group focuses on informing policymakers on key issues that hold the most potential for the state’s future. 

We are encouraged that the budget implementer includes language that directs the Secretary of the Office of Policy and Management to review the reports of the Institute and submit recommendations to the Governor and the Legislature’s Appropriations and Finance, Revenue and Bonding Committees.

In the interest of providing more details on the structural reforms for which the Alliance has advocated – both those of the Institute and others – we will be sharing regular updates with our Investors.

Rebalancing Connecticut's Long-Term Care System

Findings show that Connecticut’s long-term care (LTC) system is out of balance and in dire need of restructuring. The growing population of residents 65+ years of age (a 40 percent increase by 2025) and the reduction in number of family members who will care for them (a 5 percent reduction by 2025) will drive a significant increase in demand for LTC in Connecticut. Under the current LTC model in Connecticut, annual Medicaid LTC spending will increase by more than $3 billion by 2025. “Rebalancing” describes efforts to provide recipients of LTC with increased options, particularly the expansion of appropriate community and home-based options. 

What would rebalancing Connecticut’s long term care system achieve?

• Currently, 53 percent of LTC is provided through home and community based care and 47 percent through institutional care. Rebalancing the provision of LTC – in particular, expanding appropriate community and home-based care options – would offer recipients greater choice. 

• Achieving Connecticut’s stated goal of a more balanced system of 75 percent community and home-based care and 25 percent institutional care would avoid more than $900 million in annual LTC costs in 2025.

• Transitioning 5,200 individuals out of institutional care and into home care based services by 2020 would save an estimated $218 million per year.

• Rebalancing Connecticut’s long-term care system would provide Connecticut residents with LTC where they want to receive it. Almost 80 percent of state residents would prefer to continue living in their homes, with home health or homemaker services being provided.

What steps are necessary to achieve lasting reform to Connecticut’s LTC system?

Despite making progress, Connecticut ranks 34th among the states and is below the national average and many New England states in its rebalancing efforts. Leadership, commitment and an implementation strategy are needed in order to accelerate rebalancing efforts and achieve program goals. Institute recommendations include:

Provide strong leadership. The Governor and the Legislature must make Connecticut’s LTC system a priority. Some specific recommended actions:

• Appoint a cabinet level position to lead and manage LTC.
• Create and support legislation that does not allow short-term budget pressures to interrupt investments in the LTC system.
• Strengthen OPM’s role as a point of coordination for LTC.
• Aggressively pursue additional federal funding.

Create a strategy and align the LTC system. The existing system was created prior to the emergence of home and community based services and has a bias toward institutions. Under the Governor’s leadership, a LTC strategy must be developed that includes:

• Organizational structure
• Clearly defined goals
• Process and technology 

Consolidate and integrate state LTC functions. Connecticut has a fractured governance structure that relies on a number of different state agencies to provide administrative and programmatic support to older adults and persons with disabilities. This organizational complexity can be mitigated by establishing a consolidated approach to LTC in Connecticut that maximizes the impact of federal funds.

To read the full report on LTC reform and other reports from the Connecticut Institute for the 21st Century, visit the Public Policy Resources section of the MetroHartford Alliance website.

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