SB 499 — AN ACT CONCERNING MEDICAID RATE INCREASES.

Senate General Assembly SubstituteFile Bill No.

499488 February Session, 2026 ANSubstitute ACTSenate CONCERNINGBill MEDICAIDNo. RATE INCREASES.

499 Senate, April 7, 2026 The Committee on Human Services reported through SEN.

LESSER of the 9th Dist., Chairperson of the Committee on the part of the Senate, that the substitute bill ought to pass.

AN ACT CONCERNING MEDICAID RATE INCREASES.

The commissioner shall phase in the rate increases commencing on July 1, 2026, such that by June 30, 2029, all such rates equal (1) not less than seventy-five per cent of the most recent Medicare rates for the same health care services, or (2) for such services with no corresponding Medicare rates, a percentage of the five-statesSB499 rate/ benchmarkFile thatNo. results in an equivalent rate increase.

(c)488 On and after June 30, 2029, the commissioner shall adjust such rates every year (1) to not less than seventy-five per cent of the most recent Medicare rates for the same health care services, (2) to an equivalent percentage of the five-state rate benchmark for such services LCO 1 ofsSB499 3File Substitute Bill No.

499488 withfive-state norate correspondingbenchmark Medicarethat rates,results or (3) by increasing such rates by any percentage increase in thean Medicareequivalent Economicrate Index.increase.

(c) On and after June 30, 2029, the commissioner shall adjust such rates every year (1) to not less than seventy-five per cent of the most recent Medicare rates for the same health care services, (2) to an equivalent percentage of the five-state rate benchmark for such services with no corresponding Medicare rates, or (3) by increasing such rates by any percentage increase in the Medicare Economic Index.

ThesSB499 report/ shallFile includeNo. the council's recommendations on necessary appropriations to ensure Medicaid providers are compensated for health care services in accordance with section 1 of this act.

LCO488 2 ofsSB499 3File Substitute Bill No.

499488 ThisThe actreport shall takeinclude effectthe ascouncil's followsrecommendations andon shallnecessary amendappropriations theto followingensure sections:Medicaid providers are compensated for health care services in accordance with section 1 of this act.

This act shall take effect as follows and shall amend the following sections:

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488 The following Fiscal Impact Statement and Bill Analysis are prepared for the benefit of the members of the General Assembly, solely for purposes of information, summarization and explanation and do not represent the intent of the General Assembly or either chamber thereof for any purpose.

In general, fiscal impacts are based upon a variety of informational sources, including the analyst’s professional knowledge.

Whenever applicable, agency data is consulted as part of the analysis, however final products do not necessarily reflect an assessment from any specific department.

OFA Fiscal Note State Impact:

Agency Affected Fund-Effect FY 27 $ FY 28 $ Social Services, Dept.

GF - Cost See Below See Below Note:

GF=General Fund Municipal Impact:

None Explanation The bill results in a significant cost to the Department of Social Services due to phasing-in increases to Medicaid provider rates by 6/30/29.

The bill requires that Medicaid rates for various providers be increased to (1) 75% of the Medicare rate for similar services, or (2) to a similar percentage increase based on the five-state benchmark included in the Medicaid rate study supported by PA 23-186.

For context, the study reviewed costs to adjust Medicaid rates to 80% of the Medicare fee schedule and five-state rates for Maine, Massachusetts, New Jersey, New York and Oregon.

Based on those factors, state costs are estimated at approximately $150 million when annualized, with additional annual increases incurred to reflect updated fee schedules, benchmarks, or increases in the Medicare Economic Index (MEI).

For purposes of an example, the table below details state costs by fiscal year if each set of rate increases is supported by equal annualized funding.

sSB499 / File No.

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488 Example:

Phase-in of Medicaid Provider Rates (state share, $ in millions) FY 27 FY 28 FY 29 Year 1 Costs 50.0 50.0 50.0 Year 2 Costs - 50.0 50.0 Year 3 Costs - - 50.0 Total 50.0 100.0 150.0 - assumes rate increases are effective July of each year.

The actual annual cost to increase rates depends on the provider group under review and associated funding necessary to meet the benchmark, within the required timeframe.

The Out Years The annualized ongoing fiscal impact identified above would continue into the future subject to the Medicare fee schedule, five-state rate benchmarks, or any percentage increase in MEI.

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488 OLR Bill Analysis sSB 499 AN ACT CONCERNING MEDICAID RATE INCREASES.

SUMMARY This bill requires the Department of Social Services (DSS) commissioner to increase Medicaid provider rates, within available appropriations, in accordance with the Medicaid rate study required under PA 23-186.

Among other things, the study generally recommends using (1) Medicare as a benchmark or (2) other states’ Medicaid rates to updateratesinitiallyandadoptinganindependentratemodelforfuture years.

DSS must phase in these rate increases starting July 1, 2026, through June 30, 2029, and then make annual rate adjustments after that date.

The bill also requires the DSS commissioner to streamline and consolidate existing fee schedules used for provider or service reimbursement so that the same fee schedule is used to reimburse every provider.