Over the years the state has helped the center with its operating deficits mostly related to the operation of the John Dempsey Hospital in Farmington. At a public hearing in April, UConn Vice President and Chief Financial Officer Lorraine Aronson said that John Dempsey Hospital is at a competitive disadvantage because its fringe benefits for state employees cost $10.5 million more annually than the average hospital in the state. The benefits were negotiated under a 20-year agreement with state employee unions.

In order to solve its financial difficulties, John Dempsey Hospital is currently seeking the help of other area hospitals to keep its programs and services in good financial standing, so it doesn’t have to rely on funding from state taxpayers.

James Walter, associate vice president of communications for the UConn Health Center, said in a phone interview Thursday that he doesn’t expect these future collaborations to have an impact on the fiscal year 2009 budget. He said the projected 2009 budget deficit is already around $11.5 million, and joining the Charter Oak Health Plan has the potential to increase that deficit.

Given the current deficit, “the decision to participate in the Charter Oak Health Plan was very stressful for us,” Walter said. However, the decision to participate “was quite simple,” he said. “We’re in the business of health care and as health care providers we see the need to improve access to care.”

Minority Leader John McKinney, R-Southport, defended Rell’s Charter Oak Health Plan Thursday saying that by the end of the year it will help 19,000 previously uninsured adults get health insurance and gain access to health care services. He said hospitals will benefit from Charter Oak because they will continue to receive millions of dollars from the state in uncompensated bed funds, which is money to help hospitals pay for the treatment of the uninsured.

He said there will be fewer uninsured, but the same amount of money to cover them. “At the end of the day it’s a win-win for hospitals,” McKinney said Thursday in a telephone interview.

Sen. Toni Harp, D-New Haven, who chairs the Appropriations Committee, said Thursday that Senator McKinney is right.

She said she thinks UConn Health Center made the right decision as a state hospital to accept the Charter Oak Health Plan, even if it costs it money. She said the state has asked the health center to do a number of things that negatively impact its bottom line, such as the treatment of Connecticut’s prison population.

“They do it because it’s in the public interest,” she said.

Harp said she is concerned about the number of doctors and hospitals signing up for the Charter Oak Health Plan because it’s linked to HUSKY, the state Medicaid program serving more than 320,000 low-income children and family members. She said when doctors aren’t signing up for the Charter Oak plan, they also are not signing up for HUSKY, which puts an already vulnerable population at risk.

Dr. Angelo S. Carrabba, president of the Connecticut State Medical Society, said in a statement Wednesday that “In a day of declining reimbursement rates, physicians have to carefully consider the impact of such contracts on their practices’ financial health: as small businesses, they can only afford to join health plans that pay them fairly for the services they render.

“Each physician makes an individual choice whether to join any health plan, including but by no means limited to the Charter Oak Health Plan,” Carrabba said. “At this point, CSMS members are left to wonder why funding for health care is not slated to be used for payment for medical care, and is instead being funneled to participating health plans.”

It seems medical providers are concerned that the reimbursement rates for the Charter Oak Health Plan may be about the same rate they’re reimbursed by the state for accepting Medicaid patients.

“We know that if reimbursement for services under the Charter Oak Plan approximates the level of reimbursement under the Medicaid program, our forecasted deficit this year will rise,” Lombardo wrote in her email, which somehow reached the Senate Democratic caucus staff.

McKinney said he has to wonder why the Democrats “don’t want Charter Oak to succeed.”

Sen. Jonathan Harris, D-West Hartford, who has been outspoken about Rell’s insurance plan, has said he wants it to succeed, but in order to do that her administration has to take a step back and take a deep breath. Harris has said he thinks Rell rushed out the plan without enough of a medical provider network in place.

Rell has said she was only abiding by the deadlines for the program that were approved by the legislature.

Click here to listen to this morning’s WNPR discussion about the Charter Oak Health Plan on “Where We Live.” You’ll hear Department of Social Services Commissioner Michael Starkowski and Harris have a lively debate about the Charter Oak Health Plan.