screen-shot-2019-03-20-at-6-24-18-pm-300x237-5153794In a “Groundhog Day”-like replay of tactics from last year, health-care interests are again using an unlikely threat of spending cuts in Washington to demand special treatment in the upcoming state budget.

The question now is whether the governor and the Legislature will play along with the movie for a second time in a row – and whether it will have the same ugly ending.

The parallels are hard to miss. Last year, the Greater New York Hospital Association and the health-care union 1199 SEIU joined Cuomo in raising an alarm about Republican attempts to repeal and replace the Affordable Care Act and other potential threats to New York funding – none of which materialized as feared. In the end, the state’s total Medicaid funding went up, not down.

This year, GNYHA, 1199 and Cuomo are pointing to deep cuts to Medicaid in President Trump’s budget proposal – which have virtually no chance of passing in the Democrat-led House of Representatives.

Last year, those two groups supported Governor Cuomo’s proposal to create a “Health Care Shortfall Fund” as a hedge against the loss of federal health aid.

This year, they’re calling for the creation of a “contingency fund” for the same purpose.

The 2018 version ended with a bait-and-switch maneuver. Cuomo cited the threat of federal cuts to justify expropriating $2 billion in proceeds from the sale of Fidelis Care health plan. But rather than salting it away in a “shortfall fund,” lawmakers directed it to a “transformation fund” – which Cuomo could spend on virtually any health-related purpose.

He first dipped into that fund to finance Medicaid rate increases for hospitals and nursing homes – to the benefit of GNYHA and 1199 members, among others.

He recently proposed to rescind those increases to help close a budget gap, but later seemed to change his mind again – leaving their ultimate fate in limbo.

This budget cycle, the feared cuts to New York’s federal funding are, if anything, less likely to happen. One cut that could become real – the loss of $600 million from Medicaid’s Disproportionate Share Hospital program – is not a new threat. It was first enacted as part of the Affordable Care Act in 2010, and has been repeatedly postponed by Congress under both parties.

Dwarfing that potential loss is the $14 billion revenue increase that New York’s hospitals experienced between 2012 and 2016, including a $3.2 billion increase in Medicaid funding. Both numbers rose faster than the national average even as inpatient admissions declined.

Barring cutbacks by lawmakers – which now seem unlikely – total state Medicaid spending is projected to grow by another 4 percent, or $1.5 billion, in fiscal year 2020.

That number would grow even higher if, as GNYHA and 1199 are requesting, lawmakers scrounge additional cash for a “contingency” fund – which, once in the state treasury, could easily be diverted all over again.

So, will the Assembly and Senate dutifully bow to this powerful lobby’s demands, just as they did last year? Or, like Bill Murray’s weatherman in “Groundhog Day,” will they find a way to change the script?

 

About the Author

Bill Hammond

As the Empire Center’s senior fellow for health policy, Bill Hammond tracks fast-moving developments in New York’s massive health care industry, with a focus on how decisions made in Albany and Washington affect the well-being of patients, providers, taxpayers and the state’s economy.

Read more by Bill Hammond

You may also like

The debate over Medicaid home-care funding needs a reality check

The push in Albany to boost wages for home health aides is seemingly disconnected from the larger realities of the state’s long-term care system. As they , officials in the home care industry are warning that the state faces an of in-home caregivers Read More

Answers needed on Governor Hochul’s health-care budget

The health-care agenda laid out by Governor Hochul in her budget proposal this week leaves a lot of questions unanswered. Here are a few of them. Read More

Putting Governor Hochul’s $10 billion health-care ‘investment’ in context

In her State of the State address this week, Governor Hochul prominently called for a $10 billion "multi-year investment" in the state's health care system, including $4 billion earmarked for wages and bonuses, with a goal Read More

Hochul faces a test on health insurance costs

With judicious use of her veto pen this month, Governor Hochul could draw a line against spiraling health expenses for consumers and taxpayers. Several health insurance-related bill Read More

The Health Department takes a big step toward COVID transparency

The state Health Department released a flurry of 20 COVID-related data sets this week, taking its biggest step yet toward full transparency about the state's pandemic response. Read More

Hochul’s Emergency Order Imposes Insurer Restrictions Sought by Hospital Group

Buried in Governor Hochul's emergency order on health-care staffing is a temporary bar against insurance companies challenging claims submitted by hospitals–and an influential hospital association is taking credit. Read More

Home Care Agencies Project Widespread Staffing Shortages in the Next Phase of New York’s Vaccine Mandate

Agencies providing home-based care to elderly and disabled New Yorkers face a large-scale loss of employees when the next phase of the state's vaccine mandate takes effect on Oct. 7, according to a newly released industry s Read More

Remembering the scandal that brought down Health Commissioner Howard Zucker

The resignation of Dr. Howard Zucker as state health commissioner marks the end of a term marred by scandal over his role in managing the coronavirus pandemic. The much-debated compelling nursing homes to admit COVID-positive patients, though it origi Read More

Subscribe

Sign up to receive updates about Empire Center research, news and events in your email.

CONTACT INFORMATION

Empire Center for Public Policy
30 South Pearl St.
Suite 1210
Albany, NY 12207

Phone: 518-434-3100

General Inquiries: Info@EmpireCenter.org

Press Inquiries: Press@EmpireCenter.org

About

The Empire Center is an independent, non-partisan, non-profit think tank located in Albany, New York. Our mission is to make New York a better place to live and work by promoting public policy reforms grounded in free-market principles, personal responsibility, and the ideals of effective and accountable government.

Empire Center Logo Enjoying our work? Sign up for email alerts on our latest news and research.
Together, we can make New York a better place to live and work!