Governor Hochul gave health care surprisingly little attention in her State of the State speech on Tuesday – a sign that taking on dysfunction in one-sixth of the state’s economy ranks low on her list of priorities.

She proposed to expand and improve services for the mentally ill, including opening thousands of beds in psychiatric hospitals and group homes, as part of a larger effort to reduce homelessness and improve public safety.

But her annual address made no mention of seemingly urgent issues in the broader health system – such as staffing shortages and labor turmoil, allegations of neglect and fraud in nursing homes, the fallout of a massive pandemic, unaffordable health premiums, low-quality hospital care, and spiraling Medicaid costs

In fact, her speech did not include the word “Medicaid,” even though it’s one of the state’s biggest programs and covers one in three New Yorkers.

Virtually all of her health care agenda was relegated to the book version of her message to the Legislature, where it accounted for just 30 of the 276 pages.

Some of those health-related proposals seemed perfunctory or half-baked. A section headed “Strengthen New York’s Public Health Emergency Readiness Capacity” consisted merely of a non-specific promise that “the Health Department will commit additional staff resources” to planning, training and stockpiling.

The section about improving long-term care included a vague proposal to “invest in care teams to provide care for low-income adults in their home, helping to ensure New Yorkers can age in place.” This is something New York already spends billions doing – proportionally more than any other state.

Notably absent even from the book is any discussion of big changes coming for the Medicaid program nationwide. As of April 1, the federal government will start phasing out the extra aid payments it has provided states during the pandemic, which have been worth about $3.5 billion a year for New York.

That date also marks the end of the “continuous coverage” requirement, which suspended the normal eligibility screenings for Medicaid enrollment—leaving millions of people on the rolls who would not otherwise qualify. Many are believed to be eligible for employer-sponsored health benefits—and may even be enrolled in those plans—even as the state pays monthly premiums for Medicaid coverage they don’t need.

Federal policy calls for states to gradually prune such enrollees from their Medicaid plans over the next year, which will be a big job. In New York alone, Medicaid rolls are projected to shrink by a million or more.

Neither the loss of aid nor the looming pressures for the Health Department’s enrollment infrastructure were discussed in the governor’s message.

Here is a summary of some of Hochul’s more significant proposals:

Regulatory reform. Hochul called for loosening or otherwise reforming various regulatory restrictions on the health care system that tend to restrict the availability of services, limit consumer choice and drive up costs.

One such proposal would loosen “scope of practice” limits on professional licenses, allowing nurses, pharmacists and other trained professionals to take on certain tasks currently handled only by doctors. Hochul also called for joining interstate licensing compacts so professionals moving from elsewhere could more easily practice in New York.

A second proposal would streamline the Health Department’s “certificate of need” review process, making it easier to establish or expand health facilities such as hospitals, nursing homes and clinics. 

Hiking the cigarette tax. Hochul wants to increase the state’s tax on cigarettes by $1 per pack, to $5.35, which she said would further deter young people from taking up smoking.

How much difference this would make is debatable. New York already charges one of the highest such state levies in the country – second only to the District of Columbia. 

The amount of money this tax raises has been steadily dropping, from $1.5 billion in 2010 – when the tax was raised to its current rate of $4.35 per pack – down to $900 million last year. This is partly due to reduced smoking rates, but also because of widespread tax evasion. New York is estimated to be the biggest importer of black market cigarettes, which generates significant profits for organized crime and street gangs. A further tax hike would further fuel this illegal activity.

Data collection. The nation’s response to the coronavirus pandemic was frequently handicapped by a lack of timely and accurate data. In New York, officials effectively designed a collection system from scratch after the outbreak had begun, which imposed additional paperwork on hospitals and nursing homes that were in the thick of a crisis.

Hochul is proposing a modernized data collection system that would integrate with providers’ existing information technology. This would theoretically streamline the reporting process and potentially allow officials to spot early signs of new outbreaks.

Such a system would require the adoption of standardized electronic medical records, which would be useful in other ways. If privacy could be assured, this is worth exploring as an important upgrade to New York’s public health defenses.

Capital funding. Hochul proposed committing additional state funds for building projects, equipment upgrades and the other capital purposes of the state’s hospitals, nursing homes and other providers. 

It’s far from clear that this is necessary. Since 2014, lawmakers have approved $5.4 billion in health capital funding, including $1.6 billion in last year’s budget. As of April 2022, almost two-thirds of that money remained unspent. 

Lawmakers also failed to properly limit who could qualify for funding, resulting in waste and apparently corruption. In one notorious case, a company that donated to Governor Cuomo’s campaign account received $25 million in state funds to subsidize medical office buildings that easily could have been built with private money.

Reform commission. Acknowledging the many shortcomings of the state’s health-care system—including some of the nation’s lowest quality ratings for hospitals and longest wait times in emergency rooms—Hochul said she intends to establish a commission that would “transform how we pay for and deliver care.”

One of its goals would be to “establish a nation-leading public health disease response and surveillance system”—an urgent need that Hochul has been slow to address.

As described, however, the description of the commission’s mandate consists of platitudes and buzzwords, such as “drive a holistic and data-driven view of the state’s health care delivery system” and “develop and evolve a comprehensive, evidence-based strategy and roadmap for the transformation of the system.”

Given that vague language—and the fact that Hochul did not see fit to mention the commission in her speech—it’s hard to know how seriously this idea should be taken.

Hochul is due to deliver a formal budget proposal in the next weeks. In that document, she has no choice but to clearly address Medicaidbecause it represents almost $30 billion of state spending. She must also give the concrete details of any other proposals she intends for the Legislature to approve as part of the budget process.

That will give New Yorkers a clearer view of whether their governor has a real agenda for the health-care system, or merely intends to continue the status quo.

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

82 Questions Hochul’s Pandemic Report Should Answer

This is the month when New Yorkers are due to finally receive an official report on the state's response to the Covid-19 pandemic, one of the deadliest disasters in state history. T Read More

Lawmakers Seek To Revive a $10 Fee for Prescriptions That Was Dropped by DFS

A plan to require a $10.18 "dispensing fee" for filling drug prescriptions is back on the table in Albany – this time in the form of legislation rather than regulation. The Read More

How a Medicaid ‘Cut’ Could Lead to More Unionization of Home Care Aides

A money-saving maneuver in the newly enacted Medicaid budget could end up increasing costs in the long term – by paving the way for more unionization of the state's burgeoning home health workforce. Read More

Budget Deal Slows Medicaid Growth But Plants Seeds for Future Spending

The growth of New York's Medicaid spending is projected to slow but not stop as Governor Hochul and the Legislature effectively split their differences over health care in the newly enacted state budget. Read More

Albany’s New Health Insurance Tax Comes with Few Limits

The newly enacted state budget imposes a multibillion-dollar tax on health insurance without specifying who must pay how much – leaving those basic details to be decided later by the health commissioner in negotiation wit Read More

One of New York’s Biggest Medicaid Contractors Is Quietly Acquiring a Competitor

Author's note: This post has been updated to correct an error in the second paragraph. As state lawmakers debate the future of Medicaid home care, one of the program's bigg Read More

New York’s Home Health Workforce Jumped by 12 Percent in One Year

New York's home health workforce has continued its pattern of extraordinary growth, increasing by 62,000 jobs or 12 percent in a single year, according to newly released data from the U.S. Bureau of Labor Statistics.  Read More

While New York’s Medicaid Budget Soared, Public Health Funding Languished

Four years after a devastating pandemic, the state has made no major investment to repair or improve its public health defenses. While funding for Medicaid over the past four years Read More